Consolidation may be difficult
Earlier this few days, European micromobility businesses Tier and Dott stated that they had decided to merge. The firms, that provide scooters and bicycles to lease, also want to raise €60 million from a number of their particular investors that are existing plan to close the deal within two months. The companies hope they can become profitable if they work together, my colleague Romain reported.
This seems like a outcome that is solid the 2 startups, given that they probably weren’t planning to attain IPO scale by themselves. In the end, in the event that ongoing companies weren’t going to survive as solo entities, it makes sense to at least try another direction.
Last I came up with a hypothesis about M&A in 2024; I was inspired by Getir acquiring FreshDirect to fill a gap it needed to potentially reach profitability year. While FreshDirect is not a startup, my theory ended up being if they teamed up with another similar startup.
I that we’d see a lot of consolidation this year as startups realized they would have a much better chance of reaching scale — or be more attractive to potential acquirers ran my hypothesis by some M&A lawyers to see while they expect M&A activity to increase this year, they actually think deals like the one between Tier and Dott will be few and far between.(* if it aligned with what they were seeing, and)
