E-bike manufacturer Van Moof files for bankruptcy in the Netherlands

E-bike manufacturer Van Moof files for bankruptcy in the Netherlands
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    On July 18, 2023, Bloomberg quoted an emailed statement saying that an Amsterdam court on July 17 lifted a stay of payment proceedings against Dutch legal entities Van Moof Global Holding BV, Van Moof BV and Van Moof Global Support BV and declared the entities insolvent.

    Van Moof stated that the trustee is continuing to assess VanMoof’s situation and is investigating the possibility of reopening VanMoof’s emergence from insolvency through the sale of assets to third parties.

    VanMoof’s legal entities outside the Netherlands are not currently in insolvency proceedings, but their future remains uncertain.

    Four days before the bankruptcy was declared, local Dutch media reported that VanMoof had been granted court protection from its creditors.

    The court then appointed two directors to manage the company and declared a two-month cooling-off period during which creditors could not seize assets from the company.

    Van Moof was founded in 2009. It has been one of the most popular e-bike brands in the Netherlands, and many media outlets, including CNN, called Van Moof the Tesla of the cycling world and the world’s most beautiful and best electric bike when it was founded.

    Van Moof's website pop-up window

    But on July 18, it was suddenly announced that sales of new e-bikes would be temporarily halted, and since June 29, visitors to Van Moof’s website would see a pop-up window stating that the company had suspended orders to meet current demand.

    Van Moof then said was a technical glitch causing the problem, posting on Twitter that the Van Moof app currently has an error that prevents reservations from being made through the app.

    And the app can still be made through the My Van Moof account, but it didn’t take long for the official statement to be made that sales were suspended.

    After several setbacks, the company eventually filed for bankruptcy in the Netherlands.

    Multiple reasons for such a result

    The Tesla of e-bikes

    VanMoof was founded in 2009 in the Netherlands. The founders were Taco Carlier and Ties Carlier.

    Taco is an industrial designer and Ties is an automation technology engineer.

    The duo has their own roles, so VanMoof was born in Amsterdam, the capital of the Netherlands.

    VanMoof was originally designed not as an e-bike, but as a pure bike.

    In 2014, VanMoof began to officially design e-bikes, and unlike common e-bikes, VanMoof focuses on simplicity and technology.

    They were the first to hide the battery in the frame of the vehicle, so that at first glance people can’t tell it’s an e-bike, and they hope to follow Tesla’s footsteps, starting from the design of the bike, to the production and sales and after-sales service, all done by themselves.

    Van Moof-1

    Since VanMoof is the “Tesla of e-bikes,” the price is naturally close to Tesla.

    By checking VanMoof’s official website, we can see that there are six models listed, namely S3, X3, S4, X4, S5 and A5, and the price of the S5 and A5 series is as high as €3,498.

    The cheapest 3 series, the S3 and X3, shows that it has been permanently sold out, although cheap, but the price is still as high as €2000.

    Is it worth spending so much money on an e-bike?

    Jonathan Hum, VanMoof’s CMO, said: “VanMoof’s design philosophy has always been based on one indisputable fact: the joy of riding a bike is in its simplicity.”

    The VanMoof S3 and X3 series of e-bikes combine cutting-edge technology when 4,500 units go on sale in just 24 hours.

    The X3 and S3, for example, have an electric motor paired with an electronic shift system, and also feature hydraulic brakes, integrated lights and a number of smart features, as well as an integrated motion detector that combines an alarm, GPS chip and mobile data connectivity.

    Another great feature of VanMoof products, besides their simple design, is anti-theft.

    VanMoof’s e-bike features the Kick Lock system, which allows the rider to secure the rear wheel and activate the on-board alarm system with the tap of the toe.

    Van Moof-2

    This is equivalent to directly locking the vehicle, which allows you to see smart location tracking alerts on a mobile app and will locate the vehicle’s position via GPS.

    VanMoof has also developed its own smart bike anti-theft module with a virtually invisible, stealthy lock built into the frame that simply needs to be pulled out and used.

    The lock is associated with an app on the owner’s smartphone, which can also be used to lock the vehicle from your phone and automatically unlock it if you’re near it.

    Once tampered with or stolen, the wheels lock and activate the anti-theft device, which, combined with an integrated alarm system and deactivation mode, makes a stolen VanMoof virtually impossible to ride, much less resell.

    In addition, the VanMoof features industry-leading automatic electronic gearshift and quiet motors up to 25 km/h.

    They feature an electric motor paired with an electronic shift system that has four gears and does not need to be shifted. All you need to do is hop on the bike and pedal.

    VanMoof’s unique design and product performance have sparked a “two-wheeled revolution” in Europe and attracted capital.

    The largest funding came from Hillhouse Investment, which announced in 2021 that it had completed a Series C funding round of $128 million for VanMoof, which is by far the largest single funding round in the history of the e-bike industry, and Hillhouse Investment also made VanMoof a major player in the e-bike industry.

    Van Moof-3

    The investment by Hillhouse investment also makes VanMoof the most funded e-bike company in the world.

    Also participating in the investment were Gillian Tans, former CEO of Booking.com, US investment fund Norwest Venture Partners, UK venture capitalist Felix Capital, venture capital firms Balderton Capital and Triple Point Capital, etc.

