Bird Global: From VC Unicorn to Chapter 11

Welcome to the 144th Pari Passu newsletter.

If you live in a big city, there’s a strong chance you’ve seen someone ride by on a shared electric scooter/bike or even have ridden one yourself. Over the past decade, these “micromobility” vehicles have changed the way commuters approach last-mile transportation and influenced the ways in which cities build new streets. Bird Global, better known as Bird scooters, was the first major mover in the micromobility space, and attracted substantial investor attention, raising hundreds of millions of dollars and becoming the fastest “unicorn” venture investment of its time. 

However, while dropping scooters on city streets was an easy way to rapidly scale, turning a profit was another story. This writeup explores Bird’s rapid rise to fame and enormous valuations, along with the issues that plagued its business model, including injuries, municipal lawsuits, and vandalism. We’ll also dive into the unit economics behind micromobility ridesharing to diagnose where Bird faltered. Additionally, we’ll examine Apollo’s unique form of scooter financing and how the firm leveraged Bird’s desperate need for outside capital in a Chapter 11 loan-to-own strategy. We’ll conclude with Apollo and the lender group’s outstanding turnaround of Bird and briefly compare it to its competitor, Lime.

9fin: Law firm DQ provisions are here, and people are upset

There’s a new front in the covenant wars and LME battlefield. According to several 9fin sources, sponsors are now adding law firms to DQ (“disqualified”) lists — language that discourages lenders from hiring certain counsels in future negotiations, especially in restructurings or liability management exercises (LMEs).

Historically used to block specific lenders from entering deals, these new provisions are now aimed at lender-side law firms known for tough tactics. Two versions are emerging: naming firms outright, or granting the borrower a one-time veto over the lender’s choice of counsel.

Sponsors believe this can smooth talks; lenders see it as a blow to their leverage. While some question enforceability, most agree it’s another sign of today’s competitive, supply-starved market tilting power toward sponsors.

Bird Global

Founded in 2017, Bird Global was a first-of-its-kind micromobility company with the goal of replacing car trips with a new category for short-distance transportation. Micromobility can be defined as transportation via lightweight vehicles, primarily e-scooters and e-bikes, that may be borrowed for short-term use within a city. Partnering with various cities, it was the first company to deploy shared electric scooters in the United States. 

Bird’s vehicle-sharing business encompasses both Bird vehicles (e-scooters and e-bikes) and its mobile app. To ride a Bird scooter, riders must download the Bird App, create an account, and use the app to locate a scooter, the locations of which are overlaid on a city’s map. From there, riders pay a fixed fee to unlock the vehicle and are charged per minute for the length of the ride. For reference, a typical fee structure might involve a $1 fixed charge, with the per minute charge ranging anywhere from $0.15 to $0.50, depending on the current market supply and demand for Bird vehicles. Riders complete a bird trip and stop being charged when the vehicle is parked in a designated area [1]. 

Shortly after Travis VanderZanden, a former Uber executive, founded the company in September of 2017, he deployed the first ten Bird scooters in Santa Monica, California. In just their first week, the vehicles logged thousands of rides. Over the next six months, Bird deployed ~1,000 scooters across the city of Santa Monica, with 50,000 people taking 250,000 rides during the same period [2]. For scale, at an estimated four to six million Uber rides in Santa Monica during 2017, Bird was still far behind traditional ridesharing but catching up.

Rapid Venture Capital Raises

Since Bird was proving itself to be the first mover in the micromobility market, it attracted enormous amounts of attention from venture capital funds. 

Series A Funding: On February 13, 2018, Bird completed its first capital raise for $15mm, led by Craft Ventures [2]. While the implied valuation was not publicly disclosed, it's estimated to have been sub-$100mm. Bird would use this cash to fund more fleet purchases and launch into neighboring cities, including Westwood and San Diego, California. 

Series B Funding: On March 9, 2018, just 24 days later, the company announced its second round of funding: a $100mm Series B raise co-led by Valor Equity Partners and Index Ventures, with existing investor Craft Ventures also participating. This time, Bird was raising at a $300mm valuation, implying the rapid growth in both micromobility adoption and hype surrounding the company. In a press release, Bird said the cash would help bring Bird’s fleet to 50 US markets by the end of the year [3]. 

Series C Funding: Three months later, on June 28, 2018, Bird raised $300mm of Series C funding at a $2bn valuation. This meant that Bird reached the coveted $1bn unicorn status in less than a year, making it one of the three fastest US startups to do so[4]. This raise garnered attention from major VC players, with Sequoia Capital leading the round, along with investments from Accel, B Capital, and other funds. As a part of the deal, Sequoia Partner Roelof Botha received a board seat [5]. In 2018, Bird generated $59mm of revenue, implying a 34x revenue multiple based on its $2bn valuation.

