Bankruptcy Alta Inevitable?!
The Alta seemed like a dream for modern motocross, for the survival of the sport in densely populated or intolerant areas. Finally an electric dirt bike that, with a few more developments, seemed ready to compete with combustion engines. A real dirt bike, not a glorified mountain bike or one of those tame motorcycles with hardly any substance.
The story of the Alta is a typical American one, started from the garage. A project that started as a hobby of founders Derek Dorresteyn and Jeff Sand, she already told us in the interview we published in February 2017. This design was started from scratch, no traditional frame and subframe on the Alta for example. The weight distribution was also an issue because such a battery weighs quite a bit. However, every problem was solved, which resulted in positive feedback on their prototype. However, the start-up company, which had previously been financed entirely from its own pocket, now needs external capital to further develop its prototype and then put it into production. The financing round is proceeding smoothly and the majority of the money is being sourced from Modara Technologies, an independent investment fund.
45 million dollars!
As is often the case with technological start-ups, there will also be a second round of financing. Because Alta is still not self-financing. The further developed prototype is what the company currently is, and development costs continue to rise. This second round of financing or Series B financing was successfully completed. Including financial input from Bob Fox, founder of Fox Racing Shox, Tesla, Modara Technologies, Cedarville Investments, Mountain Nazca and Grassy Creek Ventures. Proof that many people believed in this project. This new round of financing once again gave the company the necessary breathing space to further develop and build their first model for sale. Finally, Alta can commercially exploit their hard work.
In the meantime, Alta has grown into one of the leading brands, even before the sale of its first e-motor. With the $45 million they raised from the two rounds of financing, they have built something that should complement friend and foe. It therefore seemed that the e-motor would soon enter competition to compete with the 250cc machines. The continuous revolutions that we see in batteries also did the brand no harm. Their machine had a longer range and managed to score podiums at regional and national level.
Harley Davidson
The company from Brisbane, California is rapidly expanding a dealer network of around 70 dealers throughout the United States. Their motorcycles are selling, and that may be the biggest surprise. In 2017, their sales figures saw an explosive increase of x18. Because Alta sees their sales figures rise and the prices of batteries, among other things, fall, they can also drastically reduce the price of their motors. Which again seems to be a positive signal for both the brand and the customer. In 2017 and 2018, figures from various sources show that the brand managed to sell approximately 1400-1750 motorcycles. But new developments and costs are emerging and the company still does not have sufficient cash flow for this, "fortunately" Harley Davidson appears on the horizon at that time.
The company founded 115 years ago by William S. Harley, Arthur Davidson, Walter Davidson and William A. Davidson has repeatedly stated that the current generation likes the Harley Davidson but hates the sound. Electric is the future, CEO Matthew Levatich said. Two American companies that could strengthen each other seemed like a match made in heaven. Alta who had already proven to have the know-how, Harley Davidson who were looking for a partner with the know-how to build Electric Harley Davidsons and also had the money to support that partner in this Alta.
However, the fairy tale is short-lived. The collaboration announced on March 1, 2018 already fell apart on August 30. Harley Davidson decides to open its own Research & Development center to develop electric motorcycles in Silicon Valley. This decision immediately puts Alta against the wall and on dry seed. Because unfortunately it has to be said, Alta is a beautiful product but is still not self-sustaining and this is largely because we hear people say “2020 would have been my year, then I would have switched” or “If such an engine had competed in the World Cup I was certainly convinced that AMA had proven itself.” Being the first in a new market is simply not a gift. Last Friday, October 19, 2018, Alta fired every one of its 50 employees, with only founders David Drennan, Derek Dorresteyn, Jeff Sand and Marc Fenigstein remaining in post, according to our information.
Learnout & house pie
Because Alta has not officially filed for bankruptcy yet, they can still look for a new financier. However, if we can believe the statistics, this will only be a temporary solution. According to the financial, motor and tech world, the big switch to E-motors is expected in 2023. It is therefore hoped that Alta's technology and inventors can be included in a company like Honda (Mugen), Yamaha, Bajaj Auto (KTM Shareholder), Pierer Industrie AG that can bear Alta's relative losses and research and development costs for a few more years. This is to show off someone else's sweat in the future. Something we also saw in the bankruptcy of Lernaut and Hauspie, where their speech technology codes were acquired by Nuance Communications. They saw a turnover of no less than x12 and we saw the codes return in "Ventrilo" for the older gamers among us, but also in Office 2003, among others.
Text: Matthias Van Eeckhoven – Photos Alta: altamotors.co – Photo Harley Davidson: Harley Davidson Media
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