The Decline of the Sharing Economy...Electric Scooter Unicorn Bird Files for Bankruptcy

Bird, an electric scooter sharing company that once had a valuation exceeding 2.6 trillion won, has ultimately filed for bankruptcy protection after failing to overcome ongoing management difficulties.

On the 20th (local time), according to the New York Times (NYT) and others, Bird filed for bankruptcy protection under Chapter 11 of the bankruptcy code at the Florida bankruptcy court. Bankruptcy protection is a process approved by the court that temporarily suspends a company's debt obligations and aims to normalize the company through asset sales.

Bird was founded in 2017 by Travis VanderZanden, a former executive at the ride-sharing company Uber. It rapidly expanded its business by securing funding from well-known Silicon Valley venture capitalists such as Sequoia Capital and Accel Partners. Expanding its electric scooter sharing business to 350 cities worldwide, including San Francisco and Rome, the company’s valuation once exceeded $2.5 billion.

During the COVID-19 pandemic boom in 2021, Bird went public on the New York Stock Exchange through a merger with a Special Purpose Acquisition Company (SPAC). At the time of listing, Bird was valued as a unicorn company with a valuation exceeding $2 billion (approximately 2.6 trillion won). However, the pandemic dealt a severe blow, causing sales to plummet and ongoing management difficulties. After going public, Bird’s stock price crashed, and its market capitalization fell below $15 million, ultimately leading to delisting in September.

The NYT described Bird’s bankruptcy as a reflection of the decline of the sharing economy. Previously, Helbiz, a micro-mobility company listed on the Nasdaq, was delisted the day before, and competitor Tier Mobility conducted a third round of layoffs last month as part of intense restructuring, cutting more than 20% of its workforce.

Meanwhile, Bird plans to continue its electric scooter sharing business in cities worldwide during the bankruptcy protection period through efforts to improve its financial structure and normalize management. According to the financial statements Bird submitted to the bankruptcy court, the company needs $16.8 million by next month on the 12th to repay its debts. As of the end of the third quarter, Bird’s cumulative losses totaled $1.6 billion.