Series D Funding: Bird’s last substantial VC raise was in October 2019 when the company raised $275mm at a valuation of $2.5bn. This round was led by CDPQ (a massive Canadian pension fund manager) and Sequoia [6]. Occurring around a year-and-a-half after Bird’s June 2018 Series C round, this capital raise represents Bird’s need for a constant stream of outside cash to continue its expansion efforts, something we’ll touch on shortly. 

Circ Acquisition: Shortly after the Series D raise, in January 2020, Bird announced the acquisition of LMTS Holding S.C.A (better known as Circ), an international competitor to Bird in the micromobility space. Prior to the acquisition, Circ had raised ~$60mm in VC funding and had expanded to 43 cities in 12 countries across Europe and the Middle East [7]. Bird financed this acquisition via a $75mm extension on its previous Series D round. For Bird, inorganic growth represented a faster way to expand internationally, as Circ had already gathered the necessary municipal approvals for its fleet. 

In aggregate, these five capital raises provided Bird with $765mm of cash, which was enough capital to build out its own scooter line and carpet over 120 cities with thousands of micromobility vehicles. However, with Bird having been around for nearly two-and-a-half years, investors began to ask the important question: can these scooters earn back their own cost? 

Scooter Unit Economics 

“Gone are the days when top line growth was the leading KPI for emerging companies. Positive unit economics is the new goal line” – Travis VanderZanden, 2019 [6]. 

While Bird had rapidly expanded across over a hundred cities and grown massively popular with consumers, its legacy model was largely unprofitable. However, as the company matured, it pivoted to a (marginally) more sustainable model. To understand Bird’s evolution, let’s first review some key metrics we’ll return to:

• Vehicle Capex represents the cost to buy or build each unit and serves as the denominator for payback math.

• Service Life measures the time or mileage that a scooter stays in a rentable condition before retirement. While important for payback, it also drives depreciation calculation for scooters, impacting reported profitability. 

• Revenue per Unit per Day is a function of rides per deployed vehicle per day (RpD) and average revenue per ride, representing the actual market demand for scooters. As a reminder, Bird generated revenue from a fixed unlock fee and per minute charge.

• Cost per Ride can be thought of as COGS for scooters, representing payment processing, insurance, and field collection (field collection is the scheduled pickup of scooters so they can be charged, inspected, and moved to higher-demand locations). 

• Pay-Back Period is vehicle capex / gross profit per day (RPSD - cost per ride), representing the amount of time for Bird to recoup a scooter investment. If pay-back period exceeds service life, buying a scooter is not profitable, and vice versa. 

Bird’s launch fleet, originally deployed in Santa Monica, comprised rebranded Xiaomi M365 scooters. These scooters cost Bird ~$500 per unit and were what the company routinely deployed for around a year until October 2018. Notably, the Xiaomi M365 was a lightweight scooter designed for use by one rider with a weight limit of just 200 pounds. Additionally, they were intended for use only in mild weather on flat surfaces. However, Bird had no control over how its fleet of scooters was used, which resulted in significantly shorter service lives than expected. A fascinating study analyzed the economics behind Bird’s entry into the Louisville, Kentucky market [8]:

Bird initially deployed 129 Xiaomi M365 scooters into Louisville in August 2018. When examining four months of data, the following economics present themselves:

• The scooters generated an average of $12.91 in revenue per unit per day (average trip revenue of $3.70 and 3.49 average rides per day).

• The cost per ride, including charging, credit card fees, customer support, and repairs, was $2.75, resulting in a gross margin per ride of $0.95. This equates to a gross margin of $3.32 per scooter per day. Bird’s two largest per-ride costs, charging ($1.72) and repairs ($0.51), highlight the inefficiencies of its initial Xiaomi model. These consumer-grade scooters had short battery lives and broke easily, meaning Bird was constantly deploying personnel to service them, driving the above costs.  

• Additionally, Bird paid Louisville a $1 daily fee for each deployed scooter, bringing all in profit per scooter to $2.32 per day. 

