CAKE, the renowned Swedish electric motorcycle manufacturer recognized for its distinctive designs, is reportedly facing bankruptcy as it struggles to secure adequate funding for continued operations. The company’s board has allegedly submitted a bankruptcy application, although no official statement has been released by CAKE.
Despite recent press announcements, including plans for further European expansions and the introduction of its latest electric motorcycle model, the CAKE Bukk, signs of financial trouble emerged with reported salary payment suspensions last week.
See also: CAKE Launches Flagship Site in Seoul, South Korea
The reported bankruptcy filing coincides with CAKE’s apparent inability to secure follow-on funding in a C round, essential for scaling up production and achieving profitability. Founder and CEO Stefan Ytterborn cited various factors, from internal challenges to the global economic climate, contributing to the financial struggles.
Ytterborn acknowledged that CAKE filed for bankruptcy on February 1, 2024, after a lead investor withdrew support just before the scheduled closure of the most recent funding round.
Majority ownership of CAKE is held by a few key entities, including AMF (Swedish pension company), Stefan Ytterborn (founder of CAKE), Creandum (Swedish venture capital company), Back In Black Capital (Lundin family’s investment company), Headline (American venture capital company), and Rutger Arnhult (property profile).
Despite multiple sizable funding rounds in recent years, CAKE reportedly failed to achieve the necessary annual motorcycle production volume to attain profitability. The company’s complex share structure, with as many as six different classes of shares, may have contributed to challenges in attracting follow-on funding, as newer investors reportedly received lower dividend priority.
While some electric motorcycle companies face financial challenges, the industry has witnessed the emergence of new players with seemingly stable financial positions and robust production outlooks. Established motorcycle manufacturers like Harley-Davidson and Kawasaki have also made strides in the electric motorcycle sector, providing increased stability and financial support to the industry.