    According to Crunchbase, VanMoof has raised five rounds of funding since 2017, totaling $189 million.

    But the highlights always come and go quickly.

    According to media reports, since 2023, due to the extremely unstable parts supply chain and quality problems, VanMoof, like many new energy vehicles, has fallen into the vicious circle of “the more you sell, the worse the loss”, more and more users complain that their bikes in the shop repair time than on the road are more.

    The two-wheeled e-mobility market is going through a period of rapid development, especially in the wake of the epidemic, and the rate of bicycle sales has begun to rise massively.

    In Germany alone, 200,000 expensive bikes were sold in 2010, but nearly 2 million were sold in 2022, according to ZIV, the German two-wheeled vehicle industry association.

    There is no denying that the market is competitive at the same time.

    Van Moof-4

    On the one hand, there are classic bike manufacturers who offer both conventional bikes and e-bikes, while on the other hand there are more specialized manufacturers like VanMoof who specialize in e-bikes.

    To differentiate, some e-bike manufacturers even bring ChatGPT to new devices.

    Urtopia, for example, has introduced a new e-bike with built-in GPS, an anti-theft locking system and built-in ride safety.

    And it also equipped the bike with a digital voice interface that makes it easy for riders to use ChatGPT.

    The industry has been competitive enough that manufacturers have to make some changes to differentiate themselves in the long run or else it could be eliminated no matter how much it stands out.

    High maintenance costs

    Van Moof experienced rapid growth during the epidemic, with turnover rising from €10 million in 2017 to almost €83 million in 2021, but the rapid growth in turnover was accompanied by huge losses.

    In order to quickly open up the market, VanMoof promises to provide free maintenance for up to three years for even its cheapest products, resulting in VanMoof’s after-sales cost being higher than the selling price.

    Local Dutch media outlet Het Financieele Dagblad (FD) reported that VanMoof’s maintenance and after-sales costs will have reached a staggering €8 million by the end of 2021, and VanMoof will lose €11.9 million in 2021 alone, up from €6.7 million a year earlier.

    VanMoof’s e-bikes are made up of its own proprietary components, but huge amounts of money are needed behind the scenes to support its own components.

    Van Moof-5

    According to the data, VanMoof has huge maintenance expenses every year, and in 2021, Van Moof’s net profit was minus €77.8 million, with a turnover of €65.6 million, and last year, it is expected that the loss will reach the same level.

    In January, VanMoof was rumored to be facing financial difficulties. An FD article warned investors that it was losing money on every bike it sold.

    “Without another capital injection, VanMoof as a company will be in danger within two months.”

    In the FD report, a VanMoof investor revealed even more pessimistic news: “At the beginning of 2023, VanMoof had two months of cash flow left, but in less than a month, it seems to have enough for only 15 days.”

    The US media The Verge reported that due to the huge cost of e-bike production, sales and maintenance, Van Moof has been losing about €78 million every year for the past 2 years, and its operation is on the verge of bankruptcy due to the malfunctioning of fund scheduling.

    In January of this year, Van Moof was still appealing to investors to inject capital to help the company tide over difficult times, but it was clear that this capital did not fundamentally solve the problem.

    Van Moof-6

    And two months ago, Van Moof had directly petitioned the Amsterdam District Court to suspend the company’s payment, which was approved.

    The crisis had already begun. Van Moof mentioned in its 2021 annual report that maintenance costs were higher than expected, and some industry insiders pointed out that Van Moof’s 2021 annual report already showed that the company’s funds were almost exhausted at that time, but that year’s financing raised about €108.5 million, which was called the largest Series C investment in the history of Europe’s e-bike brands at that time.

    And this perhaps slowed down the company’s funding crisis. The company’s funding crisis may have been delayed.

    Implications for many companies

    Van Moof’s financial difficulties have affected T-CONN Precision, a subsidiary of connector manufacturer Sinbon, which was the first to hold a press conference on Thursday night (13th), stating that Van Moof had delayed payment of $814 million in goods, and recorded an impairment loss of $74.95 million.

    T-CONN Precision was the first to hold a press conference on Thursday.

    T-CONN Precision’s liability to Sinbon was NT$356 million, and if the entire amount were recorded as impairment loss, the company’s net worth would be significantly reduced, although it would not significantly affect operations.

    Then the same industry Speed Tech spread the news on the next evening announcement, including Speed Tech and subsidiaries’ total accounts receivable amounted to $5.038 million, initially estimated to account for 0.8% of total consolidated assets.

    Van Moof-7

    According to Speed Tech, Van Moof is currently under bankruptcy protection due to restructuring and a sale opportunity.

    And the payment of $156 million will be recognized as a loss after it is confirmed that it cannot be repaid, so it will not recognize losses in the second quarter report for the time being.

    Idealbike also issued a press release on the same day confirming that it has been victimized, estimating that it may lose $1.52 million, accounting for 0.77% of its assets, and it will appoint a Dutch lawyer to defend the company’s debts in accordance with the law.

    Chocolatezhu
    Chocolatezhu
    Hi, I'm an experienced writer about mechanic and an expert on bike and e-bike tech who appreciates practical, beautifully-engineered things. And of course, I love cycling.
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