From VanMoof to VanPoof! How did the e-bike pioneer go bankrupt, even as the market boomed?

Troubled e-bike maker VanMoof — which had raised a total of $189.1 million from the likes of Balderton Capital and Felix Capital, among other investors — has now officially gone bankrupt in the Netherlands after barely a week in an administrative process. As TechCrunch previously reported, the company was in a “suspension of payment” process, with court-assigned administrators, after we broke the news that it had suspended bike sales.

VanMoof owners are now in a quandary, as the VanMoof ebikes require highly customised parts as well as require a unique digital key connected to VanMoof’s servers to function fully, although they are able to be operate in a basic fashion without these. Somewhat improbably, competitor Cowboy even came up with an app to allow VanMoof owners to retain the digital keys to their bikes.

With all that said, the company says its e-bikes “will remain functional and rideable, as we aim to keep our app and servers online and aim to secure the ongoing services for the future.”

In the meantime questions will be asked as to how an e-bike maker, with a long history and established supply chain, could go bust in the middle of a post-pandemic e-bike boom.

E-bike market boom

According to Fortune Business Insights, the e-bike market is expected to experience rapid global growth. The market, which was valued at $35.69 billion in 2021, is projected to grow to $91.19 billion by 2029 with a compound annual growth rate (CAGR) of 12.6%.

Meanwhile, in Germany for instance, dry weather has seen e-bike numbers pick up considerably, according to the ZIV Zweirad-Industrie-Verband (Bicycle Industry Association). Q1 2023 saw 260,000 bicycles were exported, 14% up on Q1 2022 and eBike exports stood out, at 190,000 units, 56% more than Q1 2022.

“VanMoof focused on marketing and spent big, but forgot to think about supply chain and unit costs. I hear they sat on a lot of faulty stock and over-ordered after the Covid delays.”

Questions may also well be asked of the backers. Thus far there has been silence from VC-bakers including London’s Balderton Capital, which was in the Series C round. Other investors included Felix Capital (London), ex-Booking.com CEO Gillian Tans, US-based TriplePoint Capital, Norwest Venture Partners, Stew Campbell, Hillhouse Capital Group, Haoyu Shen, SINBON Electronics and Slingshot Ventures, according to Crunchbase.

As one e-bike industry insider told me: “VanMoof focused on marketing and spent big, but forgot to think about supply chain and unit costs. I hear they sat on a lot of faulty stock and over-ordered after the Covid delays.”

This emphasis on marketing over product excellence, supply chains and unit costs may well have led to VanMoof’s downfall.

Was VanMoof so ‘drunk’ on VC cash pumping its marketing budget that it forgot to pay attention to costs?

It didn’t help that the crisis communications at the company could have been handled better.

Despite these tumultuous times, the company stayed largely silent about the rumours surrounding it, other than characterising the delays in sales as ‘a feature, not a bug’ when, in late June customers discovered its online ordering system was no longer working due to “Unscheduled system maintenance”.

Soon after, the company’s Twitter account elaborated to say it was a technical glitch causing the issue.

The story changed again a few days later when a spokesperson told Techcrunch the pause was actually intentional, to “catch up on delivery and production of existing orders.”

But the rest, as they say, is history.

Today, an internal e-mail sent to staff from VanMoof’s co-founders and brothers Taco and Ties Carlier, who started the business 14 years ago, said: “We feel sadness, but most of all we feel an immense sense of pride for what we have achieved together.” Here’s the letter in full:

Dear all,

Over the last weeks Ties and I have tried to find a future for VanMoof. We’re extremely sorry to have to report that despite our best efforts we did not succeed and we have had to file for bankruptcy. The administrators, who are now the trustees, will explain below what this means for you, but we want to take a very brief moment to thank you all from the bottom of our hearts.

We started VanMoof 14 years ago with a crazy idea to change the world. The only reason that we were able to make a dent is because of you: the hundreds of dedicated and loyal people that have helped us with our mission to change cities for the better. We’re grateful to each and every one of you and are sorry that we will not be able to see this mission through together.

We feel sadness, but most of all we feel an immense sense of pride for what we have achieved together. For us it’s been the honour of a lifetime and even though the current iteration of VanMoof ends today and we don’t yet know what the future holds, I’m confident that the VanMoof alumni will continue to be a force for good.

With the kindest of regards,

Taco and Ties Carlier