Given these numbers, and assuming vehicle capex of $500 per scooter, the payback period on an average legacy Bird scooter was ~216 days. Traditionally, a payback period of this length would be desirable. However, the wear and tear these scooters were subjected to resulted in an average service life of just ~29 days (only seven of the initial 219 lasted more than 60 days). Importantly, this sub-30-day lifespan applied to Bird’s first batch of Xiaomi scooters; as Bird later invested in scooter R&D, this figure would drastically improve. This disconnect between payback period and service life resulted in a massive cash loss per scooter. To visualize these numbers another way, consider that over 29 days, Bird would generate $67 of profit per scooter. Comparing this to the $500 investment results in a substantial loss of $433 per scooter. Zooming out to a national scale, it’s clear how Bird ate up tens of millions of dollars in VC funding buying consumer-grade scooters over its first year. For example, while the specific number of consumer-grade scooters deployed was not disclosed, we can estimate, based on the launch timing of its later models, that Bird had deployed approximately 65,000 consumer-grade scooters up to that date. At the above loss of $433 per scooter, Bird would have burned ~$30mm on consumer-grade scooters before upgrading its scooter model in 2018. 

The company (and its investors) realized how poor these initial economics were. Bird needed to come up with a solution to its service life issue, which is why it launched the Bird Zero in October of 2018. The Bird Zero was the company’s first custom-built scooter model. It was designed to last 12 months, much longer than Xiaomi models (rebranded consumer-grade scooters, not Bird-built). It was heavier, had a lower center of gravity, and was equipped with larger tires to prevent wear. Additionally, it had 60 percent more battery life and was easier to locate via GPS, allowing for more rides per day [9]. These new scooters cost $650-$700 per unit, which was a notable increase, but was offset by a longer service life. 

By July 2019, the Bird Zeroes accounted for 75% of the fleet. Let’s revisit unit economics, this time for the Bird Zero. First, Travis VanderZanden claimed the fleet generated an average of $1.27 every ride [10]. This figure is notable because i.) it represents a firm-wide average, as opposed to a localized geography (such as Louisville), and ii.) it is an all-in profit, including every cost associated with the fleet, excluding R&D and SG&A. Second, let’s assume a rides per day figure of five, given the increased battery life and improved scooter quality. Factoring in the above figures yields a profit per scooter per day of $6.27. Assuming an average capex cost of $675, our estimated payback period for a Bird Zero is 107 days or just over three months. If we assume the Louisville average of 3.49 rides per day, this payback period expands to 152 days, but is still much faster than the original sample. 

These economics are clearly much better than those of Bird’s legacy fleet, and Bird would use its remaining VC funding to develop and deploy the Bird Zero, along with three additional scooter generations over the coming years. Each new scooter rendition provided improved unit economics per scooter; however, we’ll soon examine other factors that dragged Bird’s overall P&L. 

“Blitzscaling”, Municipal Pushback, and Other Local Issues

One thing we’ve yet to touch on is Bird’s expansion strategy. Bird employed what’s known as a “blitzscaling” strategy. Blitzscaling, based on the book by Reid Hoffman, involves prioritizing expansion and market dominance over operational efficiencies. Bird’s rapid expansion can be viewed through two lenses. We’ve already covered the first, which involved Bird rapidly deploying large amounts of scooters, before it worried about developing its own. This allowed the company to expand to more than 100 cities in just a year; however, as we know, the company used up large amounts of cash in doing so. 

The second form of blitzscaling was Bird’s relationship with the municipalities in which it deployed its fleet of scooters. As the first mover in the micromobility space, Bird employed an “ask for forgiveness, rather than permission” strategy as it entered virtually every major US city that allowed e-scooters. In just 14 months, Bird had scaled to operate in over 120 cities across three continents. By the beginning of 2021, this figure ballooned to over 300 across 25 countries, primarily in North America and Europe. However, Bird typically failed to complete the regulatory paperwork required to run a micromobility network (some cities didn’t even have regulations in place yet, given the novelty of the model)

Municipal Pushback:

For example, Bird faced legal trouble in its hometown of Santa Monica when the city attorney filed a criminal complaint on December 6, 2017. The city argued that Bird failed to obtain basic city business licenses and failed to comply with administrative citations. On February 14, 2018, Bird would plead no-contest to nine misdemeanor counts and pay a fine of $300,000 [11]. In isolation, this amount was nominal relative to the amounts of equity capital that Bird was raising at the time. However, we’ll soon see that as time progressed, these legal issues spread across Bird’s geographic footprint. 

Additionally, Bird began facing issues beyond just monetary fines. In March 2018, Bird and its competitors, Lime and Spin, deployed hundreds of scooters across San Francisco. In the following months, the city received nearly 1,900 complaints regarding scooter use. Just a month after launch, in April, the City Attorney of San Francisco issued a cease-and-desist letter to Bird, for “creating a public nuisance on the City’s streets and sidewalks and endangering public health and safety” [12]. The City also impounded more than 500 scooters shortly after [13]. From a unit economics standpoint, impounded scooters are not able to generate revenue, and cost Bird for every day they are inaccessible. Moreover, the city would charge an impound fee for Bird to retrieve its scooters, and the company ended up pulling out of the city entirely, after it failed to negotiate a viable permit program.

