Marti Technologies, Inc. — FY2023 Form 20-F
Reporting period: Fiscal year ended December 31, 2023; the filing was signed April 16, 2024. This is an annual report, not a standalone Q4 report, and it does not provide a clear set of Q4-only financial results. Figures below are U.S. dollars and U.S. GAAP unless noted.
Business context and reporting period
Marti operates micromobility rentals—e-scooters, e-bikes and e-mopeds—in Türkiye, alongside a ride-hailing service matching riders with car, motorcycle and taxi drivers. At year-end, it reported a fleet of more than 38,000 vehicles across six cities, over 77 million cumulative rides and more than 4.9 million unique riders. Ride-hailing had over 498,000 unique riders and approximately 106,000 registered drivers, but generated no revenue in 2023 because the company did not charge a fee or enable in-app payment.
Financial and operating performance
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $20.0 million | $25.0 million |
| Gross profit (loss) | $(4.1) million; margin approximately -20.2% | $(2.1) million; margin approximately -8.4% |
| Operating loss | $(30.6) million | $(14.9) million |
| Net loss | $(33.8) million; $0.67 loss per share | $(14.2) million; $0.32 loss per share |
| Adjusted EBITDA (non-GAAP) | $(17.7) million | $(3.9) million |
| Cash used in operating activities | $(14.9) million | $(5.5) million |
| Cash and cash equivalents at year-end | $19.4 million | $10.5 million |
Gross margin and Adjusted EBITDA are derived from the filing’s reported amounts; Adjusted EBITDA is a non-GAAP measure and should be considered alongside GAAP results. FY2023 investing cash outflow was $4.8 million, mainly for vehicles, while financing activities provided $28.6 million, primarily from the business combination and convertible-note proceeds.
At December 31, 2023, total assets were $40.2 million, total liabilities $72.9 million, and stockholders’ equity was negative $32.7 million. Current assets of $25.7 million exceeded current liabilities of $17.5 million, but total financial liabilities, net, were $65.3 million, including $54.8 million of convertible notes and $10.4 million of short-term financial liabilities. The PFG term loan carried a fixed 10.25% rate and was secured by substantially all assets; the filing gives differing PFG balance descriptions, including approximately $6.6 million remaining and a $7.0 million outstanding balance.
Key micromobility indicators weakened: total rides fell to 16.0 million from 28.5 million; average rides per deployed vehicle per day declined to 1.27 from 2.36. Average daily vehicles deployed rose to approximately 34,600 from 33,000, while net revenue per ride increased to $1.25 from $0.88. Gross profit per ride worsened to $(0.25) from $(0.07), despite pre-depreciation contribution per ride improving to $0.33 from $0.22.
Material changes versus the prior comparable period
- Revenue declined 19.8%, which management attributed mainly to lower rides per vehicle amid Turkish economic pressures, higher prices, shorter rides, currency translation and temporary vehicle redeployment after the February 2023 earthquakes. Price increases supported revenue per ride but average daily rides per vehicle fell from 2.36 to 1.27.
- Cost of revenue decreased 11.1%, but by less than the revenue decline; gross loss widened by about $2.0 million. Management cited lower personnel and lease costs, alongside the revenue decline.
- General and administrative expense rose 67.4% to $15.1 million, including higher public-listing consulting and legal costs and personnel expenses. Selling and marketing expense increased to $7.3 million from $1.6 million, substantially reflecting ride-hailing promotion and social media spending.
- Micromobility operations were reduced from 15 cities to six. The nine exited cities represented 7% of revenue but 14% of variable operating costs, according to management. Average daily vehicles deployed nevertheless increased, including about 4,000 new e-mopeds.
- Ride-hailing spending increased substantially without corresponding revenue. The segment reported a pretax loss of $11.7 million in 2023, versus $1.4 million in 2022.
Outlook, risks, contingencies and unusual items
- Management plans: Continue investing in ride-hailing in the first half of 2024, emphasize micromobility operating efficiency through 2024, and consider fleet expansion no earlier than summer 2025. No numerical revenue, earnings or cash-flow guidance is provided.
- Liquidity and going concern: Management stated that available resources and liquidity should cover cash needs for the 12 months following issuance, considering financing commitments and alternative scenarios. The filing also reports recurring losses, $14.9 million of 2023 operating cash use and dependence on external funding; its going-concern assessment remains a key investor consideration.
- Convertible-note exposure and dilution: Year-end convertible notes totaled approximately $54.8 million and bear 15% annual interest, split between 10% cash interest and 5% payment-in-kind interest. Their conversion price is subject to reset provisions; the filing reports a current price of $1.65 per share. Conversion could materially dilute existing shareholders. Subsequent to year-end, the company also disclosed additional note subscriptions and a $15 million commitment, subject to their terms.
- Legal and tax matters: A taxi-owner association’s unfair-competition lawsuit concerns ride-hailing and e-moped services. An injunction was lifted in June 2023; proceedings remained pending, with a hearing scheduled for July 19, 2024. The company also disclosed customs-related matters, including a potential $240,630 fine tied to an application whose approval was pending; management did not consider that fine probable and recorded an $18,154 provision for the related amendments.
- Operating and market risks: Major exposures include Turkish inflation, lira depreciation and political/economic uncertainty; seasonality and weather; changing local licensing and vehicle restrictions; supply-chain concentration; safety, insurance and product-liability claims; and the challenge of monetizing ride-hailing. Turkish CPI was reported at 64.8% for 2023, and the lira weakened substantially against the U.S. dollar.
- Controls: Management concluded disclosure controls and internal control over financial reporting were ineffective at year-end. Four material weaknesses remained unremediated: IT general controls, process and control design, insufficient experienced accounting personnel, and risk assessment. Management described remediation efforts, but did not provide assurance that they would be completed successfully or on time.
- Other notable items: In January 2024, the company redeemed remaining warrants for $0.07 each and delisted them. It also authorized a share repurchase program of up to $2.5 million, funded from convertible-note proceeds. In February 2024 it acquired Zoba’s intellectual property and software assets; the filing said the acquisition did not significantly affect net assets or cash.
Most important facts for investors to verify
- Whether ride-hailing can be monetized and whether spending produces sustainable rider and driver activity.
- Whether micromobility utilization, gross profit per ride and cash generation improve after the city exits, pricing changes and cost reductions.
- The full debt and liquidity picture, including PFG balances, convertible-note repayment or conversion terms, interest burden, funding commitments and potential dilution.
- Progress and independent evidence of remediation of the four material weaknesses in financial reporting controls.
- Developments in the taxi association lawsuit, customs matters, operating permits and any new municipal restrictions.
- The terms, actual funding source and execution of the share repurchase program, and the effect of subsequent financing on cash runway and share count.