Swedish electric motorcycle maker Cake has filed for bankruptcy after it failed to secure its latest round of venture funding.
Having raised $74.4 million in funding in the past, it perhaps comes as a surprise that the company was unable to secure a further $7.6 million (SEK 80 million) in its Series C funding.
“The CEO and investment team thought they had it over the line but the rug was pulled at the last minute,” a source told Zag Daily.
“It’s a real shame.”
Cake anticipated that its largest shareholder, the Swedish pension company AMF, would see another major investor join forces with it but this failed to manifest.
Founded in 2016, the company secured a global presence with stores in Los Angeles, New York, Paris, Seoul, Tokyo and Stockholm.
Nevertheless, even the billion-valued company was not immune to the economic climate that CEO Stefan Ytterborn said led to its downturn, and it officially filed for bankruptcy yesterday afternoon.
“It is not one but several circumstances that make us 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 risk capital ecosystem,” Stefan told Stockholm-based Dagens Industri.
“At the moment it’s completely dead, there are no takers in the later phase Cake is in.”
It is thought that Cake’s six different classes of shares narrowed the company’s appeal to new investors. The differing share classes entitle some owners to dividends before others which meant uneven impacts on owners.
Stefan also acknowledged that the company would not be cash-flow positive until it saw an annual figure of 7,500-10,000 sales. It has so far sold approximately 6,000, and released five adult motorcycles and one child’s bicycle.
140 employees at Cake are also yet to receive payment.
While Cake 0 Emission AB has filed for bankruptcy, Cake 0 Emission Limited in the UK is still active but is expected to shut in the very near future.