Bird faced some form of legal issue in nearly every city it expanded to. 

Vandalism:

Another issue that plagued Bird and its competitors was the vandalism of vehicles. Since scooters were simply parked on sidewalks or streets, the company had no way of protecting them from theft or abuse. As scooters filled city sidewalks, Instagram accounts like @birdgraveyard became popular, posting images, similar to the one below, of the “dead” scooters [14]. From a cost perspective, vandalism directly affects service life, increasing the loss per scooter.  

Injuries:

The last major issue Bird faced was rider injuries. Two peer-reviewed studies set the tone. A survey of two Los Angeles emergency departments logged 249 e-scooter injuries in twelve months, 40 % involving head trauma and fewer than one in twenty riders wearing a helmet [15]. The numbers dwarfed skateboard and bicycle injuries over the same period and supplied a constant stream of anecdotes for cities to reference in lawsuits. A separate Austin, Texas field study pegged the injury rate at 20 per 100,000 trips, with alcohol cited in a third of cases and surface hazards (potholes, curbs, etc.) in another third [2]. Notably, this rate was more than double that of traditional cyclists.

The legal and financial consequences piled up just as fast as the injuries themselves. Plaintiffs argued Bird knowingly deployed “mechanically deficient devices” without enforcing helmet use. Insurers responded by raising general liability premiums. Bird, already burning cash, began reserving against a growing docket of personal-injury and nuisance suits. Municipalities also aimed to curb injuries, with Chicago, for example, making its 2021 permit conditional on in-app helmet prompts and mandatory rider education modules. 

In short, Bird faced an array of legal, social, and operational issues as a result of its rapid expansion strategy. All of these issues translated into incremental costs in some way, turning “positive gross profit per scooter” into a substantial bottom-line loss. 

Continued Fundraising & SPAC Merger

Now that we’ve examined both the unit economics and unexpected issues of Bird’s business model, let’s return to its chronological story. By January 2021, Bird was once again looking to raise capital. However, after raising $765mm of Series A-D funding, traditional VC appetite had cooled, so the company opted for the issuance of $208mm of senior preferred convertible stock [17]. The financing closed in several draws between January and April 2021, and it featured an 8% PIK dividend and would convert to common stock at a 25% discount once Bird went public. The round was led by Bracket Capital, Sequoia, and Valor Equity. Ultimately, this fundraising served as a near-term bridge, with current investors providing Bird with liquidity to operate until it went public. 

In May 2021, Bird announced its merger with Switchback II Corporation, a SPAC led by investors Jim Mutrie and Scott McNeill. The merger valued Bird at $2.3bn. Notably, the deal was projected to leave Bird with net proceeds of up $428mm of cash in the form of [17]:

• $268mm from the cash in the SPAC trust (less any cash redeemed by SPAC shareholders).

• $160mm of PIPE capital led by Fidelity. As a reminder, a PIPE offering is a private investment in public equity, where select institutional investors buy newly issued shares (often at a small discount) outside the open market.

In addition to the cash raised, another component of the de-SPAC transaction was a $40mm commitment for a vehicle financing credit facility from MidCap Financial (an Apollo affiliate), the structure of which we will detail shortly. In November 2021, the merger was finalized, and Bird went public on the NYSE under the ticker BRDS. However, investor confidence in Bird was lacking. Notably, roughly two-thirds of SPAC shareholders exercised their redemption rights. As a reminder, redemption rights act as a “money-back guarantee” for SPAC investors, allowing them to exchange their shares for cash, rather than receive shares of the pro forma company. Redemptions of this magnitude signaled poor investor sentiment, as they opted to receive cash instead of equity upside in Bird. Additionally, these redemptions resulted in the removal of ~$213mm from the SPAC trust [18], which left Bird with ~$215mm of net proceeds, as opposed to the projected amount of $418mm. Following the listing, Bird’s share price fell by 14% within minutes, which further underscored the lack of confidence in Bird. 

Financial Profile 

Despite a surface-level appearance of positive unit economics, the true picture of Bird’s financial condition would be revealed when it went public via SPAC, as the company began publishing detailed public financials. Here’s what Bird’s first annual filing (2021) showed [19]:

Revenue grew at a CAGR of ~12% from 2019 to 2021, as Bird was quickly able to redeploy scooters following the initial onset of the COVID-19 pandemic. In terms of segments, 91% of Bird’s revenue came from ride-sharing, while 9% came from the sale of its custom scooters directly to other companies. 

