Bird Secures $150M in Vehicle Financing from Apollo

Bird Secures Increased Vehicle Financing from Apollo

Bird, a leading shared micromobility provider, has announced expanded financial commitments from Apollo Investment Corporation. The existing vehicle financing credit facility is being increased from $40 million to $150 million.

Details of the Upsize

This increase will become effective upon the completion of Bird’s merger with Switchback II Corporation, a special purpose acquisition company (SPAC). The shareholder vote to approve this business combination is scheduled for November 2nd.

This announcement arrives shortly before Bird is expected to become a publicly traded company. It may be intended to bolster investor confidence prior to the company’s listing.

Financial Implications and Fleet Expansion

According to Yibo Ling, Bird’s CFO, the expansion of the credit facility reflects the robust cash generation capabilities of the company’s fleet of electric scooters and bicycles. This increased liquidity is expected to support the company’s growth initiatives.

The news follows Bird’s recent announcement regarding the manufacturing of a substantial number of vehicles – potentially in the tens or even hundreds of thousands – equipped with new sidewalk riding detection technology. This production scale necessitates significant capital investment.

Apollo's Funding Model

Apollo will finance the majority of these vehicle purchases. This arrangement allows Bird to make smaller initial payments, with a plan to fully repay the amount over approximately nine months as revenue is generated.

Capital Efficiency and Repayment Terms

Sources indicate that the vehicle financing already contributes to Bird’s capital efficiency. It provides access to funds during the winter months, when vehicle purchases are typically made, and allows time to generate revenue during the spring and summer.

The repayment terms of the credit facility remain consistent with the initial $40 million commitment, as detailed in Bird’s SEC filing. Repayment is tied directly to revenue generated by the financed vehicles, with Apollo’s collateral being the vehicles themselves and the cash they produce.

Alignment with Long-Term Goals

This upsize isn’t unexpected. Bird previously communicated its intention to utilize vehicle financing to cover the majority of its vehicle capital expenditures (CapEx) starting in 2022 and beyond, as outlined in its investor presentation from May. Apollo’s increased investment aligns with these stated objectives.