The Paris Commercial Court has accepted Cooltra's bid to acquire Cityscoot. These two companies offer shared electric motorcycles that you can unlock and ride to get from one place to another. Cityscoot was placed under receivership following a court order several months ago.
In Europe, micromobility startups have thrived as interest rates remain at 0%. Europe's dense cities and low capital costs make it the perfect playground for scooter startups, bike-sharing services and electric motorcycle companies.
But as interest rates rise, the situation becomes bleak. It has become difficult not only to raise funds but also to obtain the debt facilities needed to purchase a new vehicle. This led to a wave of bankruptcies and mergers.
Cityscoot, one of Paris' leading micromobility services with its iconic white and blue electric motorcycles, is the latest company to cease operations following Cooltra's last-minute acquisition.
Cityscoot was the first company to introduce the concept of shared electric motorcycles in Paris, before scooters from American companies like Lime and Bird and shared bikes from Chinese companies like Ofo and Mobike arrived 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, while Paris remained Cityscoot's main market.
At the same time, foreign micromobility companies, including Cooltra and Yego, are also starting to look at Paris as a potentially interesting market. Lime has even toyed with the idea of launching an electric motorcycle in Paris. Cityscoot, Cooltra and Yego won a tender process organized by the City of Paris to limit the number of driving licenses for mopeds to three.
Cooltra has a majority user base.
But just a few months later, Cityscoot filed for bankruptcy, unable to secure new financing to keep the company afloat. He was later placed under custody following a court order. As part of this process, the court received several offers to acquire Cityscoot.
The company's former CEO, Bertrand Fleurose, has been very vocal about his interest in acquiring Cityscoot on LinkedIn. However, the court rejected his proposal because he did not have enough financial backers.
Cooltra made another offer that primarily focused on Cityscoot's assets, including its user base. Today's ruling means only 30 Cityscoot employees will retain their jobs, despite the company employing more than 150 people. Court documents show Cooltra is spending 400,000 euros ($430,000 at current exchange rates) 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 Kult also wants to act quickly. The company said Cityscoot users will be able to connect to the Cooltra app using their existing login details from tomorrow. Cooltra's motorcycles also come with a new sticker showing that Cityscoot and Cooltra are now the same service to ease the transition.
Of note, in other micromobility news, Bird recently filed for bankruptcy after acquiring Spin, and Tier and Dott announced plans to merge to form a single entity. Voi also recently laid off 120 people. And Superpedestrian closed down in the US.
The current economic environment is a bloodbath for micromobility startups. And Cityscoot's downfall likely won't be the last company in this sector to file for bankruptcy.
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