Bird’s Global Footprint reached 400+ cities on four continents, with a lifetime total of 130mm rides. Over five million new riders registered in 2021 alone. In terms of vehicles deployed, the company managed an average fleet of 68,600, compared to 37,600 in 2020 and 43,500 in 2019. 

Fleet Usage marginally improved year over year, but was still down from pre-COVID numbers. In 2021, the company averaged 1.6x rides per vehicle per day, compared to 2.5x in 2019, a stark contrast with the 3.5x and 5x initially reported in Louisville and Santa Monica. This decrease in fleet usage makes intuitive sense, as Bird scaled beyond its scooter-friendly launch markets into cities with lower population density, unfavorable weather, or less friendly policy. Despite less usage, the company’s larger fleet size allowed it to increase revenue.

Gross Margin was positive for the first year in the company’s history at ~12%. This was primarily driven by a cost reduction attributable to the company’s pivot to a “fleet manager” model. Rather than deploy, charge, and repair vehicles itself, the company began outsourcing these operations to local fleet managers under revenue-sharing agreements in which the fleet managers bore much of the variable costs. This pushed the ride-sharing contribution margin (before depreciation) from 15% in 2020 to 44% in 2021.

Adjusted EBITDA improved from pre-COVID numbers but remained negative at ($81mm) relative to ($181mm) in 2020 and ($228mm) in 2019. The negative EBITDA is primarily driven by outsized corporate overhead and R&D costs. Capex (purchase of vehicles) of $216mm and interest expense of $6mm drove 2021 cash burn to $303mm. 

Liquidity at the end of 2021 was ~$230mm, comprising $129mm of cash and equivalents and $101mm available ($49mm drawn already) under the vehicle financing facility, which the company upsized to $150mm from the original $40mm in October 2021. 

As a reminder, as a part of Bird’s de-SPAC transaction, it received a $40mm vehicle financing commitment from Apollo, and as noted above, it was subsequently upsized to $150mm (although Bird would never reach this limit). Let’s quickly detail the structure of this vehicle financing facility [20]. Bird sold its scooters at cost into a bankruptcy-remote SPV named Bird US Opco, LLC and leased them back to the main entity BirdUS Holdo, LLC. Under the lease agreement, 100% of revenue from leased scooters was swept into the SPV cash collection account. Revenue in this lockbox would first be used to pay interest, amortize principal, and maintain a cash reserve. Interest on the facility was SOFR + 8.75% (3% floor). Cash sweep for amortization was 12.5% of net revenue. The SPV’s required cash reserve was 12.5% of outstanding principal. Once these requirements were met, the remaining cash would be released to Holdco.

The credit facility itself was limited to 85% of the total value of scooters in the SPV. Some quick math reveals the number of scooters held in the SPV. At an 85% LTV, the facility was ~$49mm drawn at the end of 2021, meaning Bird would have to hold at least $58mm worth of scooters in the SPV. Assuming a vehicle cost of $650, Bird would have to hold ~90,000 scooters in the SPV. With this in mind, we can infer that Bird moved the entirety of its fleet (deployed and undeployed) into the SPV, considering Bird averaged ~69,000 deployed scooters during 2021. In terms of new scooter financings, credit would be advanced at a 70% advance rate, meaning if Bird wanted to purchase a $650 scooter, it would have to contribute $195 of cash, while drawing $455 from the credit facility. 

This structure was favorable to Apollo for a few reasons. First, by holding scooters in a bankruptcy-remote entity, Apollo holds an indisputable lien on Bird’s primary hard assets, which insulates it from a parent company bankruptcy. Second, all cash from ride-sharing first flows through the SPV to pay interest and principal, protecting Apollo from downturns in the event of outsized seasonality (or another global pandemic). Third, the cash reserve account provides additional protection in the event of a bankruptcy. 

Drivers of Distress

By the end of 2021, Bird could boast scooters that technically paid for themselves (from a positive unit economics standpoint) and, for the first time, a slim but positive gross margin. On paper, it looked like the unit‑economics fix that VC funds and SPAC investors had been waiting for. Beneath that headline, however, cash was still bleeding, and the company faced an array of operational and legal issues. The next section walks through these issues one by one, showing how they compounded to strain Bird’s liquidity. 

Revenue Restatement:

In November of 2022, Bird filed an 8-K revealing the company had inflated 2020-2022 revenue by recognising certain unpaid ride balances (for which collection was not probable due to insufficient rider wallet balances) as sales [21]. The company declared its prior financials as no longer reliable, and the adjustment reduced historical revenue by $29mm in total over those three years. While this adjustment did impact reported profitability, it was nominal for a company burning hundreds of millions in cash each year. The more notable impact was on Bird’s share price, which fell roughly 40% that November. This restatement, combined with continuous visible cash burn and going concern warnings, caused Bird's share price to cascade downward. The resulting drag on investor sentiment would almost effectively shut out Bird from continued equity financing, which had historically been the company’s largest source of cash. 

