Pioneering electric bicycle manufacturer VanMoof was declared bankrupt in the Netherlands on Monday by the Amsterdam District Court, following the company's pandemic-time boom.
VanMoof's court-assigned administrators are now looking into whether the Dutch company could be restructured or sold so that it can continue operations in the Netherlands.
Known for selling sleek high-end bikes with integrated theft protection, VanMoof is one of the most prominent electric bicycle companies in the world, often dubbed the "Tesla of e-bikes".
The company has outposts in 20 cities around the globe – across Germany, France, England, Japan and the US – but only its Dutch operations are involved in the insolvency proceedings.
The news comes three years after the company tripled its sales in 2020, buoyed by the pandemic cycling boom.
A year later, VanMoof raised $128 million in funding, declaring itself "the world's fastest-growing and most well-funded e-bike brand".
"The more bicycles VanMoof sells, the greater the loss"
The bankruptcy announcement has led some news outlets, including British newspaper The Telegraph, to forecast the end of the bicycle boom.
But while it's true that e-bike sales in the UK decreased by three per cent last year due to the mounting cost of living crisis, statistics suggest that sales across the rest of Europe continue to grow in the double digits, replacing the demand for manual bicycles.
According to Dutch financial newspaper Het Financieele Dagblad, VanMoof's financial troubles are down to the outsized costs of manufacturing and repairing its e-bikes, which consist of various patented parts that cannot be fixed by or replaced in a regular bike shop.
The associated costs actually outweigh the company's earnings, the paper found, resulting in a gross margin loss of €11.9 million.
"That points to a fundamental problem," the outlet declared earlier this year. "The more bicycles VanMoof sells, the greater the loss."
International entities to stay "running as usual"
The company stopped accepting new online orders several weeks ago, as well as halting the sale and delivery of spare parts. All repair appointments in the Netherlands have been suspended.
However, the company claimed in a statement that its 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".
It is currently uncertain how the bankruptcy will affect VanMoof's international entities, although the company says the aim is to keep them "running as usual".
VanMoof was originally founded by Dutch brothers Taco and Ties Carlier in 2009, with a design by Sjoerd Smit that featured an aluminium frame and solar-powered lights.
The company quickly rose to popularity with its flagship models S2 and X2, which were longlisted for a 2019 Dezeen Award and totalled 2,500 online orders in the first 24 hours.