The Paris commercial court has accepted Cooltra offer to acquire Cityscoot. These two companies offer shared electric mopeds that you can unlock and use to get from one place to another. Cityscoot had been placed into receivership by court order 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 did it become more difficult to obtain rounds of financing, but also to obtain the lines of credit necessary to purchase new vehicles. It has fueled a wave of bankruptcies and mergers.
urban scooterone of Paris' leading micromobility services with its iconic white and blue electric mopeds, is the latest company to cease operations following a last-minute acquisition by Cooltra.
Cityscoot was the first company to introduce the shared electric moped concept in Paris, before scooters from American companies such as Lime and Bird and shared bicycles from Chinese companies such as Ofo and Mobike arrived in Europe.
The company proposed tens of millions euros from public and private 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 began to look at Paris as a potentially interesting market, including Cooltra and Yego. Lime even toyed with the idea of launching electric mopeds in Paris. Cityscoot, Cooltra and Yego won a bidding process organized by the city of Paris to limit mopeds to three operating licenses.
Cooltra is mainly acquiring a user base
And yet, just a few months later, Cityscoot failed to raise a new round of financing to keep the company afloat and went bankrupt. He was later placed into receivership by 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 on LinkedIn about his intentions to purchase Cityscoot. But the court rejected his offer, probably because he did not have sufficient financial backing.
Cooltra made another offer that primarily focuses on Cityscoot's assets, including its user base. Following today's ruling, only 30 employees will retain their jobs even though Cityscoot had more than 150 employees. According to court documents, Cooltra will spend 400,000 euros ($430,000 at current exchange rates) to acquire Cityscoot and plans to spend around 1.5 million euros ($1.6 million) over the next two years to finance the merger.
But Cooltra also wants to act quickly. The company says Cityscoot users will be able to connect to the Cooltra app with their existing login information starting tomorrow. Cooltra mopeds will also receive 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 declared bankrupt after acquiring spinand Tier and Dott announced plans to merge and form a single entity. I also went recently 120 people were fired. And super pedestrian close In the USA
It's a bloodbath for micromobility startups in the current economic environment. And Cityscoot's demise likely won't be the last company to file for bankruptcy in the space.
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