Generating a combined revenue of €250 million with 125 million trips per year in more than 20 countries, it is hoped that the decision will position the business to be profitable and support the widespread transition to sustainable transport.
Still subject to several conditions which require fulfilment, the transaction is expected to close within two months of this announcement.
Tier’s Chief Operating Officer Andreas Weinberger told Zag Daily: “Technically, the TIER holding company, incorporated in Germany, is acquiring the shares of the Dott holding company, incorporated in the Netherlands, in exchange for the issue of shares in TIER to Dott’s shareholders.
“The approach is to bring together the two companies in a joint entity, to create the champion shared mobility operator in Europe, with the scale and expertise to accelerate towards profitability. This is reflected in the leadership, with the founders of TIER and Dott working together to achieve this goal.”
Dott Co-Founder and CEO Henri Moissinac said in a statement: “By bringing TIER and Dott together, we are well positioned to capture the next phase of growth and further accelerate our path to profitability.
“We are very optimistic about the future of shared micro-mobility. Cities are adapting to reduce car dependency and encouraging people to make sustainable transport choices.”
The Berlin-headquartered united company will see some shift in positions: Lawrence Leuschner is to become Chairman, Henri Moissinac as Chief Executive Officer, Maxim Romain as Chief Operating Officer and Alex Gayer as Chief Financial Officer.
Co-Founder and CEO of Tier Lawrence Leuschner said: “I am delighted to join forces with Dott, further strengthening our position as the European micro-mobility champion and marking the next phase in the development of the industry.
“We are united by a shared vision of cities with more sustainable transport options and fewer cars, and we are committed to helping users and cities make this a reality. With an expanded footprint and combined expertise, I look forward to providing a record number of rides in 2024.”
Backed by a mix of existing shareholders from both Tier and Dott, the deal will see €60 million of investment in equity, led by Mubadala Capital and Sofina and also including: Estari, M&G, Prosus Ventures, Novator and White Star Capital.
This is to support the long-term visions of the newly joined business where both Dott and Tier already have combined operations in major global cities including Berlin, Brussels, Dubai, Helsinki, London, Madrid Paris, Rome, Tel Aviv, and Warsaw.
The joint entity is still holding initial discussions with cities to understand the most responsible way to serve them, as cities typically do not allow merged companies to hold two separate permits in the same market.
On this, Andreas told Zag Daily: “The joint entity will continue to operate under the TIER and Dott brands. Riders will be able to choose the vehicle which best suits their needs at any time, with bikes, e-bikes, e-scooters, cargo bikes, and a range of dockless and dock-based parking available depending on the unique needs of different cities.
“The single, joint entity provides opportunities for efficiencies and shared resources of both ground and operations teams such as vehicle maintenance and street teams and supporting head office functions.”
Andreas also confirmed that Nextbike, one of Europe’s largest docked bikeshare providers, will remain part of the Tier group.
Other questions that still need to be answered include what will become of the commitments, including financial, that Tier has made to cities via their RFPs, and also an open question for the cities concerns if they should scale back regulations that place financial burdens on scooter providers.