Cake, the Swedish electric motorcycle startup renowned for its high-design bikes, filed for bankruptcy on February 1, as confirmed by CEO Stefan Ytterborn. The company was in the midst of a funding round, with an investor withdrawal reportedly pushing it over the financial edge. While it remains unclear whether Cake filed for bankruptcy protection or insolvency, Ytterborn expressed determination to find a solution. Cake, which had raised $14 million in a 2019 Series A and $60 million in a 2021 Series B led by Swedish pension fund AMF, intended to use the capital for manufacturing facilities across Europe, North America, and Asia, as well as to enhance its retail capabilities.
However, recent setbacks have plagued Cake, including a moped recall due to a steering column risk and a subsequent recall of its flagship Kalk e-motorcycle following a fire incident in a South Korean dealership. Ytterborn acknowledged the company’s inability to meet salary payments to employees. Cake’s struggles align with broader challenges in the e-mobility sector, as seen with Superpedestrian going out of business, Bird filing for bankruptcy, and Micromobility.com being delisted from the Nasdaq stock exchange. Notably, Vanmoof, a high-end e-bike maker, faced a similar predicament but successfully found a buyer in electric scooter company Lavoie, leading to a resurgence of the brand. The future for Cake remains uncertain as it navigates the complexities of its financial troubles.
While the details of Cakes bankruptcy are unknown, along with the troubles of other small e-mobility companies, it doesn’t paint a positive picture for the market. Cake filing for bankruptcy could lead to increased caution from investors, and the recalls due to fire risks may lead to less demand as consumers begin to lose trust in the industry. However, this may also be the result of the market maturing and moving away from small start ups as larger companies take over and buy up smaller companies or the smaller companies merge together (such as Tier and Dott).
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