Seven-year-old electrical automobile startup Canoo has filed for chapter and will “stop operations instantly.” The corporate is liquidating its property in a Chapter 7 continuing within the Delaware Chapter Courtroom.
The corporate mentioned in a press launch revealed late Friday that it was “in discussions with overseas sources of capital” that proved unsuccessful, and likewise singled out an lack of ability to safe funding from the U.S. Division of Vitality’s Mortgage Program Workplace, which has been on a lending spree within the waning days of the Biden administration.
Canoo mentioned in its chapter submitting that it owes cash to fewer than 49 collectors, with excellent liabilities totaling between $10 million and $50 million. It claimed to have lower than $50,000 in property.
The chapter submitting comes just some weeks after Canoo furloughed the rest of its staff and idled its manufacturing unit in Oklahoma. The corporate struggled all through 2024 to get various of its electrical vans into the palms of potential prospects, and suffered quite a few govt departures. It had simply $700,000 within the financial institution in mid-November.
Canoo is the most recent EV startup to go bankrupt after merging with a particular goal acquisition firm (SPAC) as a shortcut to going public. Electrical Final Mile Options was the primary in June 2022. However since then, Fisker, Lordstown Motors, Proterra, Lion Electrical, and Arrival all filed for various ranges of chapter safety of their varied dwelling international locations. (Canoo purchased Arrival’s property out of insolvency in 2024, although it’s unclear if it ever put any of it to make use of.)
Canoo introduced plans to merge with a SPAC Hennessy Capital Acquisition Corp. in August 2020, and went public that following December, elevating round $600 million. Within the years because it went public, the corporate made a small variety of its bubbly electrical vans and handed them over to companions — some paying — keen to trial the automobiles. The USA Postal Service, Division of Protection, and NASA all have or had Canoo automobiles.
At one level the corporate even courted Walmart, which agreed to buy as many as 10,000 EVs from Canoo in 2022. However the deal was primarily non-binding and bore little threat for the retail large.
Canoo was based in late 2017 by a splinter group of executives that have been fed up with the drama surrounding the opposite EV startup the place they labored on the time, Faraday Future. Initially known as Evelozcity, these executives developed a modular electrical automobile platform that might energy cabins in a number of styles and sizes, and utilized superior expertise like a steer-by-wire system.
The concepts inside Canoo have been engaging sufficient that the startup at one level was in talks to with Apple, which was taken with a possible funding and even acquisition as a option to increase the tech large’s personal secretive electrical automotive challenge. Former CTO and at one level CEO of Canoo, Ulrich Kranz, went on to assist run Apple’s automotive challenge earlier than it was disbanded in 2024.
However Canoo underwent quite a few pivots after it went public and gained a brand new chairman and CEO in Tony Aquila, who had invested within the firm previous to the merger.
A serial entrepreneur, Aquila instantly refocused Canoo away from promoting to shoppers and prioritized industrial fleets. On his watch, Canoo repeatedly modified plans on whether or not it could construct its personal electrical automobiles or outsource the work. At one level Canoo introduced it was shifting its headquarters to Bentonville, Arkansas — the house of Walmart — however then by no means actually adopted by way of. As a substitute, the corporate spent years making an attempt to face up a number of manufacturing services in Oklahoma.
Aquila’s personal monetary agency appeared to profit from his submit atop the corporate. In 2023, Canoo spent double its meager income to Aquila’s agency to pay for the usage of its company jet. Canoo additionally rented workplace area from Aquila’s agency, in keeping with regulatory filings.
It was additionally Aquila’s agency that saved Canoo alive in latest months. The agency loaned Canoo a number of million {dollars} to maintain the lights on relationship again to October. These loans have been secured by a “first precedence lien and safety curiosity” on the gear situated on the Canoo’s Oklahoma Metropolis facility.
Indicators of a chapter have been effervescent up all week. Reddit customers observed that the corporate’s billboard exterior its workplace in Justin, Texas had been taken down. A number of workers who have been on furlough informed TechCrunch that they acquired official termination notices. Some individuals who had positioned $100 deposits when the corporate was nonetheless planning on promoting to common prospects had began to get refunds.
