What Happened to VanMoof? From Bankruptcy to Being Bought

It was announced that Lavoie, the electric scooter unit of Formula One engineering and technology firm McLaren Applied, has bought bankrupt e-bike company VanMoof.

Despite gathering over $180 million in venture capital investments since 2020, VanMoof went bankrupt earlier in 2023 following reports of financial problems.

Administrators where appointed by courts on 12 July 2023 in an attempt to lead the company out of financial trouble, but just six days later, on 18 July 2023, the company was declared bankrupt in the Netherlands.

It was confirmed in August 2023 that Lavoie has come to VanMoof’s rescue and plans to stabilize and expand the business.

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McLaren Applied Chairman Nick Fry told Reuters that they see the investment as a huge opportunity. Fry admitted that the acquisition doesn’t come without its challenges as Lavoie plans to invest “tens of millions” of pounds to save VanMoof.

The court-appointed trustees for VanMoof overseeing the bankruptcy process confirmed the sale. “Shortly after 4 September, more will be announced regarding the continuation of services provided to VanMoof riders”, trustees Jan Padberg & Robin de Wit said in a statement.

What Happened to VanMoof?

The Dutch electric bike manufacturer has been making waves in the bicycle industry with its sleek designs and innovative features. However, recent reports have raised concerns about the company’s financial situation, leading many to wonder if VanMoof is on the brink of bankruptcy. They’d be correct, on the 17th of July 2023 VanMoof declared bankruptcy. 

What Happened to VanMoof: A Timeline

• 2009: VanMoof is founded by Taco and Ties Carlier in Amsterdam, Netherlands. The brothers aimed to create electric bikes that would revolutionize urban commuting.
• 2010: VanMoof raises £2 million in its first funding round, attracting investors who see the potential in the emerging electric bike market.
• 2011: The company introduces its first series of electric bikes, the VanMoof Electrified S and X, which received positive reviews for their sleek design and innovative features.
• 2012: VanMoof expands its operations internationally, opening its first store outside of the Netherlands in Tokyo, Japan.
• 2015: VanMoof raises an additional £4 million in a funding round led by European venture capital firm Slingshot, allowing for further expansion and development.
• 2017: The company launches the VanMoof Electrified S2 and X2 models, which gained widespread attention and positive feedback from the cycling community.
• 2018: VanMoof announces significant losses, revealing that it spent more on research and development, production, and marketing than it generated in revenue.
• 2019: Despite the financial setbacks, VanMoof secures £34 million in a Series B funding round, led by venture capital firms Norwest Venture Partners and Balderton Capital.
• 2020: The company experiences a surge in demand for its electric bikes, driven by the global COVID-19 pandemic and increased interest in alternative transportation options.
• 2021: VanMoof partners with various retailers, including Best Buy in the United States and Halfords in the United Kingdom, to expand its distribution channels and reach a wider customer base.
• 2022: VanMoof raises an additional £62 million in a Series C funding round, led by London-based investor firm Hillhouse Investment.
• 2023: The company continues to face fierce competition in the e-bike market, with new entrants and established players vying for market share. VanMoof announces cost-cutting measures and restructures its operations to improve financial performance.
• 17 July 2023: The court of Amsterdam withdrew the suspension of payment processing, a move used to try and rescue what remains of the company, and officially declares bankruptcy. They’ll now explore options to try and save the company – VanMoof entities outside of the Netherlands aren’t in insolvency proceedings. 
• August 2023: Lavoie, the electric scooter unit of Formula One engineering and technology firm McLaren Applied, confirms that it has bought VanMoof.
• November 2023: Lavoie announces its working on bringing the VanMoof brand back to life soon.

It’s important to note that this timeline provides a general overview of key events in VanMoof’s history and financial situation. The specific dates and funding amounts mentioned may vary.

Who is Lavoie – The Company Which Bought VanMoof?

Lavoie was founded by British technology and products company McLaren Applied which previously formed a part of the McLaren Group that builds parts for the McLaren F1 and other vehicles.

McLaren Applied is now owned by Greybull Capital, an entrepreneurial investment group. Greybull makes long-term investments in private companies and has a broad portfolio across multiple sectors including technology, engineering, and manufacturing.

Lavoie describes itself as being “born of British motorsport, driven by a desire to redefine urban mobility with high-end solutions that help us live better”.

The company’s first premium electric scooter, named Series 1, reimagines form factor with unique folding technology trademarked as Flowfold.

VanMoof Financial Problems Explained

VanMoof’s financial problems can be attributed to various factors. One significant factor is the high upfront costs associated with research and development, production, and marketing. 

