Consolidation might be difficult
Earlier this week, European micromobility firms Tier and Dott mentioned they’d agreed to merge. The businesses, which provide scooters and bikes to lease, additionally plan to lift €60 million from a few of their present buyers and plan to shut the deal inside two months. The businesses hope they will develop into worthwhile in the event that they work collectively, my colleague Romain reported.
This looks as if a stable consequence for the 2 startups, since they possible weren’t going to succeed in IPO scale on their very own. In any case, if the businesses weren’t going to outlive as solo entities, it is sensible to at the least attempt one other course.
Final 12 months I got here up with a speculation about M&A in 2024; I used to be impressed by Getir buying FreshDirect to fill a spot it wanted to probably attain profitability. Whereas FreshDirect isn’t a startup, my speculation was that we’d see a variety of consolidation this 12 months as startups realized they might have a significantly better likelihood of reaching scale — or be extra engaging to potential acquirers — in the event that they teamed up with one other related startup.
I ran my speculation by some M&A attorneys to see if it aligned with what they had been seeing, and whereas they count on M&A exercise to extend this 12 months, they really assume offers just like the one between Tier and Dott shall be few and much between.
