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Bird Global, the company that pioneered on-road electric scooter rentals, has filed for Chapter 11 bankruptcy protection in Florida, five years after becoming the fastest startup ever to reach a so-called “unicorn” valuation of over $1 billion -dollars had reached.
In September, the New York Stock Exchange halted trading in Bird, which went public through a blank-check company in 2021, after its market capitalization fell below the $15 million threshold.
“We are making progress toward profitability and want to accelerate that progress by right-sizing our capital structure through this restructuring,” Michael Washinushi, Bird’s interim chief executive, said Wednesday.
Bankruptcy court filings showed Bird has about $3.25 million in cash left but needs “immediate access” to $16.8 million to meet its financial obligations through the week ending March 12. January to comply.
“Since Bird’s inception, the company has struggled to generate positive cash flow despite its growth efforts and relative market share compared to its competitors,” the company said in a filing Wednesday, noting that Bird had accumulated losses of $1,000 at the end of September totaling $1.6 billion.
The company cited “difficult conditions in the capital markets,” a loss of market share to competitors with newer scooters, legal costs and a decline in winter sales as reasons for filing for Chapter 11.
Bird said it would proceed as usual during the restructuring process and that its lenders had entered into a “stalking horse” sale agreement. The company aims to complete the sales process within 120 days. Its European and Canadian operations are not part of the bankruptcy filing.
The company has provided $25 million in debtor-in-owner financing from lenders including MidCap Financial, a unit of Apollo Global Management, to cover its reorganization. Such loans have priority over other creditors and usually come with high interest rates.
Founded in Los Angeles in 2017 by former Uber and Lyft executive Travis VanderZanden, Bird has spawned dozens of copycat companies around the world. But the e-scooter rental industry has struggled to achieve consistent profitability due to regulatory requirements, safety concerns and high capital and operating costs.
Earlier this year, Paris residents voted to ban e-scooter rentals, shutting down what was once the industry’s largest market. Thousands of scooters were cleared from the streets of the French capital in September after residents complained they were littering sidewalks and posing a danger to pedestrians and cyclists.
Bird’s bankruptcy filings show that the company is a defendant in more than 100 lawsuits, most of which relate to personal injury claims brought by people who were in accidents while riding its scooters. The company’s operating licenses in most cities require it to indemnify local authorities from such lawsuits, which results in “significant litigation costs each month.”
Winter also brings special challenges for operators of so-called “dockless” scooters and electric bikes, such as Bird and its larger US competitor Lime, as well as their remaining European competitors Dott, Tier and Voi. Customers are less likely to ride bikes or scooters in cold or wet weather, and their operators are losing business as tourism slows in many cities.
Bird said in a filing last month that the company suffered net losses of $73.4 million in the nine months ended Sept. 30 and had unrestricted cash and equivalents of $10.2 million at the time million US dollars. Last year, Bird reported revenue of $244.7 million and a net loss of $358.7 million.
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Documents filed in South Florida bankruptcy court showed Bird had estimated assets and liabilities of $100 million to $500 million. Creditors include dozens of U.S. cities as well as technology providers such as Amazon Web Services, fleet management software maker Zoba, data analytics firm Palantir and Chinese scooter maker Ninebot.
Berger Singerman is serving as Bird’s attorney and Teneo is serving as financial advisor.
Bird also listed European rival Tier, from which it acquired its U.S. subsidiary Spin in a $19 million deal in September, with a stake of more than 10 percent. SoftBank-backed Tier recently laid off around 22 percent of its workforce after what it described as an “incredibly tough year” as the company attempts to achieve a “strong pivot” toward profitability.