On February 1st, Swedish electric motorcycle startup Cake filed for bankruptcy, according to a confirmation from CEO Stefan Ytterborn to TechCrunch. This news comes as the company was in the midst of a funding round, just prior to the filing.
The Withdrawal of an Investor: The Final Straw
According to Swedish media reports, the withdrawal of an investor was what ultimately led to Cake’s downfall. Despite being in the middle of a funding round, the company was unable to recover from this setback.
Ytterborn declined to comment on what would happen next, but his comments suggest that the company may have filed for bankruptcy protection rather than insolvency. In an interview with Dagens Industri, Ytterborn stated that he had nothing else "in mind but to find a solution in one format or another."
Cake’s Struggles: A Pattern of Issues
Cake has faced several challenges in recent times. In November, the company issued a recall for one of its mopeds due to a risk that the steering column could break. Just weeks later, it recalled its flagship Kalk e-motorcycle after a unit caught fire in a South Korean dealership.
In an interview with Swedish outlet Breakit, Ytterborn confirmed that the company would not be able to make salary payments to employees. This news is the latest in a string of issues facing Cake.
The Larger Context: Struggles in the E-Mobility Sector
Cake’s struggles are not unique to the company itself but rather reflective of broader challenges within the e-mobility sector. Several other companies have faced similar difficulties, including:
- Superpedestrian: went out of business
- Bird: filed for bankruptcy
- Micromobility.com (formerly Helbiz): delisted from the Nasdaq stock exchange
- Tier and Dott: merged to find a better path forward
Perhaps most relevant to Cake, however, is the case of Vanmoof. The high-end e-bike maker out of the Netherlands filed for bankruptcy protection last year but was able to find a buyer in electric scooter company Lavoiethat has since gotten the brand back up and running.
A Changing Landscape: What’s Next for E-Mobility?
The e-mobility sector is undergoing significant changes. With the rise of electric vehicles, companies are facing increased competition and pressure to innovate. Cake’s bankruptcy filing serves as a reminder that even successful startups can struggle in this rapidly evolving landscape.
As the industry continues to shift, it will be interesting to see how other companies adapt and respond to these challenges. Will we see more mergers and acquisitions like Vanmoof? Or will new players emerge to shake up the market?
One thing is certain: the e-mobility sector will continue to evolve, and only time will tell what the future holds for Cake and its competitors.
About the Author
Sean O’Kane is a reporter who has spent a decade covering the rapidly evolving business and technology of the transportation industry. He previously worked at Bloomberg News where he helped break stories about some of the most notorious EV SPAC flops.
