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Bicycle startup bankrupt with millions in debt after crowd campaign

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Bicycle startup bankrupt with millions in debt after crowd campaign

In September they explained to us in the podcast how they wanted to defy the dreaded bullwhip effect of the bicycle industry, but now it has happened to them: WSF Bicycle Technology, founded in 2020 by founders Alexander Schnöll and Roland Wallmannsberger, has ended up in bankruptcy. A restructuring process without self-administration is intended to attempt to get the ailing company, which manufactures bicycles on behalf of brands in Upper Austria, back on track.

There are two reasons for insolvency. On the one hand, there would have been a collapse in customer orders due to the current market and sales situation after strong growth in the years 2020 to 2022. This led to a sharp decline in market volume at the end of 2023 because there were hardly any new customers and significantly fewer orders from existing partners. “In 2023, the output was around 25,000 pieces, potentially up to 140,000 pieces could be produced at the company location,” says AKV in a statement.

In addition, there were also delays in the delivery of parts required for production, which resulted in “further time delays and delays, as a result of which some existing orders could not be completed on time or a large order could not even be started.”

The bullwhip effect: The scourge of the e-bike scene

Crowd campaign at Conda raised 400,000 euros in 2023

This also makes it clear at WSF: The bullwhip effect that has already affected other bicycle startups such as VanMoof or Gleam Bikes from the Netherlands has also struck the Upper Austrians. While around 1,500 bicycles were manufactured per month in the first quarter of 2023, there are currently fewer than 300 – production has therefore fallen to a fifth. The workforce was reduced from 49 employees to currently 15 employees.

The liabilities that ultimately drove the company into bankruptcy are also decent: “The liabilities of around EUR 2 million are offset by assets in the form of existing fixed and current assets amounting to around EUR 175,00.00. The greatest value is represented by the operating and office equipment as well as the existing means of production.
There are no real estate assets, the business premises are rented,” says the AKV. The restructuring plan provides for a quota of 20%, payable within 24 months.

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The bankruptcy is also bitter for all those who invested in the company during Conda’s crowd investing campaign. According to Conda, 257 crowd investors invested a total of 433,700 euros. The campaign was launched on August 24, 2023, and at the time there was talk of a “booming bicycle market”, a “proven business model” and “high demand”. It was communicated that they wanted to “increase the output of the factory hall from 25,000 bicycles and e-bikes per year to 100,000 per year by 2026”. Despite the completed crowd campaign at Conda, the opposite happened – output did not increase, but decreased. Now the company needs to be restructured.

WSF: How the bike startup defies the “bullwhip effect”.

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