Investors in a Dallas-based special purpose acquisition company vote on Tuesday on merging with Bird Rides Inc. to take the unprofitable scooter company public.
Switchback II Corp. — the SPAC formed by two former oil and gas executives — said it expects the combination with Los Angeles-based Bird to close on Nov. 4. The combined company’s stock will trade on the New York Stock Exchange under the ticker symbol BRDS, while its warrants will be listed as BRDS WS.
The deal, first announced in May, will bring the company about $384 million in additional operating cash flow, according to Bird.
Since its founding in 2017, Bird has moved into more than 350 cities. It offers rentals for three different scooters and a new electric bike, with a mission to help cities achieve cleaner air and less traffic. Its vehicles are also available for purchase.
Switchback II is the second iteration of Switchback Energy Acquisition, formed in 2019 by Jim Mutrie and Scott McNeill, both former executives at Dallas-based oil and gas driller RSP Permian, which sold for $9.5 billion in 2018. It has targeted companies involved in energy transition or sustainability.
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Earlier this year, Switchback I combined with ChargePoint Inc., a California-based company founded in 2007 that is building an electric vehicle charging network. It’s now listed on the NYSE under ticker CHPT.
Bird isn’t yet profitable but reported encouraging financial results for the three-month period that ended June 30. Revenue for the period hit $60 million, a 477% increase over the same period in 2020 and a 43% jump from the 2019 period. Net loss for the quarter was $43.7 million, a slight improvement from the $50 million loss in the year-ago period.
After the market closes on Nov. 15, Bird is set to announce its financial results for the quarter that ended on Sept. 30.
During its last earnings call in August, the company also launched the Bird Bike, its first e-bike that it hopes can claim part of the $20 billion consumer e-bike market in the U.S. There are two bike frame options available on Best Buy’s website, with one currently going for $2,000 and the other priced at $2,300, which is currently sold out.
Bird believes its new fleet manager business model is key to gaining profitability because it transfers the mechanical responsibilities of Bird vehicles to the fleet managers. Through this model that began shortly after the start of the pandemic, contractors pay an upfront fee to manage a “fleet of birds” in their own city. The managers are promised 80% of profits from each ride when their debt is paid off, but that also has to go toward repairs and other costs.
“Over the past year, we evolved to the fleet manager operating model, developed to target and solve the prior fixed cost component of our business, which was especially challenging during winter months,” said Bird CEO Travis VanderZanden in an investor call with Switchback II in May.
VanderZanden is a former chief operating officer at Lyft and head of driver growth at Uber.
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November 02, 2021 at 06:01PM
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