epa07627037 Women ride an CIRC e-scooter (former FLASH) in Herne, Germany, 05 June 2019. Even before electric pedal-scooters are allowed nationwide on 15 June, a first provider will start a rental service in the Ruhr area. In the city of Herne, several dozens of electric scooters are to be put on the road from 05 June with the permission of local authorities. EPA-EFE/SASCHA STEINBACH
Circ, which was previously known as Flash, has raised at least €55m in venture capital funding and expanded to dozens of cities in less than two years © EPA-EFE

Bird Rides, which pioneered electric-scooter sharing in California, is in talks to buy Circ, a German rival that is led by one of Europe’s most prominent tech entrepreneurs.

Circ, which was co-founded by Lukasz Gadowski, who was also a co-founder of online food company Delivery Hero, has been seeking a buyer after struggling to raise the new funds it needs to continue its expansion, according to several people familiar with the two companies’ discussions. 

While talks are ongoing, a deal could allow Bird to close the gap on its Silicon Valley rival Lime, which is widely seen as leading in Europe, these people said. 

It would also mark the beginning of long-anticipated consolidation, after venture capitalists poured hundreds of millions of dollars into several European scooter-sharing start-ups

Terms of the deal, which would probably see Bird merge its European operations with Circ’s, could not immediately be learned but the purchase price is expected to fall short of the coveted “unicorn” status granted to tech start-ups valued at more than $1bn. It is possible the two companies could still fail to agree a deal.

Bird and Circ did not respond to several requests for comment. 

Berlin-based Circ, which was previously known as Flash, has raised at least €55m in venture capital funding and expanded to dozens of cities in less than two years. But so far, Mr Gadowski’s entry in the scooter business has struggled to achieve the same success as Delivery Hero, the food delivery company that is now worth more than €13bn.

Mr Gadowski is also an investor in Grow, a Latin American scooter start-up, and through his Team Europe venture has backed a range of other companies including flying taxi start-up Volocopter

After a rapid and costly expansion over the course of last year across Germany, Austria, Italy and France, as well as the Middle East, eastern Europe and the Nordics, Circ has been forced to hit the brakes in recent months. It laid off dozens of employees last year ahead of the winter season, when scooter usage tends to drop.

Circ has lagged behind European rivals such as Tier and Voi in financing, according to Pitchbook, which tracks venture investments. Competition in Europe has been intense, with several scooter start-ups, also including Dott and Wind, each raising tens of millions of euros. 

At the same time, other transportation apps such as Uber and Bolt have also tried to launch their own bike and scooter sharing businesses across Europe, crowding the continent’s capitals and tourist hotspots with multicoloured electric vehicles.

The two-wheelers are rented out via mobile app and tracked using GPS, allowing riders to start and finish a journey almost anywhere. Several cities, including Paris, have sought to impose greater order by running tenders that would limit the numbers of companies operating and imposing no-go zones in certain areas.

Bird is said to hope that securing a European partner will improve its prospects for winning operating licences from European cities. It had approached other scooter start-ups in Europe in the hope of striking a deal before discussions became more serious with Circ.

Bird was most recently valued at $2.5bn after raising $275m from investors, including the Canadian pension fund CDPQ.

Travis VanderZanden, Bird founder, said at the time that the company’s top priority had changed from “growth to unit economics”, following reports about its financial losses. The company laid off close to 5 per cent of its workforce in March last year.

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