(Bloomberg) -- Europe’s scooter startups Tier Mobility and Voi Technology AB have held early-stage discussions to combine their operations, in response to the impact of larger U.S. rivals on the continent, according to people familiar with the discussions.
The talks, which started in November, recently stalled after Voi concluded that it could continue its growth independently, one person said. All of the people asked not to be identified discussing private plans.
Fredrik Hjelm, chief executive officer of Voi, said via email that "other local players" had approached the company for merger talks, but declined to comment further on the discussions.
Lawrence Leuschner, co-founder and managing director of Tier, said via email Sunday that his company would "proceed with full force our standalone expansion," but added that at some point, "there will be consolidation."
The European scooter industry has become quickly congested, with a host of startups springing up in quick succession. Stockholm-based Voi launched in August, and Berlin’s Tier and Wind Mobility followed within weeks. Flash, the company created by Delivery Hero co-founder Lukasz Gadowski and also headquartered in Germany, has small-scale operations in Portugal, Spain and Switzerland, and is planning a wider European roll-out in the spring.
The arrival in Europe over the past year of U.S. rivals Lime and Bird Rides Inc. have caused local players to consider how to deal with competitors that have much deeper pockets. Both Lime and Bird have raised hundreds of millions of dollars and have been aggressively expanding across Europe. They’re already said to be seeking hundreds of millions more in funding.
Lime is already active in about 22 European cities, according to its website, a little more than a year after it announced its debut on the continent.
In comparison, Flash raised 55 million euros ($62 million) during its first funding round in August, Voi announced a $50 million initial round in November. Tier has raised about $30 million, and Wind about $22 million.
Aside from U.S. competition, investors in European scooter startups are concerned they will remain too fragmented to support successful fund-raises for all players, the people said. There are more than half a dozen comparably-funded players battling it out in Europe, compared to two or three frontrunners in the U.S.
Potential mergers are one of the routes Europe’s nascent scooter industry is considering taking to fight of the U.S. giants, but there’s also a fight for top talent. Voi has hired Lime’s Noa Khamallah to become its vice president of global strategy, while Matt Turzo left ride-hailing company Lyft Inc. to take the European chief operating officer role at Wind in November.
(Adds comment from Tier in 4th paragraph.)
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