The German shared e-scooter operator TIER and the Dutch-French micro-mobility company Dott have signed a preliminary agreement to merge the two companies to form Europe’s leading micro-mobility operator. Both companies reported this in a press release.
The joint entity will continue to operate under the Dott and TIER brands. The merger is expected to take effect within two months. The two companies have a turnover of 250 million euros and provide 125 million rides in more than 20 countries.
In bad shape
If you can’t beat them, join them. That seems to be the device behind Dott and TIER’s backing for the merger. According to the German newspaper Handelsblatt, TIER, in particular, is said to be in bad shape, the reason why the Berlin-based company would like to merge with its much smaller rival Dott, which also made a loss – earlier talks with rivals Vow and Bolt, had come to nothing.
TIER was once valued at two billion dollars, but according to financial circles, this would have shrunk to around 150 million euros.
Tough competition, tightening of rules
The situation for e-scooter operators is currently completely different compared to 2018, when several providers in major cities worldwide started rolling out a lockless e-scooter-sharing system, complementing existing bike-sharing systems.
Due to the Paris ban, tough competition, and high operating costs, among others, the market of e-scooter operators has come under considerable pressure. Recently, for example, US e-scooter pioneer Bird went bankrupt.
Moreover, due to careless use of the users, such as letting the e-scooters swing around on pavements, many cities have since tightened the rules, which has also curtailed the number of e-scooters on offer and often the number of providers.
€60 million investment
With the merger, Dott and TIER hope to achieve a turnaround, although completion watchdogs have yet to approve the merger. For instance, the merged company raised an additional 60 million euros in capital from shareholders, including Emirati state-owned holding company Mubadala Investment and Belgian Sofina.
TIER has seen several layoffs since 2022, and Dott currently employs 500 people. In Brussels, Dott and competitor Bolt won a tender to become the sole operator of shared e-scooters in February. They may also, together with Voi, offer shared bikes. TIER may only rent out cargo bikes in Brussels.
The headquarters of the merged company will be in Berlin. The company will be chaired by current TIER CEO Lawrence Leuschner and managed by Henri Moissinac, the co-founder of Dott.
Cuts in offerings?
TIER currently operates in 400 cities in 21 countries. Dott, which recently withdrew from the German market, is now represented in Belgium, France, Italy, Poland, Spain, the UK, and Israel. Together, they thus operate in Berlin, Dubai, Helsinki, London, Madrid, Paris, Rome, Tel Aviv, and Warsaw, among others. The intention is to launch operations in other global cities as well.
So far, however, little is known about what the merged company will focus on. There are plans for cuts to its offerings. Riders will continue to access TIER and Dott vehicles through their respective apps, with more convergence possible.