CAKE, the Swedish electric motorcycle maker known for its eye-catching designs, is reportedly filing for bankruptcy after failing to raise enough funding to keep operations afloat.

Swedish media has reported that CAKE’s board is submitting a bankruptcy application. There has been no announcement from the company itself, which as recently as last week was still making press announcements including about further European expansions.

CAKE had also just begun delivering its newest electric motorcycle model, the CAKE Bukk.

There were signs of trouble at CAKE however, including a reported suspension of salary payments last week.

The latest bankruptcy filing news comes as the company appears to have failed to find the necessary follow-on funding in a C round that would have pushed towards higher volume production and profitability.

CAKE founder and CEO Stefan Ytterborn was quoted in Swedish media attributing the financial struggles to factors ranging from internal issues to the global financial climate.

“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 has confirmed to Electrek that CAKE was forced to file for bankruptcy on February 1 of this year after a lead investor jumped ship shortly before the most recent funding round was due to close.

The majority of the company is owned by just a few key individuals and funds:

• AMF, Swedish pension company: 11.3%.
• Stefan Ytterborn, founder of Cake: 10.4%.
• Creandum, Swedish venture capital company: 10.4%.
• Back In Black Capital, the Lundin family’s investment company: 9.3%.
• Headline, American venture capital company: 9.2%.
• Rutger Arnhult, property profile: 6.4%.

CAKE has seen multiple large funding rounds over the last few years but appears to have not achieved sufficient annual motorcycle production volume to achieve profitability.

The company also reportedly had as many as six different classes of shares with newer investors receiving lower priority to dividends, further disincentivizing follow-on funding from new parties.

It’s been a tough year or two for many electric motorcycle companies, with SONDORS appearing to enter a messy tailspin and Arcimoto having its own share of financial troubles. Electric bicycle companies have also been hurting as sales haven’t maintained the same rapid growth that buoyed the industry coming out of the pandemic years.

But it’s not all bad news. New electric motorcycle companies with apparently healthy financial books and production outlooks have sprung up as well, launching new models and pushing the industry forward.

Established motorcycle companies such as Harley-Davidson and Kawasaki have also pushed further into the electric motorcycle space, bringing increased stability and financial backing to the industry.