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Inside Helbiz's 🔥 hell 🔥 biz
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Inside Helbiz's 🔥 hell 🔥 biz

"These conditions raise substantial doubt about the Company's ability to continue as a going concern."

Ali Griswold
Apr 30, 2022
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Inside Helbiz's 🔥 hell 🔥 biz
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Hello and welcome to Oversharing, a newsletter about the proverbial sharing economy. This is a subscriber-only post. To get the full post and more in-depth analyses of mobility and the gig economy, you can become a paying subscriber for a special launch period rate—expiring today!—of $7/month or $70/year.


Here is something you never want to see in a company’s annual report:

Our financial statements for the fiscal year ended December 31, 2021 include an explanatory paragraph from our auditor indicating that there is substantial doubt about our ability to continue as a going concern.

That is from the risk factors section of the 2021 annual report that micromobility firm Helbiz filed with the SEC on April 15. The note from auditor Marcum LLP, dated one day earlier, explains:

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

“Note 1” continues:

Going Concern

The Company has experienced recurring operating losses and negative cash flows from operating activities since its inception. To date, these operating losses have been funded primarily from outside sources of invested capital. The Company had, and may potentially continue to have, an ongoing need to raise additional cash from outside sources to fund its expansion plan and related operations. Successful transition to attaining profitable operations is dependent upon achieving a level of revenues adequate to support the Company’s cost structure. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The Company plans to continue to fund its operations and expansion plan through debt and equity financing. Debt or equity financing may not be available on a timely basis on terms acceptable to the Company, or at all.

Helbiz was founded in 2016 by Italian entrepreneur Salvatore Palella to offer e-scooter, e-bike, and moped rentals in cities. It raised relatively little funding until 2019, when it announced plans to dual list on the Nasdaq and Italian market AIM Italia and closed an initial $10 million investment round. At this point Helbiz claimed to be the market leader in Italy, which made up the bulk of its business, as well as to have pilot programs in cities in Spain, Portugal, Greece, France, and Singapore. In 2020, it began operating e-scooters in several U.S. cities, mostly in the D.C. metro area, including leasing competitor Skip’s operating license for up to 2,500 e-scooters in D.C. proper (Skip went bankrupt in mid-2021).

Helbiz listed on the Nasdaq in August 2021 through a special purpose acquisition company (SPAC), becoming, in its words, the first U.S. publicly listed micromobility firm. The deal with GreenVision Acquisition Corp. landed it a bit more funding, bringing its total to around $67 million, according to PitchBook. That summer Helbiz also launched Helbiz Kitchen, a food delivery service operating out of a dark kitchen in Milan, and began streaming sports-focused media content to subscribers in Italy.

The rosy financial projections Helbiz shared with investors ahead of the SPAC in February 2021 included $13 million in earnings before interest, taxes, depreciation, and amortization (EBITDA) on $80 million revenue in 2021 and $190 million in EBITDA on $449 million in revenue by 2025. Helbiz forecast ads and ‘new verticals’ would grow to about 25% of its revenues, with the majority continuing to come from mobility offerings. Helbiz provided breakdowns of its aspirational unit economics and declared it had a “Clear path to profitability.”

Haha, well, 2021 would beg to differ.

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