Bird, the electric scooter company that was once valued at $2.5bn by investors, has filed for bankruptcy.
The news comes just five years after the environmentally friendly scooter company became the fastest start-up to reach a valuation of more than $1bn.
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Bird has around $3.25m left in cash but needs to gain “immediate access” to $16.8m to meet its financial obligations, according to bankruptcy court filings on Wednesday (21 December).
The company said: “Since Bird’s inception, it has had difficulties generating positive cash flow despite its growth efforts and relative market share compared to its competitor.”
The Chapter 11 bankruptcy allows Bird to restructure its financials without any disruption to its operations. The company has also entered a “stalking horse” agreement, which starts a bidding process between its lenders to get as much value out of Bird as possible.
Its lenders will set a beginning bid and open up to offers from external parties over the next four months, according to the court filings.
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By GlobalDataInterim CEO Michael Washinushi, who will continue his role before and after the restructuring, said the announcement “represents a significant milestone in Bird’s transformation”.
“We are making progress toward profitability and aim to accelerate that progress by right-sizing our capital structure through this restructuring,” Washinushi said.
“We remain focused on our mission to make cities more livable by using micromobility to reduce car usage, traffic and carbon emissions,” he added.
Bird was founded by former Lyft and Uber executive Travis VanderZanden in 2017. The company’s inception led to several copycats but the industry has struggled to reach major heights due to multiple issues including safety concerns and operating costs.
Bird’s popularity peaked before the Covid-19 pandemic.
