Paris’ commercial court has accepted Cooltra’s offer to acquire Cityscoot. These two companies provide shared electric mopeds that you can unlock and ride to go from one place to another. Cityscoot had been placed under court-ordered receivership several months ago.
As interest rates hovered around 0% in Europe, micromobility startups thrived. Europe became the perfect playground for scooter startups, bike-sharing services and electric moped companies thanks to dense cities combined with a low cost of capital.
But things have taken a dark turn with rising interest rates. Not only it became harder to raise funding rounds, but also to secure the debt facilities required to acquire new vehicles. It has fostered a wave of bankruptcies and mergers.
Cityscoot, one of the leading micromobility services in Paris with its iconic white-and-blue electric mopeds, is the latest company that is going to stop operating following a last minute acquisition from Cooltra.
Cityscoot was the first company to introduce the concept of shared electric mopeds in Paris, before scooters from American companies like Lime and Bird and shared bikes from Chinese companies like Ofo and Mobike landed in Europe.
The company raised tens of millions of euros from private and public investors, including Groupe RATP and Caisse des Dépôts. It expanded to other cities, such as Nice, Milan, Rome and Turin — Paris remained Cityscoot’s main market.
At the same time, foreign micromobility companies also started to look at Paris as a potentially interesting market, including Cooltra and Yego. Lime even played around with the idea of launching electric mopeds in Paris. Cityscoot, Cooltra and Yego won a tender process organized by the city of Paris to limit mopeds to three operating licenses.
Cooltra is mostly acquiring a user base
And yet, just a few months later, Cityscoot failed to secure a new funding round to keep the company afloat and filed for insolvency. It was later placed under court-ordered receivership. As part of this process, the court received several offers to acquire Cityscoot.
The company’s former CEO Bertrand Fleurose has been very vocal on LinkedIn about his intentions to buy Cityscoot. But the court rejected his offer, likely because he didn’t have enough financial backers.
Cooltra made another offer that mostly focuses on Cityscoot’s assets, including its user base. Following today’s ruling, only 30 employees will keep their job even though Cityscoot had more than 150 employees. According to court documents, Cooltra is spending €400,000 ($430,000 at today’s exchange rate) to acquire Cityscoot and plans to spend around €1.5 million ($1.6 million) over the next two years to finance the merger.
But Cooltra also wants to act quickly. The company says that Cityscoot users will be able to connect to Cooltra’s app with their existing login information starting tomorrow. Cooltra’s mopeds will also get new stickers to show that Cityscoot and Cooltra are now the same service to ease the transition.
As a reminder, 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 laid off 120 people. And Superpedestrian shut down in the U.S.
It’s a bloodbath for micromobility startups in the current economic environment. And Cityscoot’s demise is likely not the last company to file for bankruptcy in the space.
Image Credits: BrasilNut1 / Getty Images
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