VanMoof

What did it do?

VanMoof was a company founded in Amsterdam in 2009 that made conventional bicycles at first and later only electric bikes. It sold bikes manufactured for it in Taiwan in 32 countries and ran its own shops in cities such as Amsterdam, Berlin, Paris, London, Tokyo and New York. Its bikes featured GPS trackers, automatic gear shifting and batteries integrated into the frame.

Why did it shut down?

Although VanMoof's designs won awards, some customers complained of shipping damage, late deliveries, mechanical and technical faults and poor customer service. From 2021 onwards durability problems were reported, including frame damage, electrical faults and an inability to get repairs or spare parts in good time. In June 2023 online sales stopped, and on 12 July the company obtained court protection from its creditors. With total debts of EUR 143.8 million, the Dutch companies were declared bankrupt by an Amsterdam court on 17 July 2023; the UK, German and US units then entered bankruptcy proceedings too.

The story

At the end of June 2023 several websites reported that VanMoof was in financial trouble and had halted online sales on 29 June. Within a few weeks the Dutch electric bike brand, which had collected Red Dot awards for its design and was a favourite of urban cyclists, was in bankruptcy.

VanMoof was founded in Amsterdam in 2009 by Taco and Ties Carlier. Its name was a Dutch take on the English word "move". The company started with conventional bikes and in 2012 sold around 10,000 bicycles worldwide. In 2014 came its first electric model, with a GPS tracker, an automatic two-speed gearbox and a battery integrated into the frame; over time it focused solely on electric bikes. Its Taiwan-built bikes were sold in 32 countries, and shops opened in Amsterdam, Berlin, Paris, London, Tokyo and New York. Sales rose from USD 12 million in 2018 to around USD 48 million in 2019. More than USD 100 million in capital was raised from investors including Felix Capital, Balderton Capital, Hillhouse Capital and Norwest Venture Partners; USD 40 million came in 2020 alone.

The flip side of the brilliant design was service. Some customers who bought the S3 model complained of shipping damage, late deliveries, mechanical and technical faults and inadequate customer service. From 2021 onwards durability problems were reported, including frame damage, electrical faults and an inability to get repairs or spare parts in good time. In May 2022 the founders handed operational management to Gillian Tans, former CEO of Booking.com.

On 12 July 2023 a Dutch court granted the company protection from its creditors, and the shops were closed. VanMoof owed EUR 143.8 million to creditors including investors, suppliers and tax authorities. On 17 July the Dutch companies were declared bankrupt by an Amsterdam court; the UK, German and US units entered bankruptcy proceedings in August. On 31 August 2023 Lavoie, the electric scooter unit of McLaren Applied, bought the brand, and the VanMoof name lived on under its new owner; but the company the Carliers had founded ended in bankruptcy in 2023.

VanMoof shows that however ambitious you are in product design, after-sales service is the real test of a brand.

Lessons for founders

• Match your sales pace to your service and spare-parts capacity; a product that takes weeks to repair drives away even loyal customers.
• In hardware, measure growth not by revenue growth but by contribution margin per unit; if no margin forms while sales multiply, scale only magnifies the problem.
• Even if the brand is sold to someone else after bankruptcy, for investors and employees the company has closed; weigh up rescue options before the cash runs out.

Sources

1. VanMoof (Wikipedia)
2. Dutch e-bike maker VanMoof bankrupt, administrators may sell assets (Reuters, 2023-07-18)
3. VanMoof, Trendy E-Bike Brand, Bought Out of Bankruptcy by Scooter Maker (The New York Times, 2023-08-31)

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