VanMoof is looking hard for new investors, but according to experts bankruptcy seems inevitable. Are there bike manufacturers that can take over VanMoof? Or can VanMoof turn to other companies?
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“The most funded e-bike company in the world.” That’s what VanMoof called itself at the end of 2021. The bicycle brand received almost 200 million euros in investments from the brothers Taco and Ties Carlier. But the losses mounted. In 2019, VanMoof lost 6 million euros, in 2020 it was 35 million, in 2021 it rose to almost 80 million and last year it would have been around 80 million again. At the beginning of this year, VanMoof needed between 10 and 40 million, but the investors ‘only’ put together a few million. Without that extra injection, VanMoof would have run into problems sooner. After VanMoof has been granted a deferment of payment, administrators are looking for a solution. Which companies could still see a future in VanMoof?
Bicycle giants
The two largest bicycle manufacturers in the Netherlands, Pon and Accell, recently gave VanMoof no response. Pon took over VanMoof competitor Veloretti last year, but the company behind Gazelle and Kalkhoff, among others, dismissed VanMoof. Accell, known for bicycle brands such as Sparta and Batavus, also did not want to invest money in VanMoof.
Internationally, there are a few companies in the bicycle market big enough to acquire VanMoof. The Taiwanese Giant, for example, is the largest bicycle manufacturer in the world. The American company Trek is another big player. The parent companies Giant and Trek have several bicycle brands in their portfolio, which VanMoof may fit in between. In addition, Merida and Yamaha are major parties.
“I don’t see Giant or Trek getting into VanMoof any time soon. The only reason could be that they also have a brand that sells bicycles directly to consumers on board, but one with a huge backpack,” says Arnauld Hackmann, editor-in-chief from Nieuwsfiets.
Tweewieler editor-in-chief Harrie Hoitink also doubts whether a bicycle manufacturer will invest money in VanMoof. “First of all, VanMoof has quite a service problem, which will cost a lot of money to solve. In addition, some of the manufacturers – such as Cortina with the E-Lett and Bird with the Bird Bike – already have a ‘VanMoof killer’ themselves. ‘, which will have more opportunities if VanMoof is off the market. So how big is their importance?”
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Parts and repairs
What makes VanMoof even less attractive to bicycle manufacturers is that the e-bikes have components specially designed for the brand. There are no economies of scale for companies: they cannot use the parts for bicycles of their other brands. Customers rely on VanMoof and a small number of certified partners for maintenance and repairs. That’s where the shoe pinches, because no less than 10 percent of VanMoof’s e-bikes had to be returned to the store within a year. In 2021, the Amsterdam company had lost about 8 million euros in warranty and repair costs.
Moreover, the timing could hardly be worse. Sales of e-bikes have been disappointing lately. Demand lags behind compared to the corona years, when record numbers were sold. According to experts, bicycle sales even got off to a slow start this year. Many large manufacturers are currently holding huge stocks.
Investors and car manufacturers
VanMoof will undoubtedly turn to a whole series of venture capitalists, from whom it previously managed to raise tens of millions. But will they still bite after the recent problems? “Perhaps an American party, the brand seems to do better there,” says Hoitink. But due to the rising interest rates, the investment climate is much less favorable, making it more difficult to raise capital.
Hoitink is also thinking of ‘car manufacturers who want to broaden their range of mobility’. “But there too, the number of service claims and therefore the financial risks are enormous.” Hackmann: “There is certainly money in the car sector, but they will also run into the same problems.”
If another party sees bread in VanMoof, it will have a lot of rubble to clean up, according to Hackmann. “They don’t have it in order financially, but neither does the quality and aftersales. Those are issues that can be resolved, but perhaps even worse is that the image of the VanMoof brand name is shattered. Trust comes and goes on foot on horseback. I’m afraid this applies to VanMoof as well.”
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The fall of VanMoof: what next?
‘Bankrupt estate is bought up’
Bankruptcy seems inevitable. Hoitink: “I don’t think an investor will be found in the short term. Anyone who would like to do something with the brand will wait for bankruptcy and then strike. Then you will have lost the debt burden and also the many claims that will undoubtedly come. You do have the VanMoof brand and you reap the benefits of the built-up brand awareness and the many marketing euros that have been invested.”
Hackmann would be very sad if VanMoof disappears. “It’s a shame, they completely let it slip out of their hands. VanMoof was certainly innovative and sometimes had brilliant marketing. They had more eye and feeling for that than other essential things.”
But he says it looks bad. “Who knows, maybe they’ll blow things up and someone from the bankrupt estate will buy the VanMoof brand name.” That scenario – where the bankruptcy is awaited to make a deal with the trustee – is very common in suspensions of payment.
Consequences for other manufacturers?
Does the malaise at VanMoof also affect the other manufacturers of e-bikes? The cycling experts think it’s not too bad. Hoitink: “The VanMoof buyer is a specific customer. They can now turn to other brands for an alternative. Dealer-driven brands will not regret the course of events.”
Hackmann also does not expect it to have much effect. “There are more than enough alternatives that have things on track and also make nice bikes. They can parry the negative publicity about VanMoof. VanMoof may have been a bit ahead of its time at one time, but there are plenty of brands that now also offer trendy e-bikes.”
See also: The fall of VanMoof – what next?
Read our articles about VanMoof.
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2023-07-16 20:40:36
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