E-scooter rental firms Tier Mobility and Dott said on Wednesday that they will merge to form the largest European operator, with their investors injecting an additional 60 million euros ($66 million) into the combined business.

The combined entity, which will initially continue to operate the two brands, will operate e-scooter rental services in 20 countries with annual revenue of 250 million euros.

Tier and Dott offer rides in many cities including Berlin, Brussels, Dubai, London, Paris and Rome.

The merger may require some regulatory approval and the two companies said it was subject to several conditions being met.

After an early period of rapid expansion, e-scooter rental firms have toughening regulations and more demanding customers, with further rounds of consolidation predicted for the app-based industry as many operators have struggled to make a profit.

Amsterdam-based Dott has raised more than $210 million, while Berlin-based Tier announced a $250 million fundraising round in 2020 that was led by Softbank.

The new combined company will be headquartered in Berlin, with Tier CEO Lawrence Leuschner serving as chairman and Dott CEO Henri Moissinac as CEO.

"By bringing Tier and Dott together, we are well positioned to capture the next phase of growth and further accelerate our path to profitability," Moissinac said in a statement.

The deal is backed by a mix of existing shareholders, led by Abu Dhabi state investor Mubadala Capital and Belgian investment company Sofina.

The two largest global e-scooter rental firms are Lime and Bird, both U.S. based. Bird announced last month that it would restructure its business to focus on profitability as part of Chapter 11 bankruptcy proceedings.

(Reporting by Nick Carey; Editing by Alexander Smith)