The Paris Commercial Court has accepted Courtra's offer to buy CityScoot. Both of his companies offer shared electric mopeds that you can unlock and ride to get from one place to another. CityScoot was placed under court-ordered administration several months ago.
Micromobility startups have grown in Europe as interest rates hover around 0%. Europe's low capital costs and dense cities have made it the perfect playground for scooter startups, bike-sharing services and electric moped companies.
However, the situation took a turn for the worse as interest rates rose. Not only has it become difficult to raise funds, but it has also become difficult to secure the debt lines needed to purchase new cars. That fueled a wave of bankruptcies and mergers.
Cityscoot, one of Paris' leading micromobility services with its iconic white and blue electric mopeds, is the latest company to cease operations following its last-minute acquisition from Cooltra.
Cityscoot was the first company to introduce the concept of shared electric mopeds in Paris, before scooters from American companies like Lime and Bird and shared bikes from Chinese companies like Ofo and Mobike arrived in Europe.
The company has raised tens of millions of euros from private and public investors, including Groupe RATP and Caisse des Depôts. Although it expanded to other cities such as Nice, Milan, Rome and Turin, Paris remained CityScoot's main market.
At the same time, foreign micromobility companies such as Cooltra and Yego also began to look at Paris as a potentially interesting market. Lime even considered the idea of launching an electric moped in Paris. Cityscoot, Cooltra and Yego have won a bidding process sponsored by the City of Paris to limit the number of moped driving licenses to three.
Cooltra mainly gains user base
However, just a few months later, CitiScoot was unable to secure a new round of funding to keep the company afloat and filed for bankruptcy. It was then placed under court-ordered administration. As part of this process, the court received several offers to acquire CitiScoot.
The company's former CEO, Bertrand Fleuros, has been vocal on LinkedIn about his intention to acquire CitiScoot. However, the court rejected his offer, probably because he did not have enough financial backers.
Cooltra made a separate proposal that focused primarily on Cityscoot's assets, including its user base. Following today's ruling, only 30 employees will continue working at CitiScoot, despite having more than 150 employees. According to court documents, Cooltra spent 400,000 euros ($430,000 at current exchange rates) to acquire CitiScoot and plans to spend about 1.5 million euros ($1.6 million) over the next two years to fund the merger. That's what it means.
But Cooltra also wants to move quickly. Starting tomorrow, Cityscoot users will be able to connect to the Cooltra app using their existing login information, the company said. Cooltra mopeds will also receive new stickers to indicate that Cityscoot and Cooltra are the same service to ease the transition.
As a reminder, in other micromobility news, Bird Inc. recently filed for bankruptcy after acquiring Spin Inc., and Tear Inc. and Dot Inc. will merge to form a single entity The plan has been announced. Mr. Voi recently laid off 120 people.And in America, Superpedestrian was closed.
The current economic environment is a disaster for micromobility startups. And CitiScoot's demise likely won't be the last company in the space to file for bankruptcy.
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