It's been a rough time for Cake Motorcycles lately.
In January 2024, we reported a National Highway Traffic Safety Administration safety recall on some Cake Kalk dual sport motorcycles with battery cells that could potentially catch fire. At the time the recall was reported, Cake's documentation said that its plan was to have replacement batteries available to affected customers later down the line in 2024.
While we can't say for sure that plan won't work out, we can say that things look decidedly murkier than they might have last month.
On February 1, 2024, multiple Swedish business news outlets reported that Cake Motorcycles is in the process of filing for bankruptcy. RideApart has reached out to Cake Motorcycles for comment and will update this piece with any response we receive.
What Went Wrong?
Multiple factors added up at once, according to what Cake CEO Stefan Ytterborn told the Swedish financial newspaper Dagens Industri. The most recent blow came in the form of failed negotiations for Cake's most recent round of funding, which apparently fell through completely on January 31, 2024.
Fellow Swedish business publication Breakit reported on January 24, 2024 that Cake's financial situation was so dire that it couldn't pay salaries for its approximately 139 employees.
"It is not one but several circumstances that have caused us to end up in this situation. Climate issues are no longer in focus, we are in a recession. It's about us, but it's also about the venture capital ecosystem. At the moment it is completely dead, there are no takers in the later phase Cake is in," Ytterborn told DI.
One of those factors, according to Ytterborn, was the realization that you can't expect people to pay 40,000 Swedish Krona (that's about $3,811 USD at current conversion rates) for something online that they haven't ridden. The company's initial direct-to-consumer website sales plan, he said, would be more likely to draw customer interest if they had better opportunities for test rides.
By 2023, there were a greater number of consumer (not business fleet) sales, thanks in part to making the bikes more accessible for test rides in their existing markets. Still, the company sold around 6,000 bikes in total. It estimates that it won't achieve profitability until it can sell 7,500 to 10,000 bikes a year, at the very least.
Cake reportedly also has six different share classes for investors, with differing rules about which classes get dividends before other classes. This disincentivizes potential shareholders from wanting to join a lower class that is less likely to receive dividends.
Swedish Companies Registration Office Confirms The Filing
A public records search shows that bankruptcy proceedings for Cake officially began in Sweden on February 1, 2024. It's not yet clear how this story will play out, because the proceedings are still in progress.
What we can tell you is that DI reports six entities as the largest shareholders in the company. They are:
| Shareholder | Percentage of Cake Motorcycles Owned |
| AMF (Swedish pension company) | 11.3% |
| Stefan Ytterborn, Cake CEO | 10.4% |
| Creandum (Swedish venture capital company) | 10.4% |
| Back in Black Capital | 9.3% |
| Headline (American VC firm) | 9.2% |
| Rutger Arnhult | 6.4% |
For a thorough rundown of the company's financials, including its losses, the DI piece is worth a read (remember, we're RideApart, not FinanceApart).
At the time of writing, Cake has yet to issue any official statement regarding any of this news. The most recent official statement available on Cake's website was posted on January 25, 2024, and regards the company's proud announcement of a new distribution network for its bikes in the Czech Republic.
RideApart will continue to report any information we learn, including any official statements from Cake as they arise.
