Electric motorcycle startup CAKE files for bankruptcy

Stockholm-based electric motorcycle startup CAKE recently declared bankruptcy following a series of financial setbacks, with the latest news confirming that the company was unable to secure the necessary funds to continue operations.

CAKE founder and CEO Stefan Ytterborn disclosed that the company had to take this step on February 1 following the withdrawal of a major investor just before a crucial funding round.

“It is not one but several circumstances that have caused us to end up in this situation. Climate issues are no longer in focus, we are in a recession,” he said. “It’s about us, but it’s also about the venture capital ecosystem. At the moment it is completely dead, there are no takers in the later phase Cake is in.”

Ytterborn further pointed to a combination of factors, including internal challenges and the broader economic climate, that contributed to the company’s financial woes.

Initial success

With its striking designs and commitment to sustainability, CAKE previously gained attention in the electric motorcycle market. The company raised a $14 million (approximately €13 million) Series A in 2019, followed by a $60 million (€55.8 million) Series B round in 2021 meant to fund manufacturing facilities in Europe, North America and Asia.

Up until last week, the company was still making press announcements including about further European expansions. It had also just begun delivering its newest electric motorcycle model, the CAKE Bukk.

The company’s financial troubles began to surface when reports emerged of suspended salary payments and failed negotiations for a C round of funding.

Last November, CAKE issued a recall for one of its mopeds due to concerns about the steering column potentially breaking. Shortly after, it recalled its flagship Kalk e-motorcycle following an incident where a unit caught fire at a South Korean dealership.

CAKE’s bankruptcy adds to the list of downturns within the electric motorcycle industry, on top of scooter startup Superpedestrian’s closure and Bird’s bankruptcy. Micromobility.com, formerly known as Helbiz, has also delisted from the Nasdaq stock exchange, while e-scooter rental Tier and Dott opted to merge to chart a more favorable trajectory.

Similar to CAKE, Vanmoof, a Netherlands-based high-end e-bike manufacturer, also sought bankruptcy protection last year. However, it managed to secure a buyer in electric scooter company Lavoie, leading to the revival of the brand.

Other companies, including premium electronic transportation companies SONDORS and Arcimoto, have encountered their share of setbacks as well.