⚡️Breaking⚡️: Bird Canada to bail out Bird Global in reverse-takeover
The proposed deal would inject $32 million into the struggling e-scooter business
Bird Canada, an independently owned and run Canadian micromobility company (it’s confusing, I know), intends to merge with struggling e-scooter operator Bird Global Inc. in a transaction valued at $64 million, the companies announced today.
The deal has huge implications for Bird, whose recent woes include management tumult, a going concern warning, a penny stock price and possible delisting from the New York Stock Exchange, a recent admission that it systematically overstated revenues for 2.5 years, and a desperate campaign to chase down riders for unpaid pennies. This is a company in crisis, which told investors last month that it might not survive the next year without additional capital. Now Bird Canada is throwing the other Bird a lifeline. The price could be Bird Global’s entire way of doing business.
TOC (🔒 = paid subs content)
🇨🇦 Canada to the rescue 🇨🇦
The deal values Toronto-based Bird Canada at $32 million. The investors behind Bird Canada are injecting another $32 million into Bird Global BRDS 0.00%↑, the firm founded in 2017 by Travis VanderZanden, in the form of convertible notes. Bird Global will receive the first $4 million loan immediately, and the remainder at the transaction close, which is expected “as soon as possible,” per a press release.
As part of the deal, Bird Global will undergo a massive management shakeup. Bird Canada founder and CEO Stewart Lyons is being named president of the combined company. Michael Washinushi will replace Ben Lu as CFO. Three board members—Sequoia Capital’s Roelof Botha, Goldcrest Capital’s Daniel Friedland, and Craft Ventures partner/Elon pal David Sacks—have resigned, effective immediately. Their seats plus two vacancies will be filled by five reps from Bird Canada, and the board size fixed at nine, handing control to the Canadian team.
VanderZanden, Bird’s founder and former CEO, will remain on the board. Shane Torchiana, a four-year vet of Bird management who took over first as president and then CEO from VanderZanden in September, will continue to serve as CEO.
While Bird Global is framing this as a proposed merger, the reality of the money changing hands and the power structures being imposed is that it looks very much like a reverse takeover by Bird Canada.
John Bitove, chair of Bird Canada,1 said in a statement that the Canadian team’s “maniacal operating focus on profitability and customer service” will help turn Bird Global around. Torchiana said in the same press release, “We believe that this new funding, coupled with the operational rigor provided by the addition of Bird Canada, will contribute to Bird’s goal of becoming adjusted EBITDA profitable on a full year basis in 2023.”
🙋♀️ Ok wait, what is Bird Canada? 🙋
Yes, let’s clear that up. Bird Canada is an independently owned and operated micromobility provider. It was founded in 2019 by Stewart Lyons and a group of investors to bring e-scooters to Canadian cities. Bird Canada owns its scooters, e-bikes, and operating permits, and licenses the Bird name and software from Bird Global. It operates in 10 Canadian cities including Calgary, Edmonton, and Ottawa. Bird Canada has “consistently delivered best-in-class unit economics since its launch and delivered positive full year EBITDA in recent years,” the companies said in their press release.
Bird Canada most recently completed an early-stage venture round in August 2021, according to data from PitchBook, and did one seed round prior to that. Its investors include Relay Ventures, Obelysk, Alate Partners, and MacKinnon, Bennett & Co. On its ‘about’ page, Bird Canada describes itself as “proudly Canadian with an all-Canadian management team and backed by Canadian investors” which is honestly the most Canadian thing I’ve ever heard except maybe The Hockey Song.
The obviously notable point here should be that Bird Canada says it has been full-year EBITDA profitable. This despite the fact that:
Bird Global has very much not accomplished that
Canada is cold and not necessarily the first place you would imagine a shared scooter business being successful much less profitable
Bird Canada is a private company so we have yet to see a breakdown of its operating results. That said, the fact that the Canadian unit claims to have found a path to EBITDA profitability suggests it has a very different way of doing things from Bird Global. And that all-Canadian team is betting it can turn around the global company’s fortunes by imposing similar operational rigor in all markets.
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