Bird Globalthe pioneer company in the rental of electric scooters on the street, went bankrupt. After months of drifting aimlessly, the company filed for Chapter 11 bankruptcy protection in a Florida court. The economic crisis and regulations in several countries have been key in its decline.
In accordance with Financial Timesthe company will begin its financial restructuring with the support of a group of lenderss. Bird listed assets and liabilities ranging from $100 million to $500 million. The objective is to raise 414 million dollars and complete a sales process within a period of 90 to 120 days.
Bird mentioned that it has sufficient liquidity to meet its financial obligations to partners, vendors, suppliers and city employees during and after the restructuring process. In all that time, The company will operate normally, maintaining the service to passengers and fleet managers.
“We are moving toward profitability and intend to accelerate that progress by right-sizing our capital structure through this restructuring,” said Bird interim CEO Michael Washinushi. “We remain focused on our mission of making cities more liveable by using micromobility to reduce car use, traffic and carbon emissions.”
Bird’s bankruptcy comes at a time when electric scooters have lost relevance. The company laid off dozens of employees and left several countries during 2022. This year, Paris banned scooter rentals after its inhabitants complained about the chaos caused by its abandonment in the streets.
Bird, from stardom to failure in just five years
Five years after becoming the venture that reached a valuation of $1 billion the fastest, Bird faces a restructuring process. The micromobility company has suffered the impact of the economic crisis, as well as a series of regulations that accelerated its exit from several markets in the last two years.
The pandemic was a breaking point for Bird, who was forced to lay off 30% of her staff and stop operations in cities such as Barcelona, Madrid, Seville, and others. Although the company tried its luck in 2021 with the launch of an electric bicycle, could never recover.
In November 2022 it was learned that Bird inflated its accounts for two years. In a document filed with the United States Securities and Exchange Commission, the company accepted that added unpaid trips to their income reports. Because of this, an audit committee determined that financial reports covering the first quarter of 2020 through the second quarter of 2022 should not be relied upon.
Now Bird faces a new challenge, considered by its management as “an important milestone” in its transformation. Chapter 11 protects the company from its creditors while it develops a plan to pay them. The company mentioned that Bird Europa is not part of this presentation and will continue its operation as normal.