However, Bird did retain one potential source of equity capital. In May of 2022, the company entered into a $100mm Standby Equity Purchase Agreement (SEPA) with Yorkville Advisors [24]. A SEPA  is essentially an on‑demand equity line that requires the counterparty (typically a specialist fund like Yorkville) to purchase small tranches of stock at a pre‑set discount to the market price following a draw notice from the Bird. Unlike a PIPE, no cash changes hands up‑front. Instead, the issuer taps liquidity only when needed. However, as we’ll soon see, the SEPA is subject to certain covenants and may be terminated if broken. 

Bloated Cost Structure:

A primary driver of Bird’s persistent negative EBITDA was a bloated opex cost structure. Bird’s costs outside of scooters included personnel costs, real estate, tech infrastructure, and R&D. While necessary for operations, Bird simply wasn’t generating enough revenue to cover its various costs, and the company failed to adjust. For example, 2022 general and administrative costs were, making up 96% of revenue. 2022 R&D spend was $40mm or 16% of revenue [22]. Combining these massive operating expenses with Bird’s slim gross margin is what resulted in consistent and large operating losses. 

While Bird did make efforts at cost reduction, including two substantial rounds of layoffs in June 2022 and January 2023, these efforts were too little too late. By the end of 2022, Bird reported just $39mm in cash, signaling that it had burned through almost all of its SPAC proceeds. This would mark the start of a liquidity issue, as Bird would have little future access to capital markets. The table below provides a high-level financial overview up to this point:

Rising Interest Rates:

Another issue for Bird was its rising interest obligations. In 2021, when it entered into its vehicle financing arrangement, SOFR was near zero. However, by 2023, it had risen to over 5%, turning the S + 8.75% coupon into a 14%+ effective rate. This nearly doubled Bird’s interest expense from $6mm to $11mm in 2022 on its vehicle financing facility. While nominal compared to revenue, this interest expense became material when Bird’s cash balance dwindled. By Q3 2022, Bird expressed concern at its ability to meet near-term debt obligations with the cash it had on hand (~$40mm) [22]. 

In December 2022, the company issued $30mm of second-lien convertible notes to investment firms Yorkville and Antara. These notes carried a 12% PIK interest rate, and “bolstered our liquidity outlook and believe we are positioned to reach our goal of adjusted EBITDA profitability in 2023” [21]. As a part of this transaction, Bird’s Canada business, which was historically the company’s most profitable segment, was consolidated under the Bird US umbrella. 

NYSE Delisting:

In May 2023, BRDS shares traded below $1, triggering a warning from the NYSE. Eventually, Bird’s market cap dropped below NYSE’s minimum of $15mm, and Bird’s shares were delisted. Importantly, Bird’s SEPA agreement with Yorkville detailed a minimum share price of $1 and a NYSE listing requirement [24]. As a result, the agreement was terminated, which Bird confirmed in its Q2 2023 quarterly filing. This was a substantial blow to Bird’s liquidity, as the company now had to rely on amending its convertible note agreement for a continued financing lifeline. 

The chart below details the severity of Bird’s decline in valuation. Notably, the business hadn’t fundamentally changed from its private to public days. Instead, this chart shows the candid scrutiny that public markets can provide to companies like Bird, which had previously raised capital at billion dollar valuations multiple times, despite burning enormous amounts of cash. 

Continued Rescue Attempts:

Through the remainder of 2023, Bird amended its convertible note agreement twice. The first was in March, adding $15mm of cash to the balance sheet and leaving the company with a Q1 unrestricted cash balance of $13mm. The second amendment was in September, adding $12.5mm and leaving the company with a Q3 balance of $10mm [19]. When observing this cadence, a pattern emerges in which Bird nearly runs out of cash before receiving incremental financing from investors. Therefore, while cash burn had improved materially year over year (~$50mm burn annualized compared to $161mm), Bird was still entirely reliant on Yorkville and Antara to keep the company afloat. 

At the same time as the second amendment above, Bird also acquired competitor “Spin” for $19mm. While M&A doesn’t seem like the best way to solve a liquidity issue, Apollo was on board and took advantage of the situation to amend and restate the vehicle financing facility with the following terms:

• A $6mm incremental advance to fund the Spin acquisition. 

