E-scooter rental companies Tier Mobility and Dott announced on Wednesday that they will merge to form Europe’s largest operator, with their investors injecting an additional 60 million euros ($66 million) into the combined business.
The merged entity, which will initially continue to operate both brands, will offer e-scooter rental services in 20 countries and will achieve an annual turnover of 250 million euros.
Tier and Dott offer rides in many cities, including Berlin, Brussels, Dubai, London, Paris and Rome.
The merger may require approval from certain regulators and both companies said it was subject to several conditions.
After an initial period of rapid expansion, e-scooter rental companies are facing stricter regulations and more demanding customers. Further waves of consolidation are expected for the app-based sector as many operators have struggled to turn a profit.
Amsterdam-based Dott has raised more than $210 million, while Berlin-based Tier announced a $250 million fundraising in 2020, led by Softbank 9984.T.
The new combined company will be headquartered in Berlin, with Tier Managing Director Lawrence Leuschner serving as Chairman and Dott Managing Director Henri Moissinac serving as Managing Director.
“By bringing together Tier and Dott, we are well positioned to enter the next phase of growth and further accelerate our path to profitability,” Moissinac said in a statement.
The transaction is supported by a group of existing shareholders, led by Abu Dhabi state investor Mubadala Capital and Belgian investment company Sofina SOF.BR.
The world’s two largest e-scooter rental companies are Lime and Bird, both based in the United States. Bird announced last month that it would restructure its business to focus on profitability as part of Chapter 11 bankruptcy proceedings. ($1 = 0.9137 euros)