Tier Mobility and Dott announce their merger!
After the explosive growth and large-scale financing in the past few
years, the shared mobility industry is facing stricter regulation and higher demands from users. The market is now becoming saturated, making it more difficult for new entrants, and the competition between existing companies will become more and more intense, as the shared mobility industry enters a reshuffle phase, and in order to maintain a competitive edge, many companies may choose to consolidate their resources in order to improve efficiency and reduce costs. On 10 January this year, shared mobility operators Tier Mobility and Dott announced that they had reached a preliminary merger agreement, which is still subject to some regulatory approvals and is expected to be completed within two months. The merger will form Europe's largest shared mobility operator.
Corporate changes
The combined company will be headquartered in Berlin, with user apps still available in the App Store and Google Play Store, and the scope of operations will remain unchanged. However, the leadership team has been reshuffled, with Tier co-founder and CEO Lawrence Leuschner serving as Chairman of the Board, Dott co-founder and CEO Henri Moissinac serving as the new company's CEO, and Dott COO Maxim Romain continuing to serve as COO of the merged entity. Alex Gayer, Tier's Chief Financial Officer, will continue to serve as Chief Financial Officer.
The merger also attracted additional funding from existing investors, with Mubadala Capital and Sofina leading a new round of financing for Tier and Dott, respectively, while Estari, M&G, Naspers, Novator and White Star Capital also participated, raising a total of €60 million. Estari, M&G, Naspers, Novator and White Star Capital also participated, raising a total of €60 million, but SoftBank Vision, one of Tier's backers, did not participate in the round.
Shift in business focus
Tier and Dott have also been working on expanding their areas of operation, with Dott now active in 40 cities in seven countries. Tier has 40,000 scooters and 10,000 bikes and has raised a total of €210 million in equity and debt. Tier currently operates in Germany, Austria and Poland, as well as Qatar, Saudi Arabia and the United Arab Emirates, and has acquired Coup, which operates electric motorbikes, primarily in Berlin, and in raising its Series C funding, said it would build a network of user-replaceable batteries in European cities. Dott's Matthieu Faure said the company's operating model is effective and profitable in most cities, but it lacks scale, and that the merger with Tier will combine the resources of the two companies to increase both the number of vehicles and scale of operations, and will further enhance profitability. Tier is currently more profitable than Dott and the merger is expected to generate revenues in excess of €200 million.
Scale in the sharing industry
As competition intensifies in the market, large platforms can achieve higher efficiency and lower costs by integrating resources, such as vehicles, technology, user data, etc. This economy of scale will make the integrated company more competitive, which is why Dott and Tier are merging. Shared mobility has a large initial investment and high operating costs, and the key to enterprise development is to continuously expand the scale, and only on the basis of a certain scale can an enterprise realise the benefits of scale and then achieve profitability. In the field of shared travel, the concept of network effect exists. When both the number of users and the number of vehicles increase, each new user joining will increase the value of the whole system, and vice versa. Thus as scale increases, shared mobility platforms will become more attractive, attracting more users and investors, creating a positive feedback loop.Our Gravity also have more and more shared mobility projects in the pipeline, and we hope that we will be able to do better and better in this area!
-Gravity Ebikes
info@gravitysz.com
19th/01/24