Swedish electric motorcycle manufacturer Cake has announced the close of a $60 million Series B that the company will use to help set up manufacturing facilities in Europe, North America and Asia, as well as scale up its retail capabilities.
“We are in the process of implementing initiatives to scale the business, structuring and laying the base for rapid growth,” said Stefan Ytterborn, founder and CEO of Cake, in a statement.
Cake recently launched the Makka, an electric moped for city riding, which demonstrates a shift in direction of Cake’s product platforms. Its first two vehicles, the Kalk and the Ösa, are made for heavier duty, off-road riding and utility, so the Makka has helped to expand Cake’s user base within B2C and B2B, says Ytterborn.
The new manufacturing facilities across three continents will help Cake be more sustainable and efficient as it aims to ship its vehicles direct-to-consumer worldwide, according to the company. Until recently, the bikes were only assembled in Taiwan and shipped to warehouses in the U.S., Canada and Europe or directly to customers in Australasia. Each shipping container from Taiwan could fit 25 bikes. Now, Cake can ship enough components from Taiwan to its European or North American facilities to equal 150 bikes per container, reducing shipping volume by more than 80%, a Cake spokesperson told ProWellTech.
The European assembly has been up and running since July, and the company aims to have North American assembly begin in the first half of next year, according to the company.
“Efficiency wise we will be able to assemble an order with two weeks delivery time instead of ordering eight months beforehand, reflecting what anticipated demand will be: high inventory risk and cash flow heavy,” said the spokesperson.
With the fresh funding, Cake will also begin to set up a retail presence, with showrooms popping up in major cities beginning this fall, says Ytterborn.
“We knew we were entering a space with increasingly strong tailwinds when we got started back in 2016, but we couldn’t dream of the pace in which things are now happening, for the good of people, planet and business,” he continued.
The round consists of convertible notes of $14 million and a $46 million financing round. The latter was led by Swedish pension fund AMF, according to Cake. A handful of new investors also participated in the round, as well as existing stakeholders, Creandum and Headline, two VCs that participated in Cake’s $14 million Series A in 2019.
“Cake’s obsession with creating a superior user experience has been ingrained in the company’s DNA from day one and is something we can fully identify with,” said Staffan Helgesson, general partner at Creandum Advisor, in a statement. “We are very happy to continue to support the team for the long term in their ambition to become the category leader in the premium two wheeler electric vehicle segment.”