Consolidation will be sophisticated

Earlier this week, European micromobility firms Tier and Dott said they had agreed to merge. The businesses, which provide scooters and bikes to lease, additionally plan to boost €60 million from a few of their current traders and plan to shut the deal inside two months. The businesses hope they will change into worthwhile in the event that they work collectively, my colleague Romain reported.

This looks as if a stable consequence for the 2 startups, since they possible weren’t going to succeed in IPO scale on their very own. In any case, if the businesses weren’t going to outlive as solo entities, it is sensible to at the least strive one other route.

Final yr I got here up with a speculation about M&A in 2024; I used to be impressed by Getir acquiring FreshDirect to fill a spot it wanted to doubtlessly attain profitability. Whereas FreshDirect isn’t a startup, my speculation was that we’d see numerous consolidation this yr as startups realized they might have a significantly better probability of reaching scale — or be extra enticing to potential acquirers — in the event that they teamed up with one other comparable startup.

I ran my speculation by some M&A attorneys to see if it aligned with what they have been seeing, and whereas they count on M&A exercise to extend this yr, they really suppose offers just like the one between Tier and Dott will probably be few and much between.