Pioneering MaaS Start-Up Seeks Buyer, New Investors as Cash Crunch Worsens

MaaS Global, a pioneering mobility-as-a-service platform provider, is looking for a buyer, as it faces the prospect of running out of cash, Mobility Payments has learned.

The Finland-based company, known for its groundbreaking Whim app, has approached such companies as the Siemens Mobility subsidiary of Germany-based Siemens AG and Cubic Transportation Systems, part of U.S.-based Cubic Corp., Mobility Payments has learned. The MaaS start-up also is believed to have solicited offers from other companies in the mobility industry, including possibly U.S.-based Conduent Inc.  

MaaS Global founder and CEO Sampo Hietanen did not name the prospective buyers he’s talked to, but did confirm that he’s seeking an acquisition of the company as an option, in addition to trying to raise more funding from investors.

“We’re looking for solutions like we’ve been looking for ever since Covid,” he told Mobility Payments. “We have some solutions on the table, but it wouldn’t hurt to get more.”

But he acknowledged that the company’s cash situation is serious. And it’s been difficult to raise additional capital. Venture capital firms have become much more risk averse following the “financial crisis” brought on by the Russian war in Ukraine, he said. That followed the Covid-19 pandemic, which nearly dealt a fatal blow to MaaS Global by itself, he said.

“After Covid, the financial crisis has taken a toll on us,” Hietanen said, but adding: “What is serious? We are a start-up; we’ve been pretty much in a serious situation all our lives.”

Founded in 2015, MaaS Global has become the best known of the MaaS start-ups. Its platform brings together public and private transport mobility providers, enabling users to plan, book and pay for end-to-end journeys in the same app. The company has expanded from its Finnish base to several other European markets, in addition to Japan and, earlier this year, Brazil.

But even before the pandemic, MaaS as a technology was not living up to its promise. Then Covid caused use of mobility, especially public transit globally, to plummet. Usage has been returning, with Hietanen noting that MaaS Global revenue exceeded €1 million (US$1 million) last month, fueled by growth in such markets as Finland, Switzerland, Belgium, Brazil and somewhat in Japan. That is much higher than the monthly revenue the company recorded just months earlier, in December 2021, he said.

But it hasn’t been enough, said Hietanen, noting that more lucrative monthly subscription plans are not really growing because of changing consumer travel patterns caused by the pandemic.

And he said the problems raising funds has prevented the company from pursuing a B2C strategy, in which companies or other organizations would fund MaaS subscription plans for their employees, for example. That business model would be more sustainable than the start-up’s current consumer model. But it would take capital to build a critical mass of B2C business, said Hietanen, who–with a hint of urgency­–wanted it known that the company is looking for buyers or investors to fund that strategy.

“If there’s someone who wants to get into this, now’s the time to give me a call,” he said. “That I can easily say.”

It hasn’t been the first cash crunch for MaaS Global. Last year, it reportedly faced a financial squeeze, with press reports saying it had burned through most of the €60 million in funding it had raised as of that time. In August 2021, the company got a much-needed infusion of €11 million, which Hietanen told Mobility Payments at the time would help the company expand into “selected markets” and provide capital for continuing operations.

Maas Global made an acquisition last year, buying Spanish start-up Wondo. In March of this year, it bought another start-up, acquiring the Brazilian trip-planning and tracking Quicko app. The app also enables at least some of its half million users to buy tickets.

The acquisitions offered some revenue opportunities but also accelerated the cash burn.

And Hietanen at the time of the Wondo deal said the acquisition would help MaaS Global to “rapidly expand” into both the B2C and also B2B markets. But that apparently did not happen.

Moreover, both the Wondo and Quicko acquisitions were all-stock deals, with the app platforms acquired from transport infrastructure providers–Grupo Ferrovial in Spain and Grupo CCR in Brazil. These deep-pocketed companies received shares in MaaS Global but did not reportedly offer additional funding to the Finnish start-up. Hietanen acknowledged that neither is expected to provide an infusion of cash to MaaS Global now.

All this leaves MaaS Global in a precarious situation. Some observers believe that the start-up only has enough cash on hand to hold out for a matter of weeks.

Hietanen, when asked if the company was in danger of closing down, responded, “Of course we are.” But he was quick to note that it’s not the first existential crisis the company has faced:

“We have always been at the risk of closing down,” he said. “At the worst, we’ve been 15 minutes of closing some years ago right when Covid hit. But so far, we’ve been able to find (solutions).”

He added, however, that now, “It means that, yes, we are really seeking alternatives.”

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