Electric bike technology is constantly evolving, requiring substantial investments to stay at the forefront of innovation. Additionally, expanding the company’s global footprint and establishing physical retail stores in major cities has contributed to increased operating expenses.

VanMoof’s goal was to annihilate the competition by being everywhere all at once – and by selling some of their bikes at a loss with an aggressive pricing strategy. Customers paid €2000 for the S3, but it cost VanMoof €4000 to produce. 

VanMoof’s S3 model also became infamous for its high failure rate, reportedly around 10%, which is ten times the average failure rate for e-bikes. These issues ranged from defective e-shifters to faulty mainboards and batteries, necessitating frequent repairs and maintenance.

Despite these issues, VanMoof’s plan was to resolve this as they scale and develop their products. But this didn’t exactly pan out…parts were difficult to source, could only be installed by technicians – not repaired, and costs in various aspects increased following the pandemic. 

Furthermore, the competitive nature of the e-bike market has forced VanMoof to invest heavily in marketing and advertising to differentiate itself from rivals. These expenses, combined with the need for aggressive pricing strategies, placed additional strain on the company’s finances.

How Much Did VanMoof Raise?

VanMoof successfully raised significant amounts of funding to support its growth and development. While the exact figures may vary, the company secured millions of pounds in investment through multiple funding rounds. 

These investments have come from a combination of venture capital firms, private investors, and crowdfunding campaigns. The financial backing demonstrates the confidence that investors have – or had, in VanMoof’s business model and its potential to succeed in the e-bike industry.

VanMoof Total Investment

• 2010: VanMoof raises £2 million in its first funding round, attracting early investors who recognize the potential of the electric bike market.
• 2015: The company secures an additional £4 million in a funding round led by European venture capital firm Slingshot. This investment enables VanMoof to further expand its operations and continue product development.
• 2019: VanMoof raises a significant £34 million in a Series B funding round. The round is led by venture capital firms Norwest Venture Partners and Balderton Capital.
• 2022: In a Series C funding round, VanMoof secures an impressive £62 million. This round is led by London-based investor firm Hillhouse Investment.

Why Does VanMoof Lose So Much Money?

The e-bike industry is highly competitive, with numerous players vying for market share. In order to establish a strong presence and attract customers, VanMoof has engaged in aggressive pricing strategies, offering its high-quality electric bikes at relatively affordable prices. 

This approach, combined with the aforementioned high costs associated with research and development and marketing, has resulted in significant financial losses for the company.

Furthermore, the global supply chain disruptions caused by the COVID-19 pandemic have impacted VanMoof’s operations. The scarcity of critical components and increased logistics costs have added further strain to the company’s financial performance.

The high failure rate of some models and the warranty attached led to a massive backlog at VanMoof service centers. Parts couldn’t be sourced, repairs were impossible for the technicians since they had to replace – not fix, and customers started to publicly complain and return their bikes for a refund.

The snowball effect of each individual issue VanMoof faced all came to a head on the bottom line – their cash reserves.   

Do VanMoof Bikes Still Work?

VanMoof bikes still work as normal and the company is still offering their bike servicing.

However, Cowboy, a Belgian e-bike competitor of VanMoof, has created an app called “Bikey” to help VanMoof owners generate their unique digital key and keep riding – in case the servers of VanMoof are to go down.

The app is now live on the Apple app store and will be available for Android soon. Cowboy’s software team worked through the night to create the app, which is still in beta and may have bugs.

VanMoof riders should grab their key immediately, as it will be impossible to retrieve this key if the servers go down, and riders would more or less lose total access to their bikes.

Cowboy says that this is about keeping bikes on the road, which is their No.1 mission as a company, regardless if it’s a competitor or not.

Clever Cowboys.

VanMoof Alternatives

For those interested in electric bikes but considering alternatives to VanMoof, two prominent options are Cowboy and TENWAYS.

Cowboy is a European e-bike brand that shares some similarities with VanMoof. The company focuses on creating sleek, city-oriented electric bikes with integrated technology features. Cowboy bikes are known for their minimalist design, user-friendly features, and dedicated app that enhances the riding experience.

TENWAYS is another notable alternative, offering a range of electric bikes suitable for various purposes. The brand emphasizes high-quality craftsmanship, durability, and performance. TENWAYS bikes come equipped with advanced features, such as long-lasting batteries, powerful motors, and customizable settings, catering to the needs of electric bike enthusiasts.

While VanMoof remains a reputable and innovative player in the e-bike market, exploring alternatives like Cowboy and TENWAYS can provide consumers with additional options to consider based on their specific preferences and requirements.

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