Nick Carey

(Reuters) – Bird Rides, an electric scooter rental business, plans to make use of most of the money it has raised by merging with a special-purpose acquisition company (SPAC), to grow in new markets and expand into new cities.

Bird will merge with Switchback II Corp, and begin trading on New York Stock Exchange Thursday or Friday under ticker symbol “BRDS”. This deal values the scooter startup at $2.3 Billion.

Bird’s Santa Monica office should receive $414 million. Chief Executive Travis VanderZanden explained to Reuters that around two-thirds will go toward expanding operations, while the remaining 20% can be used for launching businesses in new areas.

VanderZanden stated that “We intend to continue scaling up to all size cities in the U.S.A and Europe in particular.” I don’t believe our expansion to new cities will slow.

Bird’s August second-quarter results showed that the company was in 300 cities around the world when it released its August report.

VanderZanden stated that this number is now close to 350 cities.

As larger companies seek to manage tougher city regulations, consolidation is likely to occur in the scooter rental industry.

Bird’s CEO indicated that the company was confident in its 20022 revenue estimate of $400m because business is recovering from pandemic lockdowns. Rides increased by 43% during the second quarter, compared with pre-pandemic levels.

VanderZanden stated that SPACs are often criticized because they have many companies that have no revenues or that make wild predictions that don’t work. “We fully intend to execute against that forecast and feel good about the numbers we’ve put out.”