Bird Rides will go public by merging with a blank-cheque company, securing a new source of capital after venture capitalists largely lost interest in money-losing scooter rental startups.
A special purpose acquisition company called Switchback II Corporation will take Bird public and provide as much as $428 million in funding to the business. The deal has an enterprise value of about $2.3 billion, the companies said in a statement on Wednesday.
The transaction includes private funding from Fidelity Investments, which had previously backed Bird, as well as a credit facility from other companies.
A former Uber Technologies executive, Travis VanderZanden, helped to start Bird in 2017. It dropped electric scooters onto the pavements of major cities and let customers remotely unlock and rent them using an app. The model was widely copied, including by Uber, and turned Bird into one of the fastest startups to reach a $1bn valuation.
It took only a few years for the scooter fad to fade, though. Bird and its closest competitor, Lime, cut staff and dialled back operations. Uber also retreated. The coronavirus pandemic dealt a further blow when people curbed travel and fled many of the city centres that scooter companies occupy.
SPACs provide a path to fundraising and the public markets that is seen as more friendly to cash-burning companies. Last year was by far the biggest for such deals, which have slowed in 2021. Bloomberg first reported in November that Bird was in early-stage talks to merge with a SPAC.
Switchback II listed in January and at first indicated it would seek to combine with an energy company. In a statement, Bird highlighted its green-energy credentials and said it would introduce additional vehicle options, such as bikes, in a bid to reduce use of gas cars.
“We plan to scale our platform to provide our low carbon transportation services to more people in more cities around the world,” said Jasmine Wallsmith, a spokeswoman for Bird.
The backing from Fidelity represents an apparent reversal for the investment firm. In December, Business Insider reported that Fidelity was looking to unload some Bird shares at a loss.