Electric motorcycle company Cake engaged in discussions with Harley-Davidson and other automakers in 2023 in an effort to navigate its challenges, CEO Stefan Ytterborn revealed in an interview with TechCrunch on Tuesday.
While the discussions were not previously disclosed, they did not lead to any agreements for the Swedish startup, which recently filed for bankruptcy. Nevertheless, Ytterborn remains optimistic about finding a path through bankruptcy and emerging with a partner on the other side.
“I’ve had 40 meetings in the past three days,” Ytterborn shared, noting that most of them involved two-wheeler brands exploring potential collaborations.
Cake secured $14 million in its Series A funding round in 2019, primarily from venture funding, with the aim of producing high-design electric motorcycles and mopeds at scale. This was followed by a $60 million Series B round in 2021 led by Swedish pension fund AMF, providing institutional support to the startup. Ytterborn revealed that Cake began seeking a Series C round as early as August 2022, expecting a mix of institutional and VC investors to participate.
However, VC interest waned significantly by the end of the year, making closing a Series C round unexpectedly challenging. As VC interest dwindled, Cake redirected its focus from European to North American investors. Unfortunately, any progress made was disrupted by the Silicon Valley Bank crisis in spring 2023, which deterred potential investors.
Cake then engaged Deutsche Bank and investment bank Numis, pitching to automakers like Harley-Davidson. While many were receptive, no deals materialized. Ytterborn hinted at exploring various options, including investments and strategic partnerships.
Collaborating with an automaker seemed logical, especially considering the evolving urban landscape and increasing city center restrictions across Europe. Cake’s failure to secure a deal led to a focus on extending its financial runway, supported by the lead investor of the Series B round, until it eventually ran out, leading to the decision to file for bankruptcy.
Despite the bankruptcy filing, Ytterborn emphasized the intention to seek a partner willing to invest in the company and management, enabling restructuring and continuation of the journey.
While navigating the current high-interest-rate environment and industry challenges presents significant hurdles, Ytterborn remains determined to find a way forward, acknowledging the difficulties faced during Cake’s journey from 2017 to 2022 and expressing optimism about the future.