Cake sought offers with Harley-Davidson, automakers earlier than chapter

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 advised TechCrunch in an interview Tuesday.

The talks, which haven’t been beforehand reported, finally didn’t pan out for the Swedish startup, which slid out of business last week. Nonetheless, Ytterborn mentioned he hopes to discover a solution to make it by way of the chapter course of and emerge with a accomplice on the opposite aspect.

“I’ve had 40 meetings in the past three days,” Ytterborn mentioned, including that the majority have been with two-wheeler manufacturers. They’re “interested in finding out if there’s a chance for us to do something” collectively, he mentioned.

Cake raised $14 million in its Collection A spherical in 2019, composed of largely enterprise funding, with the purpose of constructing high-design electrical bikes and mopeds at scale. It adopted that with a $60 million Series B round in 2021 led by Swedish pension fund AMF, giving the startup some institutional backing. Ytterborn mentioned his firm started attempting to lift a Collection 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 tip of that 12 months, VCs were pulling back in a big way, and shutting a Collection C immediately appeared quite a bit tougher. “We had lots of interest, but no one stepped forward,” Ytterborn mentioned. “The whole space just collapsed.”

Cake shifted its focus away from European traders and towards these based mostly in North America in late 2022 and early 2023, in line with 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 “super receptive,” and whereas he wouldn’t go into element about who else Cake pitched, he mentioned the corporate was taking a look at 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 well aware that if they don’t expand their portfolio, [and bring] in something that would be actually physically present within the urban landscape, they’re going to miss out on that last-mile reality,” he mentioned.

Cake wasn’t in a position to carry a deal to fruition and as an alternative needed to give attention to “extending runway,” Ytterborn mentioned, which included being “spoon fed” by the lead investor of the Collection B spherical, the Swedish pension fund. That runway ran out final week, when Ytterborn mentioned Cake got here to the “horrifying reality” of getting to file for chapter.

The chapter course of in Sweden is much like the way it works in america; a trustee has been appointed to make it possible for Cake’s collectors are made as entire as doable.

However, Ytterborn mentioned, “there’s no reason to try and destroy” the enterprise. “Our intention from a management perspective is to find a partner who’s willing to invest in [the] company and management, for us to restructure and continue the journey going forward.”

With rates of interest nonetheless excessive, and micromobility firms going out of enterprise seemingly each month, that may very well be a tall job. However whereas it could have been simpler to lift cash in the beginning of Cake’s life, Ytterborn didn’t sound notably keen on that setting in hindsight.

“I think that 10 years from now, we’ll be looking back at the years between 2017 and 2022 with a bit of a laugh, looking at how horrendous it turned out,” he mentioned. “Right now, I think that we’re fighting our asses off trying to find a way forward.”