Another grim stage for VanMoof, the e-bike startup backed by venture capitalists to the tune of hundreds of millions of dollars. After making a last-hour effort to stave off bankruptcy last week, the court of Amsterdam has taken the step of officially declaring bankruptcy for the company’s Dutch legal entities, VanMoof Global Holding B.V., VanMoof B.V. and VanMoof Global Support B.V.. The court has now appointed two trustees to explore an asset sale to a third party to keep VanMoof running.
Legal entities outside of The Netherlands are part of the group, but they not involved in these proceedings. It’s unclear what that means for operations in, for example, the United States, but stores there have been closed globally since last week.
The full statement from the company:
On 17 July 2023, the court of Amsterdam withdrew the suspension of payment proceeding of the Dutch legal entities VanMoof Global Holding B.V., VanMoof B.V. and VanMoof Global Support B.V. and declared these entities bankrupt.
The two administrators Mr. Padberg and Mr. De Wit have been appointed as trustees. The trustees are continuing to assess the situation at VanMoof and are investigating the possibilities of a re-start out of bankruptcy by means of an asset sale to a third party, so that the activities of VanMoof can be continued.
The VanMoof legal entities outside the Netherlands are not in insolvency proceedings.
There will be no further comments at this time.
The development caps off a very difficult couple of weeks for the Dutch startup. At the beginning of last week, we reported on how the company had paused sales, initially claiming that technical difficulties were the cause, and then later claiming that the pause was intentional, to catch up on production and orders.
Meanwhile, an increasingly angry customer base took to social media to complain about the quality of the bikes, after-sales care and much more. All of that played out against a background of a company burning through its cash reserves and struggling to raise more money to stave off insolvency and to pay its bills.
Before the week was out, the company was in court asking for an official suspension of payment provision to hold off paying bills while it restructured its finances under the direction of administrators.
The purpose of the provision is to try to stave off bankruptcy, giving more of the creditors a chance of recovering what they are owed, and keeping VanMoof in better financial standing for whatever steps came next. It can last for up to 18 months, but only if the company has the funds to continue. Clearly it was only a matter of days before the court determined that bankruptcy and looking for a buyer for the assets was the inevitable next step.
It’s not clear where bankruptcy will leave those who have purchased bikes that have yet to be received, or those whose bikes are being serviced, or what happens if you own a VanMoof bike that breaks down since the custom design means they are not able to be fixed by just anyone. All of that is surely a frustrating state of affairs, considering that the bikes can cost as much as $4,000.
But for current owners who have bikes that are working, not all is lost. We’ve reported on how Cowboy, one of VanMoof’s big rivals, has wasted no time in building an app to unlock VanMoof bikes — important because they can end up bricked in their basic state, since their working is tied closely to the use of the VanMoof app, and the VanMoof app will not continue to be supported.
That points to an alarming prospect for VanMoof and its investors: if the unit economics of the bikes never worked out, and an app can be built in a day to unlock those bikes that are in the market already, why would anyone want to assume the assets of the failed startup?
We’ll update this post as we learn more.