Modus Group explores options to scale CityBee; could seek equity investor – Chairman
Lithuanian conglomerate Modus Group is exploring options to scale the operations of its car-sharing arm CityBee, including attracting an equity investor, Chairman Liudas Liutkevičius said.
The group would consider ceding a minority stake in CityBee in case it decides to pursue raising equity capital, he said. The group handles the process internally and the exercise could take till the end of 2020, he added.
CityBee’s FY18 revenues stood at EUR 20.15m, up by 99% from EUR 10.14m in 2017, according to Modus Group’s annual report. Its EBITDA grew by 35% to EUR 2.13m last year from EUR 1.58m in 2017. According to the report, 2018 was the first profitable year for the company in Lithuania.
Modus invested EUR 10.1m into developing CityBee operations in 2018.
Liutkevičius declined to comment on the amount that CityBee could raise. The company is primarily interested in the added value an equity investor might bring to help accelerate growth, he added. An investor could be a global fund or a strategic player, such as car makers or companies developing solutions for autonomous vehicles, Liutkevičius added.
Aside from attracting an equity investor, Modus is also considering funding CityBee’s operations through a bonds issue or bank loans, he said, adding that the priority is debt-related funding.
CityBee was founded in 2012 in Lithuania. In 2018, it launched operations in Poland, and this year in Latvia and Estonia. It entered the new markets initially with cargo car-sharing services, Liutkevičius said, adding that it will be expanding its service offering.
In Lithuania, the company offers cars, light commercial vehicles, bikes and e-scooter sharing services, according to the group’s report. It has around 305,000 users in Lithuania and operates a fleet of more than 1,300 vehicles, 1,000 e-kick scooters and 250 bikes.
The company plans to expand its fleet to a total of 2,100 vehicles and 3,250 e-scooters and bikes by the end of this year in all countries where it operates, he added.
The company plans to further expand its fleet in all markets where it is already present, Liutkevičius said. It also plans to introduce a franchise model available for partners in new markets by the end of this year, he added. CityBee’s ultimate goal is to create a mobility network so that its cars could be used cross-borders in Europe, Liutkevičius said, without indicating a time frame to reach the goal. CityBee expects to offer cross-border journeys for its clients in the Baltics and Poland in 1Q20, he added.
Liutkevičius named the German Share Now as the key player in the global car sharing field. Share Now is a joint venture between German automotive groups BMW Group and Daimler, established in February 2019 as a part of the two carmakers' efforts to combine their offerings for car sharing, ride hailing, parking, charging and multimodal transport, and invest a total of EUR 1bn into the field, according to a press release at the time. Share Now had more than 4m customers and a fleet of 20,000 vehicles in 31 cities globally at the time.
CityBee employs a team of 90, he added.
Modus Group is owned by Lithuanian entrepreneur Kęstutis Martinkėnas, as reported. Modus Group reported sales of EUR 342.94m in 2018, up from EUR 273.03m in 2017. Its EBITDA stood at EUR 28.54m last year, up from EUR 22m in 2017, according to its annual report.
Aside from the car-sharing business, the group is active in automotive retail, energy and the real estate sectors, according to the report.
by Agnė Mažeikė in Vilnius
Full article on Mergermarket website: https://www.mergermarket.com/intelligence/view/2892662
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