Swedish electric motorcycle start-up CAKE has reportedly filed for bankruptcy after failing to raise enough funding to keep operations running. According to reports, CAKE was in the middle of a funding round when an investor’s withdrawal pushed the company over the edge. According to one report, CAKE CEO Stefan Ytterorn has confirmed that the company has indeed filed for bankruptcy on February 1, although details are not clear if the company has filed for bankruptcy protection or insolvency.
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The CAKE Bukk is a lightweight off-road electric bike deliveries of which had only begun recently.
The news comes as the company apparently failed to find the necessary follow-on funding in a C round that would have pushed towards higher volume production and profitability. According to several reports coming out of Sweden, CAKE founder and CEO Ytterburn attributed the financial struggles to factors ranging from internal issues to the global financial climate.
CAKE has an impressive line-up of off-road electric motorcycles.
CAKE raised $14 million in a Series A funding round in 2019, followed by a $60 million Series B round in 2021, which aimed to support the company’s manufacturing facilities and retail expansion plans in Europe, North America and Asia. In fact, CAKE showcased its products at the 2023 Auto Expo in India, and representatives of the company had told carandbike then that the company was actively looking for a partner in India to set up assembly and a manufacturing plant.
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The Swedish brand showcased its products in India, and was actively looking for a local partner to set up shop in India.
In recent months, CAKE has been struggling with challenges. In November 2023, the company issued a recall for one of its mopeds due to a steering column defect. Shortly after, its flagship Kalk e-motorcycle was recalled after a unit caught fire in a South Korean dealership. Together with these challenges, the company was unable to make salary payments to employees, which contributed further to the company’s problems.
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While the story of the brand isn’t over yet, it will need to find significant investment for a new lease of life, perhaps a larger brand which will take over CAKE. Will any of the Indian manufacturers show interest? Time will tell, but CAKE certainly has some impressive products, and we for one, were quite thrilled with the prospect of the brand making its India debut.
