The ailing e-scooter company Tier Mobility is merging with its competitor Dott. The new joint company will continue to operate under the Tier and Dott brands. The merger can be seen as a rescue measure for both companies. Tier recently laid off employees again due to the difficult economic situation. The company has cut around 400 jobs since November 2023. According to the Gründerszene, Tier and Dott jointly recorded a loss of 55 million euros last year.
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Huge loss in Tier Mobility valuation
“I am very pleased about the collaboration with Dott, which further strengthens our position as a European champion for micromobility and initiates the next phase in the development of the industry. We are united by a shared vision of cities with more sustainable mobility solutions and fewer cars, and we are committed to helping users and cities make this a reality. “I look forward to realizing a record number of trips in 2024 with an expanded presence and combined expertise,” says Lawrence Leuschner, CEO of Tier Mobility. Leuschner will relinquish his position as CEO and move to the supervisory board as “non-executive chairman”. Dott boss Henri Moissinac will take over his position.
The investors of both companies are already planning an initial financial injection on the occasion of the merger. The investment is led by Mubadala Capital and Sofina, as well as Estari, M&G, Prosus Ventures, Novator and White Star Capital. They are investing 60 million euros of capital to support the long-term vision of the new joint venture. However, the lenders value the merger between Tier and Dott at just 150 million euros – a huge loss in value considering that Tier Mobility was previously a unicorn with a valuation of two billion euros.
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Tier and Dott want to become “European champions”.
This development is not entirely surprising, as many e-scooter providers have been struggling with losses since last year. Tier Mobility has also given investors a lot of headaches recently. “The developments in Tier Mobility in particular are painful for us. Here, too, you learn once again how defenseless you are as an early-stage investor. Even if the company actually comes through well, this and other companies in our portfolio will still represent little value for early-stage seed investors,” said Oliver Holle, CEO of Speedinvest, an investor in Tier, recently in Trending Topics- Interview.
The conclusion of the contract is linked to conditions and only becomes effective when these are fulfilled, according to the press release. Final completion is expected in two months. Dott CEO Henri Moissinac is optimistic despite the difficult initial situation. “By combining, we are well positioned to achieve the next phase of growth and further accelerate our path to profitability. We are creating the European champion that offers our users the best experience,” said the future CEO of the joint venture.