Electric Motorcycle Maker Cake Files for Bankruptcy in Sweden

It's unfortunate to hear that Cake, the Swedish electric motorcycle company, has filed for bankruptcy. Established in 2017, Cake was known for designing and manufacturing high-performance electric on and off-road motorcycles. The company had a range of products, including five adult motorcycles and one children's bicycle, catering to various users and applications, such as last-mile delivery and short-haul urban transportation. Despite having sold around 6000 bikes, the company faced challenges leading to this decision.

Cake's efforts to expand were evident with the opening of a 2800-square-meter factory in Sweden in 2020 and plans for an additional factory in the US. Despite these expansions, the company faced financial challenges. Cake had previously communicated the financial threshold, stating, “We know that we will not be cash flow positive until we sell 7,500 to 10,000 vehicles annually.”

The company also had a global presence with storefronts in major cities, including Stockholm, Los Angeles, New York, Paris, Seoul, and Tokyo. Furthermore, it had expanded its reach by licensing a store in Czechia in January of the current year. Despite these efforts, the financial dynamics seemed to pose significant challenges for the company.

Various media sources, including Dagens Industri, are reporting that Cake is facing significant challenges, primarily due to its failure to secure the latest round of venture funding. This situation has led the company into financial distress, and as a result, the 140 employees have not received payment for the last pay period.

Stefan Ytterborn, the Founder and CEO of Cake, acknowledged the difficult circumstances, stating, "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." This sheds light on the broader challenges the company is facing within the economic and investment landscape.

It's unfortunate to hear about Cake's challenging situation. The statement, "At the moment, it is completely dead; there are no takers in the later phase Cake is in," indicates the severity of the current circumstances.

Despite having raised $74.4 million in funding, the company has faced difficulties, particularly in a tough year for scale-ups in the mobility sector. The challenges of 2020, including COVID-related shutdowns and material shortages, have had lasting impacts. Other companies in the mobility space have also faced financial struggles, and it's indicative of the broader economic and operational challenges faced by businesses in the current environment.

The challenges faced by Cake and other mobility startups in the current financial climate are indeed disappointing, especially considering the crucial role these businesses play in promoting sustainability and reducing car ownership. The impact on such mission-critical ventures raises concerns about the broader support for initiatives that contribute to sustainable and environmentally friendly transportation.

The hope remains that Cake, and others facing similar challenges, may find a path forward through fresh funding or potential acquisitions. The resilience and adaptability of these businesses will play a pivotal role in shaping the future of sustainable mobility solutions.