Amsterdam-based developer and designer of urban e-bikes VanMoof is facing a financial conundrum. According to 2021 sales figures crunched by Dutch financial media outlet FD, the cost of selling a VanMoof bike is greater than that of the purchase price, resulting in a gross margin loss of €11.9 million, a figure up from a loss of €6.7 million just one year prior.
Quite simply put, the more pedelecs VanMoof sells, the more money they lose.
These numbers arrive in stark contrast to the company’s 1 September 2021 $128 million funding announcement in which it claimed it was, “the most funded e-bike company in the world” which may be the case, but now we know why. Brand recognition can only carry a company so far.
Not only are VanMoofs costing more to sell than they are to build, but that darling-of-the-urban-hipster brand recognition has been tainted by another recognisable feature of VanMoof: more time in the shop than on the road.
According to FD, in 2021, the cost of repair or replacement under warranty of VanMoofs wares racked up a staggering €8 million. About that €11.9 million loss? Starting to become clear?
And things aren’t exactly improving at VanMoof, as when they launched their S3 and X3 bikes in April of 2020, a number of the same issues that plagued previous deliveries resurfaced, despite the company promising a “hyper-efficient manufacturing and distribution system.”
Adding to the woes, some customers reported their ~$2,000 investments arriving with scuffs, scratches, and assorted damages that occurred during shipping. Wobbly wheels, faulty hydraulic brakes, and a wide range of non-sensical error codes on the bike’s display.
Now add to the fact that VanMoof, for better or for worse, for the low, low price of £550 will offer up to three years of free maintenance, and, here’s the kicker, theft protection that includes a replacement model if the stolen object of riders’ affection can’t be recovered in two weeks.
While Alex Hern’s recent profile of VanMoof co-founder Ties Carlier for the Guardian points to the fact that he, “is still focused on addressing the pain points that stop so many from cycling,” I, potentially many an investor, and past, current, and future VanMoof customers might want Carlier to be focusing a bit more focus on the bottom line to ensure the longevity of the company rather than how to best reinvent the wheel.
Competitors such as Belgium's Cowboy and Estonia's Ampler are certainly noticing and arguably building better bikes as the once industry leader VanMoof is showing signs of struggling to keep up.
VanMoof has raised $189.1 million since July 2017 and is backed by Balderton Capital, Felix Capital, TriplePoint Capital, Norwest Venture Partners, Hillhouse Capital Group, Slingshot Ventures, Sinbon Electronics, and Booking.com’s Gillian Tans.
