Dutch e-bike start-up VanMoof declares bankruptcy

October 2023 | DEALFRONT | BANKRUPTCY & CORPORATE RESTRUCTURING

Financier Worldwide Magazine

October 2023 Issue

Marking the end of rumours as to its financial stability, Dutch e-bike start-up VanMoof has declared bankruptcy and as a result is seeking legal protection using a Dutch mechanism similar to America’s Chapter 11 process.

Approved by the district court of Amsterdam, the mechanism allows VanMoof to enter into administration to allow it time to reorganise and seek a solution, likely in the form of additional outside investment. It also allowed the company to pause payment of its bills.

Rumours of VanMoof’s financial difficulties first emerged in June 2023 when the company stopped accepting new orders, which it blamed on logistical issues and an influx of orders on both the SX4 and SA5 e-bikes – two newer models launched this year that proved to be particularly popular product lines.

A foreshadow of these financial issues came when VanMoof filed paperwork, as revealed by the Dutch media in January 2023, which revealed it had been in talks over €40m to help it remain liquid.

Then, in July, the court of Amsterdam withdrew the suspension of payment proceeding of VanMoof’s Dutch legal entities – VanMoof Global Holding B.V., VanMoof B.V. and VanMoof Global Support B.V. – and declared these entities bankrupt. Two administrators were then appointed as trustees to assess the situation at VanMoof and investigate the potential for a restart out of bankruptcy by means of an asset sale to a third party.

“The court has also ordered a cooling down period of two months,” said a spokesperson for VanMoof. “Together with the administrators, we are currently assessing the situation in order to find a solution so that VanMoof can continue its activities.”

VanMoof, which employs around 700 people, has also taken the decision to temporarily close its physical stores on the grounds of staff safety. This follows reports of customer unrest, with some said to be seeking refunds for advanced payments on new bikes or to collect their bikes from the company’s workshop. VanMoof’s stores in San Francisco, Seattle, New York City and Tokyo remain open, however.

Founded in 2009 by brothers Taco and Ties Carlier, VanMoof started with a line of traditional bikes before moving to the production of e-bikes in 2016. Extremely popular in the Netherlands where bicycles are an everyday form of transport for the majority of the urban population, e-bikes also have a large fan base in cities around the world.

VanMoof’s e-bikes became a must-have, with the company proving to be a perfect brand builder due to its marketing, allowing it to reach a different kind of audience than the bicycle industry was used to.

To date, VanMoof has raised more than $200m in funding thanks to investment from Hillhouse Capital, Norwest Venture Partners, Felix Capital, Balderton Capital and TriplePoint Capital. The bulk of the funds – approximately $128m – was delivered in September 2021 and was allocated to increasing production capabilities, continuing the development of new technologies, improving bike specifications and reliability, as well as aiming to break down barriers to cycling.

The VanMoof statement concluded: “We work hard to continue our services and will separately contact all customers as soon as possible regarding pending deliveries or repairs.”

Fraser Tennant