MEXICO CITY (Reuters) – Latin American e-commerce company Peixe is in advanced talks to acquire electric scooter firm Grow Mobility, four people with knowledge of the matter said on Tuesday, potentially the latest deal in a crowded sector where profitability remains an elusive goal.
Terms of the deal are still being finalized. One scenario under discussion is a cashless transaction in which Grow would receive shares in Peixe, three of the people said, declining to be identified as the transaction is not yet public.
Grow, formed from the merger of Mexican scooter startup Grin and its Brazilian counterpart Yellow last year, was among Latin America’s most prominent startups, attracting interest from top venture capitalists in Silicon Valley.
But the Mexico City-based startup has struggled in recent months to find a sound business model, according to people close to the company.
Grow President Sergio Romo declined to comment. Peixe Chairman Felipe Henriquez did not respond to a request for comment. Peixe has also operated under the Groupon LatAm brand.
In recent years, scooter firms have won a following among consumers but have raised the ire of regulators and residents as the vehicles clutter sidewalks and other public spaces.
Grow’s hunt for a buyer reflects a broader shift in the scooter industry as entrepreneurs and investors realize that the sector can only accommodate so many players, analysts say.
“Most of these things have been quick boom and quick bust,” said analyst Bob O’Donnell of TECHnalysis Research.
“You’ve got a lot of people trying to see who can outlast the others…. And even there the question is, is it viable?”
Some tech industry insiders have become convinced that mobility startups for bikes and scooters make more sense as part of a larger portfolio, rather than as standalone companies.
In January, California scooter startup Bird said it would acquire European peer Circ, without disclosing financial details of the deal, marking further consolidation in the industry.
Reporting by Daina Beth Solomon and Julia Love; Editing by Edwina Gibbs