In recent years they have become known for their car sharing with Tesla cars and for the tokenization of these electric vehicles – and now the big setback follows. An email to crowd investors currently informs them that the company’s car sharing service will be discontinued. The reason for the move is the high operational costs and the burden of interest on fleet financing. “This partial business closure will take place as part of a judicial restructuring process,” the letter states. The car sharing fleet will be completely discontinued.
“Car sharing thrives on maintaining the densest possible network of cars and a large fleet of vehicles. This is the only way the business model can be operated profitably. Many investors are also suffering from this market change, which is why startup investments in the shared mobility sector have become less lucrative. Due to the current market conditions, growth is difficult,” the customer continues. Eloop – behind Caroo Mobility GmbH, founded by founders Leroy Hofer and Nico Prugger – has collected a whole series of investors over the years, including C&P Ventures, Lucky Car, Bitpanda co-founder Christian Trummer, Smart Energy Innovation Fund, and the European Super Angels Club around Berthold Baurek-Karlic or ex-footballer Andreas Ivanschitz.
Renovation procedures planned
“Due to these facts, the business cannot currently be operated profitably. That’s why we had to decide with a heavy heart to stop car sharing, even though we still believe that it will be the future of urban mobility. This partial closure of operations will take place as part of a judicial restructuring process,” it continues. Leroy Hofer, CEO and co-founder: “With a heavy heart, but with a clear plan for restructuring in mind, we are going bankrupt with ELOOP. With our great team, we have created a completely new form of e-car sharing and redefined the ‘sharing’ of shared vehicles. Unfortunately, we cannot continue this service under the current economic conditions, although we still believe that car sharing is the future of urban mobility. As part of the partial closure of ELOOP, we are forced to liquidate our fleet.”
“Damage eliminates any operational profits”
The customers themselves, including apparently many young people, are also likely to have become a problem for the car sharing service. “In addition, we are increasingly having to contend with serious vehicle damage and even total loss. In many cases, such as passing on an account to people under 23, the insurance is canceled and ELOOP covers the entire costs. It is important to us to emphasize that these are just a few users and the majority of people use the service conscientiously. However, damage of this type eliminates any operational profits and also increases insurance costs,” the letter says. As reported, around the beginning of the year, young people gained access to one of the Teslas and rushed the car (more on that here).
Tokenization is here to stay
Eloop not only brought investors on board, but also raised additional money by selling ELOOP One tokens to crowd investors – with the promise that these crowd investors would share in the profits that could arise from car sharing. “The investment and the associated interest claims are subordinate. In the event of insolvency, this means that the other creditors must first be fully satisfied before payments can be made to the crowd. In order to minimize your damage, we strive to integrate you into the continuation of the ELOOP Network,” it continues. The ELOOP Network aims to continue a blockchain project in which the tokenization of machines (e.g. wind turbines) can be implemented. The startup, founded in 2017, has recently been increasingly present on social media with this topic. The founders were most recently present at Blockchain Week in Dubai. Founder and CEO Leroy Hofer no longer describes Eloop on Linkedin as a car sharing provider, but as a provider for the “tokenization of machine RWAs”. About two months ago, co-founder Nico Prugger also announced the creation of a tokenization platform.
This tokenization platform is currently “in an advanced phase”. The first demo versions have already been presented and numerous projects are in the pipeline. Whether the platform can actually be launched ultimately depends on whether ELOOP’s intended restructuring is approved. However, demand in the area of tokenization is “high and growing rapidly.” Eloop and its investors are convinced that they can “create something new, exciting and unprecedented here.”
Eloop: Young people use third-party access data and drive through Vienna with Tesla