The insolvent rental company for e-cargo bikes had been looking for a buyer for weeks, to no avail. One of the founders explained the failure with the latest election results in Berlin.
At the end there is nothing left but a yellow colored clue. “Goodbye Avocargo” has been on the homepage of the Berlin start-up for a few days. The company that rents out electric cargo bikes via an app stopped its service on April 3rd. “Thank you for supporting us in making cities better,” writes the startup to its customers. It’s the end of a misunderstanding worth millions — at least from an investor’s perspective.
Avocargo filed for bankruptcy in early February. A planned round of financing had previously collapsed at short notice. Since then, the startup has been trying for two months to find new financiers or a buyer. Without success, as Avocargo founder Marc Shakory Tabrizi explained when asked by the start-up scene. “There were a few interested parties, but the investment needed to break even was too big for them,” says Shakory Tabrizi, who had promised early profitability during the talks. “We could have done it in 12 to 18 months.”
All employees were terminated
The founder attributes the reluctance to the ongoing difficult market environment, especially in the mobility sector. Many rental companies suffered from heavy losses and rating corrections, according to Shakory Tabrizi. “Many investors are burned children and don’t dare to invest again in the sharing business.” Avocargo is now being wound up. The 31-year-old says that the 16 remaining employees have already been made redundant for operational reasons.
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A pioneering project is coming to an end in Berlin. When Avocargo was launched two years ago, the startup was one of the first rental providers to offer e-cargo bikes in the capital. The bikes could be rented and parked freely within the business area. The rental was done via app.
Marc Shakory Tabrizi and his co-founder Matti Schurr initially demonstrated perfect timing: Not only did the launch fall in the midst of a corona-related boom in demand for cargo bikes. In politics, the three-wheeled companions were also an election campaign topic at the time. There was even talk of a purchase premium as an alternative to subsidies for electric cars.
“The time of cargo bikes is yet to come”
At Avocargo, the momentum initially also had an impact on the investor side. According to the founders, “several million euros” flowed into the company. But the hoped-for breakthrough beyond the city limits of Berlin did not materialize. Although Avocargo expanded to Munich, it withdrew there again last year as a result of the Ukraine war. The start-up was unable to meet the new expectations of investors for rapid profitability. With around 200 cargo bikes and 17,000 registered customers, the offer lacked the critical mass.
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Shakory Tabrizi: “Of course we also made mistakes, but in fact we had a lot of bad luck with the timing towards the end”. The founder also refers to the recent election results in Berlin, where the Greens – who had previously campaigned for sustainable mobility offers – lost their participation in the government. Corresponding simplifications, for example greater financial support for cargo bikes, are therefore not to be expected for the time being.
Tabrizi still believes that the three-wheeled vehicles will establish themselves in the cities in the long term. “The heyday of cargo bikes is yet to come,” he says. In a few years, acceptance will be significantly higher than today. He himself could imagine founding a company again.