US-based micromobility company Bird is pursuing additional sources of funding to avoid scaling back or discontinuing some or all of its operations across Europe and the United States.
The operator also said that factors beyond its control such as current market volatility could impact if and how it receives further equity or debt financing, according to a regulatory filing.
As of September 30, Bird had a cash balance of $38.5 million which it said would not be enough to cover expenses for the next twelve months. That is despite reporting a 19% increase in revenue to $72.9 million, compared to $61.1 million in the same period in 2021. However, Zag understands that additional revenue generated thereafter, along with incremental cost reductions will begin to realise in Q4 and an early 2023 target incremental of $30-$40M will help support the business into 2023.
Widely acclaimed for helping kick-start the e-scooter sharing boom in 2017, the micromobility pioneer plans to continue closely monitoring its operating forecast, reduce its operating expenses and pursue additional sources of outside capital to avoid cutting operations further.
Last October, Bird decided to exit three European countries (Germany, Sweden and Norway), and to wind down operations in several other small to mid-sized markets in the US, Europe, the Middle East and Africa.
The statement follows a misstep formally filed and acknowledged on Monday morning that Bird had overstated its revenue for more than two years by recognising unpaid customer rides in a U.S. Securities and Exchange Commission (SEC) filing.
Bird recorded revenue on certain trips even when customers lacked sufficient “preloaded wallet balances”, which it said was down to the company’s IT systems not capturing some failed payments after the completion of certain e-scooter trips. This revenue “should not have been recorded,” the company said. The IT issue has now been resolved and Zag understands Bird will implement procedures to avoid such a weakness in financial controls going forward.
Bird promised a complete analysis of the pre-loaded wallet balances, which it expects to have by the fourth quarter of 2022.
“Upon completion, we expect to record on-going breakage revenue and anticipate booking a true-up that would increase our revenues next quarter,” said Bird’s CFO Ben Lu in a statement.
Bird’s CEO Shane Torchiana said in an earnings call: “today’s macroeconomic environment and accordingly different market sentiment have caused us to revisit the strategy to tilt the focus more towards self-sustainability over growth. To be clear, we remain bullish on the long term growth prospects of the category but prefer a path that proves profitability before capturing the full market opportunity.”