commercial court of Paris has acceptable Cooltra’s offer to acquire Cityscoot. These two companies provide shared electric mopeds that you can unlock and ride to get from one place to another. Cityscoot was placed under court order several months ago.
As interest rates hovered around 0% in Europe, micro-mobility startups flourished. Europe has become the perfect playground for scooter startups, bike-sharing services and electric moped companies thanks to densely populated cities combined with low capital costs.
But things have taken a dark turn with the rise in interest rates. Not only has it become more difficult to raise financing rounds, but also to secure the debt facilities needed to acquire new vehicles. It caused a wave of bankruptcies and mergers.
Cityscoot, one of Paris’ leading micro-mobility services with its iconic black-and-white electric mopeds, is the latest company to go out of business following a last-minute takeover by Cooltra.
Cityscoot was the first company to introduce the concept of shared electric mopeds in Paris, before scooters from US companies such as Lime and Bird and shared bikes from Chinese companies such as Ofo and Mobike landed in Europe.
The company has raised tens of millions of euros from private and public investors, including Groupe RATP and Caisse des Dépôts. It expanded to other cities, including Nice, Milan, Rome and Turin — Paris remained Cityscoot’s main market.
At the same time, foreign micromobility companies also began to see Paris as a potentially interesting market, including Cooltra and Yego. Lime even toyed with the idea of launching electric mopeds in Paris. Cityscoot, Cooltra and Yego won a competitive process organized by the city of Paris to limit mopeds to three operating permits.
Cooltra is mostly gaining user base
And yet, just a few months later, Cityscoot failed to secure a new round of funding to keep the company afloat and filed for bankruptcy. He was later placed under court order. As part of this process, the court received several offers to acquire Cityscoot.
The company’s former CEO Bertrand Fleurose was very vocal on LinkedIn about his intentions to buy Cityscoot. But the court rejected his offer, probably because he did not have enough financial backers.
Cooltra has made another bid that focuses primarily on Cityscoot’s assets, including its user base. After today’s decision, only 30 employees will keep their jobs, even though Cityscoot had more than 150 employees. According to court documents, Cooltra is spending 400,000 euros ($430,000 at today’s exchange rate) to acquire Cityscoot and plans to spend about 1.5 million euros ($1.6 million) over the next two years to finance the merger.
But Cooltra also wants to act fast. The company says Cityscoot users will be able to log into Cooltra’s app with their existing login information starting tomorrow. Cooltra scooters will also get new stickers to show that Cityscoot and Cooltra are now the same service to ease the transition.
Recall that in other micromobility news, Bird recently filed for bankruptcy after acquiring Spin, and Tier and Dott announced plans to merge and form a single entity. Voi also recently fired 120 people. And Superpedestrian closed in the US
It’s a bloodbath for micromobility startups in the current economic environment. And Cityscoot’s demise likely isn’t the last company to file for bankruptcy in the space.
Image Credits: BrasilNut1/Getty Images
