Helbiz earns its name with punishing 2021 results – TechCrunch

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When Helbiz chose her name, did she know that her business would end up resembling her nickname so well? It’s an easy move to make, but one that seems fitting after reading Helbiz’s fourth quarter and full year 2021 earnings report, which was released through the second quarter of 2022.

Some say companies go public too soon or too late. Helbiz’s debut on the public market was perhaps too early. The startup was the first shared micromobility operator to go public through SPAC in August 2021, a deal that included a $26.5 million PIPE and around $24.5 million in net proceeds. When the company first announced its intention to go public, it expected $80 million in cash. (Many SPAC combinations in recent quarters have seen the expected cash proceeds dwindle before the deal officially closes.)

Since joining public markets, Helbiz seems to be discovering itself. What started as a shared micromobility company offering a combination of e-scooters, e-bikes and e-mopeds in Italy is now starting to look like the business equivalent of an amorphous blob.

Wednesday, Helbiz announces partnership with Aon Mobility Solutions‘ long-term electric car rental service, Flee, which will allow users in certain Italian markets to access the Flee service via the Helbiz app.

In Q3 2021, Helbiz began to diversify in increasingly weird ways. The company said it has started taking pre-orders for the Helbiz One, a retail e-scooter. Then it launched its first “ghost kitchen” in Milan, from which customers can order food from a set menu to be delivered via Helbiz scooters by “butlers”.

During the same quarter, the company launched Helbiz Live, a sports streaming platform that currently broadcasts Italian Serie B soccer, NCAA soccer and basketball, and MLB games.

You might be wondering what Helbiz is? But wait, there’s more.

Helbiz also reportedly runs a advertising company on its app that geo-targets runners with ads for local businesses, though its latest revenue report says next to nothing about that particular effort.

To make matters even stranger, crypto got involved. Last year, CEO Salvatore Palella was for follow-up by a group of investors who claimed they were defrauded by buying the HelbizCoin cryptocurrency, which was announced in 2018 as a way to allow users to rent vehicles. In a lawsuit that is still active, plaintiffs allege Helbiz kept the money and killed the crypto in a “pump and dump” scheme.

How does this infernal enterprise show up on the balance sheet? Let’s dig into the finances.

A hell of a business

Helbiz reported revenue of $12.8 million in 2021, which the company says is up 190% from $4.4 million in 2020. Encouraging? Think again ! These revenues are priced at a net loss of $72 million. Its operating losses were $59.1 million, which Helbiz attributes in part to the costs of launching its delivery and media businesses, as well as significant investments in product, technology, and infrastructure. and marketing.

In reality, a good chunk, $24.4 million, came from general and administrative expenses, including but not limited to a cheeky $2.97 million for Palella’s total compensation. That employee compensation alone was worth almost a quarter of Helbiz’s total revenue in 2021. And more than half of that compensation was an executive bonus — a bonus for what, we still wonder.

“2021 compensation was heavily impacted by IPO and new business start-up bonuses,” a Helbiz spokesperson told TechCrunch. “We have a strong corporate governance structure, with board committees overseeing and approving all relevant corporate activities, including compensation. Our CEO is the majority owner of Helbiz; its financial success is completely aligned with that of other shareholders and depends on the financial success of the company. He is fully committed, as evidenced by his recent purchase of 900,000 Class A shares and 850,000 warrants in the company, which increased his exposure.

In case you don’t have the balance sheet in front of youit also means that Helbiz spent more on the CEO’s salary than on R&D, which only cost the company $2.8 million in 2021.

Spending a lot of money on business isn’t necessarily a problem if the company has collateral, but Helbiz appears to be nearly cash-strapped, with around $21 million at the end of the year and a liabilities of $61.47 million. Additionally, with an average consumption of around $5 million per month, Helbiz likely has very limited cash reserves, given that we are reviewing its fourth quarter and 2021 performance in April 2022, i.e. say in the second quarter of the year.