• Maturity pushed from June 2024 to July 2025 with the amortization schedule reconfigured to match seasonality (shifting paydown requirements to the peak-revenue summer months).

• Collateral blanketed widened to include substantially all assets of Bird Global, Bird Rides, Bird Holdco, and all US subsidiaries, including Spin.

• The scooter lease agreement was unwound, and all vehicle titles were transferred back to Bird Rides, Inc. This meant Bird US OpCo no longer owned the scooters, swept cash, or received rent payments from Bird US HoldCo. Instead, Apollo’s new first-lien facility acted as traditional first-lien debt, expanding the collateral package but lending to the broader operating entity, rather than a bankruptcy-remote SPV.

This transaction was notable in that, while on the surface it extended Bird’s runway by a few months, it also perfectly positioned Apollo for a loan-to-own strategy. The firm now had a first priority lien on Bird’s entire US enterprise, including its IP. 

Restructuring Support Agreement and Chapter 11

By Q3 2023, Bird had accumulated a deficit of $1.6bn in cash losses [1]. It seemed that by Q4 2023, creditors and investors finally took notice and refused to provide Bird with any new financing. 

In December, the company inevitably ran out of cash once again (reporting just $3.25mm as of the petition date), and attempted to negotiate with lenders. This time, lenders were only willing to negotiate in court. On December 20, 2023, first-lien lenders (Apollo / MidCap), second-lien lenders (Yorkville, Antara, etc.), and the company signed a Restructuring Support Agreement, and Bird Global, Inc. filed for Chapter 11 bankruptcy in the Southern District of Florida. Notably, only Bird’s US entities (the ones shown in our graphic above) filed. This was possible as Bird’s international entities held no debt or hard assets, and existed only to sign the various legal agreements required to operate in different countries and cities.

The RSA, comprising two primary steps, addressed the capital structure below:

One note on the chart above: the $600mm of estimated general unsecured claims in the disclosure statement does not include funded debt; instead, it represents the substantial amount of injury and municipal legal claims against the company. 

The first component was the approval of a $25.1mm new-money DIP facility, issued by first-lien and second-lien lenders. To illustrate the urgent need for this new money, consider that the debtors reported just $3.25mm of unrestricted cash as of the petition date. Given the company’s rate of cash burn, without the DIP money, it would be forced to shutter operations within weeks. 

Apollo provided $19.5mm of new money, while the entirety of its $41.5mm first-lien claim and $2.8mm of accrued interest was rolled up into the DIP facility, creating a ~$65mm senior DIP tranche. $5.1mm of new money was provided by second-lien lenders, along with the roll up of $4mm in principal, creating a ~$9mm junior DIP tranche [1]. 

The second component of the RSA was a Section 363 asset sale, in which Bird Scooter Acquisition Corp. would serve as the stalking horse bidder. As a reminder, the stalking horse bidder serves as a guaranteed buyer if the 363 auction does not gather other competitive bids.  See our writeup on Section 363 for an in-depth explanation of 363 sales, stalking horse bidders, and credit bids. Bird Scooter Acquisition Corp. was composed of both first and second-lien debt holders. While specific equity allocation details are unavailable, we can reasonably assume Apollo/MidCap, as the first-lien lender, held a majority stake in Bird Scooter Acquisition Corp. 

The stalking horse bid itself was $71mm credit bid by second-lien lenders which included the assumption of Apollo’s $65mm DIP claim (inclusive of new money DIP financing) as a first-lien exit loan. The exit facility carried a rate of SOFR + 7.0%. These two bid components implied a total consideration of $136mm. 

Notably, under the plan, the only recovery for unsecured claims, which consist of various municipal and tort claims against the company, is to come from the proceeds of a lawsuit against Talon Auto, Inc. for the unlawful removal of scooters in San Diego. Litigation is still ongoing, so unsecured claims have yet to receive any recovery from the bankruptcy [22].

Third Lane Mobility

The 363 auction gathered no competitive bids (although there were rumors of interest from strategics). Therefore, Bird Scooter Acquisition Corp. acquired substantially all the assets of the debtors, including equity interests in its international subsidiaries, at a TEV of $136mm, and rebranded the overarching entity from Bird Global to Third Lane Mobility. The $136mm price tag represents just 7% of its peak $2bn valuation, and less than 20% of the total $765mm of VC cash that Bird raised.

While the Chapter 11 process cut $71mm of debt, the real turnaround for Bird came from a change in leadership. Travis VanderZanden left Bird shortly before its filing in mid-2023. Following the sale, the lender group, led by Apollo, Yorkville, and Antara, installed co-CEOs Stewart Lyons and Michael Washinushi. Lyons was the former leader of Bird Canada and oversees global expansion and regulatory affairs for the new entity. Washinushi, the former CFO of Spin, leads the finance and operations side of the business [25]. 

