Cake e-bike and eMotorbike label files for bankruptcy

The post Cake e-bike and eMotorbike label files for bankruptcy appeared first on Cycling Electric.

Reports in Swedish media revealed this week that the Cake e-bike and electric motorbike label has filed for bankruptcy.

There’s fair odds that, if you’re looking solely at electric bikes, you may not have heard of the label, which only had one EU-legal electric bike, found under the Aik banner. There was too a speed pedelec offering, though as revealed in a Cycling Electric investigation this week, those are incredibly hard to insure here in the UK for lack of understanding of the product category by insurers, or indeed willing to get involved.

However, in the electric motorcycle sphere the brand was a significant player and had on numerous occasions raised substantial amounts of investor cash to drive the business’s growth. It is reported that a failed series C round of investment would have had the goal of higher production and subsequent profitability, but in this economic climate finding extra cash is difficult for any business.

It was at one time valued at €1 billion, but now upon a failed investment round seeking a SEK 80 million prop up of the business local reports say that the business has quietly filed the bankruptcy documents. Furthermore, the Swedish site Di.SE says that staff have not been paid.

“It is not one but several circumstances that have caused us to end up in this situation. Climate issues are no longer in focus, we are in a recession. It’s about us, but it’s also about the venture capital ecosystem. At the moment it is completely dead, there are no takers in the later phase Cake is in,” CEO Stefan Ytterborn is said to have told local sources.

To give some idea of the brand’s past, it raised $14 million in September of 2019, then again added $60 million two years later in Series B funding.

In its latest attempt to raise cash to support the expansion of the business, reports indicate that with six differing classes of shares in the company already, newer investors into the business were receiving a worse deal on dividends, thus taking the shine off the investment case versus previous rounds.

Cake is not alone in facing financial difficulty and the brand will have been affected by an economic downturn just as much as any other in the e-bike industry. Consumer spending is significantly off the boil as it stands. If you’d like to understand more about the bike and e-bike industry’s current predicaments, why not tune in to Cyclist.co.uk’s recent podcast on the subject.

The post Cake e-bike and eMotorbike label files for bankruptcy appeared first on Cycling Electric.