VanMoof Faces Bankruptcy for Dutch Legal Entities
Venture-backed Dutch e-bike startup, VanMoof, is currently grappling with financial difficulties, resulting in the declaration of bankruptcy for its Dutch legal entities. The Amsterdam court has appointed a couple of trustees to explore the possibility of selling assets to a third party in an attempt to keep the company operational.
The Declared Bankruptcy
On July 17, 2023, the Amsterdam court officially declared bankruptcy for VanMoof B.V., VanMoof Global Holding B.V., and VanMoof Global Support B.V. However, legal entities outside of The Netherlands are not involved in these bankruptcy proceedings. Customers who have purchased bikes that have yet to be received or are awaiting service for their bikes find themselves in a frustrating situation.
The Suspension of Payment Provision
Prior to the bankruptcy declaration, the company sought an official suspension of payment provision from the court to defer bill payments while undergoing financial restructuring under the guidance of administrators. The purpose of this provision is to try to prevent bankruptcy and offer creditors a better chance of recovering what they are owed, thereby improving VanMoof’s financial standing for future steps. The provision can last up to 18 months, contingent on the availability of funds to support it.
The Situation for Customers
At present, VanMoof’s stores in San Francisco, Seattle, New York City, and Tokyo remain open, while the rest of its stores have closed. The fate of customers who have yet to receive their purchased bikes or those awaiting bike servicing remains uncertain. Moreover, due to the custom design of VanMoof bikes, they may not be easily repairable by just anyone, posing additional frustrations for owners, particularly considering the bikes’ high cost.
The Company’s Statement
In response to the bankruptcy and the appointment of trustees, VanMoof provided a statement to TechCrunch. The statement asserts that the trustees are evaluating the situation at VanMoof and exploring the possibility of restarting the company through an asset sale to a third party, allowing VanMoof’s activities to continue.
The Paused Sales
VanMoof encountered financial challenges when it paused sales at the beginning of the previous week. Initially, the company attributed the pause to technical difficulties but later acknowledged that it was intentional to catch up on production and orders. During this period, disgruntled customers took to social media to express concerns about bike quality and after-sales care.
The Rivals’ Response
VanMoof’s primary competitor, Cowboy, promptly developed an app to access VanMoof bikes, as these bikes rely heavily on the use of the VanMoof app. With uncertainties surrounding the future support of the VanMoof app, this move raises concerns for VanMoof, its investors, and administrators seeking to sell the company. The ease with which an app was created to unlock existing bikes in the market raises questions about the startup’s unit economics and the appeal of assuming its assets.
The Future of The Company
While VanMoof’s legal entities outside of The Netherlands are not facing insolvency proceedings, the bankruptcy is still in its early stages. The hope is that the sale of the company’s assets to a third party will enable VanMoof to continue its operations. However, the future of VanMoof remains uncertain, and there are no definitive answers regarding the company’s fate, its assets, or its customers.
Conclusion
VanMoof’s financial challenges have led to the bankruptcy declaration of its Dutch legal entities. While some of its stores remain open, customers with pending bike purchases or servicing face a frustrating situation. The future of VanMoof is uncertain, with questions surrounding the company’s assets and the resolution of its current predicament.
FAQ
What is VanMoof?
VanMoof is a Dutch e-bike startup supported by venture capitalists.
What led to VanMoof’s bankruptcy?
VanMoof’s financial challenges started when the company had paused sales, due to technical difficulties, and then later claimed that the pause was actually on purpose. They claimed it was necessary to meet production and orders.
Will VanMoof continue operating?
The trustees appointed by the court are investigating the possibilities of a re-start out of bankruptcy by means of an asset sale to a third party so that the activities of VanMoof can be continued.
What happens to VanMoof’s customers?
It is unclear where bankruptcy will leave those who have purchased bikes that have yet to be received or those whose bikes are being serviced. Moreover, what is the solution if you have a VanMoof product that fails since the custom design means they are not able to be fixed by just anyone?
First reported on TechCrunch
