Electrical motorbike firm Cake held talks with Harley-Davidson and different automakers in 2023 because it fought to remain alive, founder and CEO Stefan Ytterborn informed TechCrunch in an interview Tuesday.
The talks, which haven’t been beforehand reported, in the end didn’t pan out for the Swedish startup, which slid out of business final week. Nonetheless, Ytterborn mentioned he hopes to discover a solution to make it by way of the chapter course of and emerge with a associate on the opposite facet.
“I’ve had 40 conferences up to now three days,” Ytterborn mentioned, including that the majority have been with two-wheeler manufacturers. They’re “concerned about discovering out if there’s an opportunity for us to do one thing” collectively, he mentioned.
Cake raised $14 million in its Sequence A spherical in 2019, composed of principally enterprise funding, with the aim of constructing high-design electrical bikes and mopeds at scale. It adopted that with a $60 million Sequence B spherical in 2021 led by Swedish pension fund AMF, giving the startup some institutional backing. Ytterborn mentioned his firm started making an attempt to boost a Sequence C as early as August 2022 and that he anticipated to have the ability to shut with an analogous mixture of establishments and some VCs.
However by the top of that 12 months, VCs have been pulling again in an enormous method, and shutting a Sequence C all of a sudden appeared rather a lot more durable. “We had numerous curiosity, however nobody stepped ahead,” Ytterborn mentioned. “The entire area simply collapsed.”
Cake shifted its focus away from European buyers and towards these based mostly in North America in late 2022 and early 2023, in response to Ytterborn. Any headway the corporate made led to spring 2023 with the Silicon Valley Financial institution disaster, which spooked anybody who confirmed curiosity, he mentioned.
Cake employed Deutsche Financial institution and funding financial institution Numis (which Deutsche Financial institution later acquired) and began pitching automakers, together with Harley-Davidson. Ytterborn mentioned he discovered most of them to be “tremendous receptive,” and whereas he wouldn’t go into element about who else Cake pitched, he mentioned the corporate was a spread of choices, together with investments and strategic partnerships.
Teaming up with a carmaker might need made probably the most sense, particularly given the growing restrictions in metropolis facilities throughout Europe, Ytterborn recalled. “They’re effectively conscious that in the event that they don’t develop their portfolio, [and bring] in one thing that may be really bodily current throughout the city panorama, they’re going to overlook out on that last-mile actuality,” he mentioned.
Cake wasn’t capable of convey a deal to fruition and as an alternative needed to deal with “extending runway,” Ytterborn mentioned, which included being “spoon fed” by the lead investor of the Sequence B spherical, the Swedish pension fund. That runway ran out final week, when Ytterborn mentioned Cake got here to the “horrifying actuality” of getting to file for chapter.
The chapter course of in Sweden is just like the way it works in the USA; a trustee has been appointed to guarantee that Cake’s collectors are made as entire as attainable.
However, Ytterborn mentioned, “there’s no motive to try to destroy” the enterprise. “Our intention from a administration perspective is to discover a associate who’s keen to spend money on [the] firm and administration, for us to restructure and proceed the journey going ahead.”
With rates of interest nonetheless excessive, and micromobility corporations going out of enterprise seemingly each month, that might be a tall activity. However whereas it might have been simpler to boost cash initially of Cake’s life, Ytterborn didn’t sound significantly keen on that surroundings in hindsight.
“I believe that 10 years from now, we’ll be trying again on the years between 2017 and 2022 with a little bit of amusing, how horrendous it turned out,” he mentioned. “Proper now, I believe that we’re combating our asses off looking for a method ahead.”
