Micromobility operator Helbiz has announced that it has signed an Agreement and Plan of Merger with Wheels Labs as it looks to accelerate its path to profitability.
On a combined basis, the acquisition of Wheels would deliver more than $25 million in revenue for the full year of 2022, doubling Helbiz’s 2021 annual revenue.
Wheels CEO Marco McCottry, who has worked for Bird, Ofo, and Uber, will lead Helbiz’s North America micromobility business upon completion of the merger, which is expected to close in November 2022 subject to standard closing conditions.
The deal would expand Helbiz’s vehicle portfolio to include Wheels’ novel sit-down e-scooter, while bringing a user base of more than five million people and exclusive contracts serving B2B partners and universities.
“By adding Wheels’ base of B2B and B2C subscriptions, we are able to diversify our company and help build the type of sustainable business needed in micromobility,” Helbiz’s CEO and Founder Salvatore Palella told Zag Daily. “This will help us achieve profitability earlier than we had previously been anticipating.”
The acquisition of Wheels would expand Helbiz’s core mobility business, bolstering the combined company’s ability to operate in 67 markets globally.
Together the companies expects to achieve a positive gross profit margin within the next nine months, and to reach profitability at the operating level within the next two years.
“We intend to restructure the combined company to accelerate our path to profitability by a combination of higher margin from the Wheels business, operational savings from redundancies across both companies, and reductions in the cost of revenue,” said Helbiz CFO Giulio Profumo.
Helbiz expects Wheels to bring a business model that combines dockless rental licences in cities, direct partnerships with universities or businesses, and month-to-month rentals for individuals, including it being the only operator to serve all L.A. neighbourhoods.
Wheels is also the exclusive micromobility vendor for E&I Cooperative Services, enabling more access to university procurement. Furthermore, month-to-month rental means Wheels has become a preferred vehicle among food delivery drivers – which includes a direct partnership with Uber Eats.
Initially, Helbiz users will see links within the app to switch to the Wheels app to rent their vehicles. In the coming months, Helbiz intends to introduce a fully integrated app.