VanMoof can no longer pay its bills. After negotiations about a new capital injection failed, the parent company of the bicycle brand applied for and received a postponement of payment from the court on Tuesday evening. A spokesman for the court in Amsterdam confirms this NRC.
The management would initially send an email to all employees on Wednesday to explain the state of affairs, but that now seems to be Thursday morning. The court will then publish the suspension of payments on Rechtspraak.nl.
The news will come as no surprise to the staff (700 people work at VanMoof). The employees had to close all dozens of European VanMoof stores around 3 p.m., including the store located at the head office in Amsterdam.
Rising interest rates make it more difficult for VanMoof to sustain its aggressive growth strategy
Photos of closed doors are also surfacing online. In Amsterdam, angry customers are at the door because they cannot pick up their bicycle that they brought to VanMoof for repair. The official VanMoof app, which owners can use to unlock their bicycle, is also not available to all customers.
Two administrators have been appointed by the court. From now on, the management needs permission from these administrators for important decisions, such as new orders or entering into new financing.
Heavy weather
VanMoof, which was founded in 2009, has been in dire straits for some time now. The company has accumulated increasing losses in recent years. VanMoof recorded a net loss of around 6 million euros in 2019, the following year the losses increased to 35 million euros and in 2021 to almost 80 million euros. A similar loss is foreseen for 2022. Each time, fresh capital injections from investors kept the company afloat.
Read also: The e-bike is doing well, VanMoof less so
That now seems to have come to an end. Reported earlier today The Financial Times that crowdfund platform Oneplanetcrowd is taking legal action because the bicycle manufacturer does not meet its payment obligations. VanMoof has also stopped accepting new orders for two weeks. The company initially claimed that this was due to a computer malfunction, currently the reason given on the company’s website is that the ‘temporary’ break allows production and delivery of previous orders to be made up.
The financial problems are partly due to the company’s strategy. VanMoof has focused on rapid growth in recent years. For example, the company’s turnover grew by 29 percent to 83 million euros between 2020 and 2021. However, due to the increased interest, it is more difficult to raise money. This makes it more difficult for VanMoof to maintain that aggressive strategy.
VanMoof has also made design decisions in recent years that seem to have gone wrong. For example, VanMoof designs most of the parts in its e-bikes itself. It also keeps the service and repair in-house. As a VanMoof owner, you are therefore dependent on the manufacturer for repairs that are more complicated than fixing a tyre.
That caused a lot of problems for VanMoof. For example, in 2021 the company had lost 8 million euros on repairs and warranty. About 10 percent of the popular S3 model had to go back to the store within a year. And because service capacity didn’t grow fast enough with sales, owners sometimes had to wait months for parts or repairs. The result: online it rained complaints.
Front porch
It is not yet clear what will happen with the supply of parts and repairs. Deferment of payment is often a precursor to bankruptcy, but not always. If the company closes its doors permanently, another party will have to take over the production of parts to keep the bikes running.
Potentially more drastic is the fact that the bikes don’t have a key. The bikes can be opened in two ways: with an app or with a code that you can set via the app. If VanMoof goes bankrupt and nobody takes over the company, the app will probably disappear from the Apple and Google app stores after a while.
No one at VanMoof was available for comment Wednesday afternoon.