Consolidation will be difficult
Earlier this week, European micromobility corporations Tier and Dott stated that they had agreed to merge. The businesses, which provide scooters and bikes to hire, additionally plan to lift €60 million from a few of their present traders and plan to shut the deal inside two months. The businesses hope they’ll turn into worthwhile in the event that they work collectively, my colleague Romain reported.
This looks as if a strong consequence for the 2 startups, since they seemingly weren’t going to succeed in IPO scale on their very own. In spite of everything, if the businesses weren’t going to outlive as solo entities, it is smart to at the least strive one other route.
Final yr I got here up with a speculation about M&A in 2024; I used to be impressed by Getir buying FreshDirect to fill a spot it wanted to probably attain profitability. Whereas FreshDirect isn’t a startup, my speculation was that we’d see quite a lot of consolidation this yr as startups realized they’d have a a lot better likelihood of reaching scale — or be extra engaging to potential acquirers — in the event that they teamed up with one other related startup.
I ran my speculation by some M&A legal professionals to see if it aligned with what they have been seeing, and whereas they count on M&A exercise to extend this yr, they really suppose offers just like the one between Tier and Dott shall be few and much between.