Very impressively, Third Lane achieved a substantial financial turnaround in 2024. In 2024, the company posted $19.2mm of positive adjusted EBITDA, the first positive number in Bird’s history [26]. Additionally, the company is arranging $45mm in new financing to pursue new markets. This improvement came from an array of operational improvements that corrected some of the key errors made by Bird’s prior management team. 

First, Bird was much more selective with its geographical footprint, and the new entity had pulled out of underperforming geographies, downsizing from 400+ to 350 cities [27]. Now, as the company looks to expand again to 50 new cities, it is adopting a new strategy in which it proactively collaborates with cities and transport and ticketing providers, rather than simply dropping scooters in. Additionally, Bird has partnered with Lyft to integrate vehicles into its app in 25 US cities [28]. 

Operationally, Bird now uses both an in-house and/or fleet manager scooter deployment model, depending on the specific demand/municipal requirements of each geography [29]. Additionally, Bird cut much of the bloated G&A costs that were previously dragging down profitability. This included everything from SIM card contract renegotiations (reducing GPS tracking costs) to head office cost-cutting. All in all, Stewart Lyons doesn’t credit any one significant change; instead, he attributes Bird’s turnaround to a shift in mindset, saying “There’s no silver bullet, that $50mm [EBITDA] swing came from 20 significant decisions, not one” [29].

Bird vs. Lime

Before we conclude, let’s take this opportunity to quickly examine Bird’s direct micromobility competitor, Lime, which has experienced outsized success relative to Bird. Lime was also founded in 2017 and rode the same wave, serving many of the same markets as Bird. For perspective, Lime recorded $686mm of net revenue and $140mm of adjusted EBITDA in 2024, and manages a fleet of roughly 400,000 vehicles, compared to Bird’s peak of ~110,000. There are a couple of key differences between Lime and Bird’s original strategy:

The first difference was in the deployment and charging model. Lime utilizes an in-house strategy in which employed operations managers quickly respond to any issues with the scooter. When a scooter self-diagnoses an issue, it is flagged for repair and cannot be rented until a team member returns it to a warehouse, inspects and/or fixes it, and redeploys it [30]. This is a stark contrast from anecdotal reports under Bird’s fleet manager model, which fleet managers described as cutthroat. Under Bird’s contracts with its fleet managers, the managers would be required to meet select KPIs. Still, they would sometimes go to any means necessary, including stealing parts from other managers’ fleets or even deploying subpar scooters to meet quotas [31]. Lime took advantage of its internal controls to pitch and win agreements with cities on better terms and was able to scale without the issues that plagued Bird.

The other difference had to do with the companies' approaches to their balance sheets and capital markets. Bird went public in 2021, when it was still iterating scooter versions and employing its blitzscaling model. This exposed its flaws, including its revenue reporting mistakes, to the public markets, which are much less forgiving than Bird’s original VC investors. When Bird’s share prices tanked, the company would be unable to secure any new equity financing, and it was ultimately forced to file for bankruptcy. Lime, on the other hand, is not yet a public company. While the company has signed a merger agreement with the SPAC CoreScience Acquisition, the deal has not yet closed. Lime is in a much better position to become a public company, with substantial positive EBITDA and an ironed-out operational strategy. 

Conclusion & Takeaways

Bird’s downfall can ultimately be attributed to the blitzscaling strategy. While the company was able to rapidly accumulate millions of users across hundreds of major geographies, it was never able to turn this user base into a profit. However, Lime’s success (and Bird’s turnaround) proves that it isn’t the business model itself, but the way Bird was managed that drove it into the ground. Bird’s bloated cost structure, municipal lawsuits, injury claims, and lack of control over its scooters, combined with a premature de-SPAC transaction, served as a detriment to investors’ perspective to the point at which the company could not raise any more outside capital, on which it was entirely reliant. 

Bird also serves as a clear example of winners and losers in the capital structure. The clear losers were the VC funds, who contributed hundreds of millions of equity capital during Bird’s rise to fame, only to be left with little to nothing, depending on if/when they sold. 

Apollo, on the other hand, was able to gain control over Bird’s most important hard assets (its scooters) for a $40mm initial commitment, with significant protections in an SPV. When it became clear Bird would soon end up in court, the firm funded just $6mm of incremental debt, in exchange for a first-lien over the entire enterprise, which it soon turned into a controlling equity position. 

All in all, Bird highlights the fact that global presence, investor hype, and rapid growth do not always equate to a good business.

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