Despite having attracted over $4bn of investment over the last five years, Bird says that unless it can raise additional capital, it may face bankruptcy in the next 12 months. The US e-scooter and e-bike share firm has always run at a loss and has now revealed that it also overstated its sales over the past two and a half years by an estimated $31.6m.
It’s also been losing a lot of money.
“Bird grew too quickly,” one former employee told the FT. “It launched in too many cities before it had a viable model. It was losing money on every ride, so the more cities and more rides it was doing the more money it lost.”
Or as CEO Shane Torchiana – who replaced Bird founder Travis VanderZanden in September – put it: “We don’t believe that selling $2 for $1 is a viable business strategy.”
While revenues grew 24 per cent in the first nine months of the year to $175m, net losses almost doubled to $322.3m.
Last month Bird pulled out of a number of US cities and completely withdrew from Germany, Sweden and Norway, as well as some other markets in Europe, the Middle East and Africa.
It said it wasn’t possible to build “an economically viable business” in these places and that this was “often due to the lack of a robust regulatory framework.”
Bird has now revealed that it overstated its sales over the past two and a half years by an estimated $31.6m. It said this was because e-scooter rides taken by customers without enough funds in their prepaid “wallets” were falsely being recognised as revenue.