Maybe that’s why the advice part of the company’s call was a bit light. Pretty much all Helbiz CFO Giulio Profumo offered in terms of the outlook for 2022 was a funny “we expect solid revenue growth in 2022”.

Helbiz executives did not answer any questions during the earnings call.

Unanswered questions

A serious question: Is Helbiz’s corporate philosophy based on the proven method of throwing wet spaghetti against the wall to see what sticks? And what sticks will magically help the company raise more capital?

Let’s take a look at the varied flavors of Helbiz and see if we can figure out which path the company is charting for itself, or if it’s completely adrift.

Despite its extensive business efforts, Helbiz’s revenue came mostly from its mobility segment, which brought in $9.9 million, or 77% of total revenue. Helbiz Live apparently earned an additional $2.8 million, which roughly accounted for the remainder of 2021’s revenue. According to Apptopia data, Helbiz Live was downloaded around 144,000 times, with 91.3% of downloads coming of Italy.

While the Helbiz Mobility app and the Helbiz Live app are currently still separate, during the earnings call, Palella expressed nothing but positivity and enthusiasm for turning the Helbiz app into something of a “super app” that offers several services to enable a “modern urban lifestyle”. .”

“We can do so much more, from advertising to financial services,” the executive said during the presentation.

We’ll ignore the mention of adding “financial services” to the app for now because, frankly, it’s getting hard to keep up with Helbiz’s business gymnastics. The company is currently trying to sell its €40 per month Helbiz Unlimited subscriptions, which include full access to Helbiz Live on all platforms, unlimited travel with Helbiz Mobility and, in at least one market, free delivery of food orders. . Helbiz said subscriptions grew by 246% last year. From what, the company did not say.

Helbiz has declared plans to expand its still unprofitable kitchen vertical across Europe and the United States, starting with Rome with ITA Airways, but did not provide any further guidance on this either. Maybe it’s because it’s too steep of a hill to climb. After all, as we’ve already established, it looks like Helbiz is running out of money. Without enough cash to grow, who knows if Helbiz Kitchen will ever turn a profit?

Oddly enough, Helbiz spends money on long-term branded games despite its somewhat dodgy financial situation. Stating that it has “reached an agreement with Miami FC to sponsor four United Soccer League championship seasons”, the company says it is on the hook for $525,000 this year and $650,000 in 2023 .

The final piece of the dodgy puzzle is the retail scooter. When Helbiz first announced plans to go into retail in Q3 2021, Palella boasted of a growing pre-order list. The company did not provide any updates on this in its last earnings call, such as when customers might expect to receive their Helbiz scooters or if the company is even manufacturing them. Some who know the space well say rocking a retail vehicle is nothing more than a publicity stunt. Helbiz did not respond to requests for comment.

When TechCrunch asked for more information, Helbiz said it was still finalizing details and production will start “soon” as the company aims to make its scooter available by the end of the year. ‘year.

“We hope to avoid the supply chain issues that other companies face, but we cannot guarantee it,” a spokesperson told TechCrunch.

¯_(ツ)_/¯

There’s a lot going on here, and it’s unclear if Helbiz actually has a cohesive strategy to grow their business holistically. Besides its questionable results for 2021, the company has seen some recent issues come to light, namely a “payroll update” that caused Helbiz US employees to be paid late.

One area that could potentially increase its revenue at a much lower cost than sports sponsorships and ghost kitchens is its advertising business. Again, little revenue has been generated from this line of business, but there is scope to expand beyond in-app and docking ads and in-vehicle advertising, as well as advertising while streaming Helbiz Live, the company told TechCrunch.

“Our CEO and the company’s belief is that advertising is a key part of making micromobility profitable while allowing prices to stay stable or drop so that offers become more accessible to everyone. That’s why we’ve dedicated a whole team just to ad tech,” a Helbiz spokesperson told TechCrunch.

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