B2B-News | Multiple Swedish news sources, including Dagens Industri, Breakout, and Aftonbladet, have reported that Cake, a well-known electric motorcycle brand in Sweden, has filed for bankruptcy. It appears that the company’s recent efforts to secure new funding have been unsuccessful, according to DI.
“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. 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”, says the company’s CEO Stefan Ytterborn to DI.
For the past few months, Cake has been facing difficulties in securing additional funds. Founder and CEO Stefan Ytterborn referred to it as a “bridging round,” meant to provide enough financing to tide them over until they can conduct a larger funding round later this year.
“Unreal. Sad. Painful,” reads Stefan Ytterborn’s first comment via SMS to Breakit.
During an interview with Dagens industri, which initially broke the news of the bankruptcy filing, Stefan Ytterborn references the current brutal conditions in the capital market as the reason for the tough decision.
In the past, the company had a valuation in the billions and as of 2021, it has expanded to open stores in eight major cities across seven different markets. Stefan Ytterborn states that he is fully committed to finding a way to save Cake, saying “I am solely focused on finding a solution for the company, no matter what format it may take. This remains true even in the case of potential bankruptcy.”
In addition, he brings attention to another frustrating factor: the company has a total of six different types of shares, with varying levels of rights for different owners. This is an issue that was recently covered by Breakit and makes it challenging for potential buyers to enter companies facing financial difficulties.
“Then our anchor investors – without pointing to any individual – would make sure to assist with the rest. As recently as yesterday, I thought we were at the finish line. But at the last moment, specific committed actors have chosen to drop out,” says Stefan Ytterborn to Di.
Cake has around 140 employees and, in addition to Stockholm, has a presence in Los Angeles, New York, Paris and Milan. The company, which was founded in 2015, has sold approximately 6,000 vehicles until the bankruptcy.