Electric Last Mile Solutions
Liquidated a year after listing: the USD 1.4 billion electric delivery van start-up
- Founded
- 2020
- Closed
- 2022
- Lifespan
- 2 years
- Peak valuation
- $1.4 billion
- Became a unicorn
- 2021
- Country
- United States
- City
- Auburn Hills
- Sector
- Mobility and transport
- Founders
- James Taylor, Jason Luo
- Investors
- Forum Merger III
- At its peak
- On Nasdaq in June 2021 through a USD 1.4 billion merger
- Cause of closure
- Ran out of cash
What did it do?
Electric Last Mile Solutions (ELMS) was a Michigan-based company that set out to build light electric commercial vehicles for last-mile delivery. James Taylor and Jason Luo founded it in 2020. It planned to assemble its Urban Delivery van from imported Chinese bodies at a former General Motors plant in Mishawaka, Indiana. It reached Nasdaq in June 2021 through a USD 1.4 billion merger announced in December 2020.
Why did it shut down?
On 1 February 2022 chief executive James Taylor and chairman Jason Luo resigned after an internal probe found pre-listing share purchases at a discount; the stock fell 51.5% the next day. The company cut nearly a quarter of its staff, withdrew its 2022 guidance and in May faced Nasdaq delisting over late filings. It parted with its auditor BDO and did not find a replacement. In May it said it was running out of cash, and the plant's owner cut mortgage payments for four months. With no new money, it filed for Chapter 7 in Delaware on 14 June 2022.
The story
ELMS was founded in 2020 by James Taylor and Jason Luo. The plan was simple: build last-mile delivery vans in the US from bodies imported from China. A former General Motors plant in Indiana was chosen for the work.
In December 2020 a USD 1.4 billion merger with Forum Merger III was announced. By June 2021 the company was on Nasdaq, about a year after its founding.
In February 2022 the picture changed. An internal probe found that senior executives had bought shares at a discount before the listing, without an independent valuation. Taylor and Luo resigned and the stock fell 51.5% in a day.
The problems then piled up: layoffs, withdrawn guidance, late filings and no auditor. In May the company warned it was running out of cash. Interim chief executive Shauna McIntyre said there were too many obstacles to overcome in the time available. The Chapter 7 filing came on 14 June 2022. Chair Brian Krzanich called it the only responsible next step.
Lessons for founders
- Clean up your cap table before you list: when the founders' discounted share purchases came to light within a year, the company lost half its value in a day.
- Failing to find an auditor means failing to find money: when filings run late, both the exchange and investors close the door. Build your accounting before the listing.
- Going public before production starts leaves no margin for error: when the first big crisis arrives, you have no revenue to buy you time.
Sources
- Electric Last Mile Solutions to file for bankruptcy (TechCrunch, 2022-06-13)
- Electric Last Mile Solutions files for bankruptcy liquidation (FreightWaves, 2022-06-13)
- Shares of EV start-up Electric Last Mile plunge more than 50% after CEO, chairman resign (CNBC, 2022-02-02)
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