Integration can be complex
earlier this weekLater, European micromobility companies Tier and Dott said they had agreed to merge. The companies, which offer scooter and bicycle rentals, also plan to raise €60 million from a number of existing investors and aim to close the deal within two months. My colleague Roman reports that these companies hope to profit from the collaboration.
That seems like a good outcome for the two startups, who may not be able to reach IPO size on their own. After all, if these companies are not going to survive as independent entities, it makes sense to at least try another direction.
I was inspired by Getir’s acquisition of FreshDirect to fill the gap it needed to become profitable last year when I put forward a hypothesis about 2024 M&A. While FreshDirect is not a new startup, my hypothesis is that we will see a lot of consolidation this year as startups realize that if they partner with another company, they will have a better chance of reaching scale, or potentially Acquirers are more attractive. Similar startup.
I had some M&A attorneys run my hypothesis to see if it matched up with what they were seeing, and while they expected M&A activity to be up this year, they actually thought deals like the one between Tier and Dott would be few.
