There are 60 Ubco 2x2 electric motorbikes in Domino's New Zealand delivery fleet. The bike maker got its foot in the door by offering the pizza chain a monthly subscription model rather than buying the 2x2s outright. Photo / Chris Keall
About 6000 customers are anxiously awaiting news from Ubco, after the Tauranga-based e-motorcycle firm went into receivership on Friday.
Twining Valley Nurseries owner Andrew Bowman, who bought two of Ubco’s 2x2 Generation 5 Work Bikes for his Waikato business, says he learned about the firm’s collapse from the Herald.
He had yet to hear from the receivers as of midday Monday. And on Ubco’s website, it was business as usual, with no mention of the receivership.
“It’s a bit concerning, especially since I decided to back a Kiwi firm and invest $16,000 on a couple of their machines for off-road use around our nursery.”
Like another customer, Auckland digital strategy and artificial intelligence (AI) consultant Jeremy Hall, Bowman was keen to hear any update on servicing and access to spare parts, including replacement batteries for the electric bikes. The batteries are rated to last for 800 full discharge cycles, according to Ubco’s website.
Both men remained fans of Ubco and hoped a buyer would emerge.
Hall bought a fifth-generation adventure bike. “Mostly for commuting around town. It’s a pleasure to ride,” he said.
Both bought their Ubcos in 2022 and so far had had no major issues.
Receivers Stephen Keen and David Ruscoe, of Grant Thornton, released a brief statement on Friday saying: “As there is no funding available, the receivers have ceased to trade the business of the companies and all employees have been terminated with immediate effect.”
The pair said the immediate trigger was two general security agreements (debt secured by assets). They will seek to sell the business and are looking for expressions of interest.
Keen and Ruscoe said they were exploring options including the sale of the business, or the sale of stock or intellectual property.
No details about debts or creditors have been released so far.
Ubco had $19.5 million in revenue in the 2024 financial year, according to a Technology Investment Network (Tin) estimate.
According to LinkedIn Insights, Ubco had 82 staff ahead of Friday’s receivership, down from 109 this time last year.
The Herald asked Crown agency Callaghan Innovation if the failed e-motorcycle maker owned it any money.
“Ubco received a Callaghan Innovation R&D Loan scheme repayable grant of $400,000,” a spokesman said.
“We were in communication with Ubco over repayment arrangements prior to its receivership.”
The spokesman added, “Our core purpose is to support and promote the development of early-stage, high-risk and R&D-intensive businesses. This means that some of these companies will fail, while others will go on to help create the high-wage jobs.”
The receivers did not immediately respond to questions as they began their initial fact-finding.
In August last year, Ubco inked a marquee contract with Australia Post for 175 of its new “Duty” e-motorcycles, with potential for a wider rollout to more of its 10,000 posties. It also began a smaller trial with NZ Post about the same time.
A former employee who posted to Facebook and then subsequently identified himself to the Herald said he was part of what he described as layoffs involving about 40% of staff in 2022 after a capital raising fell short.
He was in touch with current staff (or ex-staff as of Friday) who told him that there were plans for a small number of employees to join an entity that would manage the postal contracts.
Like Mark Phillips, the ex-managing director of Ubco’s Australian operation, he blamed problems at the firm on what had become, in his view, a management-heavy culture, and work on two models – a dirt bike and a quad bike – that never eventuated, despite years of development work.
The firm had sold more than 6000 of its bikes worldwide, Ubco chief executive Oliver Hutaff told the Herald in August. He said a major capital raise was in the works – which never eventuated before Friday’s receivership.
Phillips, who was with the company from March 2020 to September 2022, blamed the collapse, in part, on squeamishness about pursuing defence opportunities after a trade show.
“I can’t say we would have won it. But in my opinion, it was a ludicrous decision that pointed at wider issues in the way the company was going.”
Phillips also claimed Ubco had tried to expand globally too far and too fast, in his opinion. It had become top-heavy with managers, in his view.
He criticised the early 2020s move from local to China manufacturing.
He said the firm should have concentrated on its core model – “say, to a faster road bike” alongside the 50km/h moped. Instead, it spent years working on a trail bike and a quad bike, neither of which made it to market.
“There are hundreds of boxes of bikes in warehouses in Australia and New Zealand that are defunct and not for sale because of issues with them,” Phillips said.
Ubco board members have been approached for comment and then-Ubco chief executive Timothy Allan told the Herald a quad bike was on the way after his firm raised $14 million in 2021, in part to fund new product development. The model was never released.
Ubco had a rolling maul of overlapping capital raises, making it tricky to ascertain exactly how much it had raised. In January 2023, it said it had raised a further $35m.
At the time of Ubco’s receivership, its single largest shareholder was its Taiwanese manufacturing partner TPK – a multibillion-dollar firm that took an Ubco stake in 2021.
According to the Companies Office, TPK owned 40% between a direct stake and a holding by its investment arm.
The second-largest shareholder was Auckland-based venture capital firm Global From Day One (GD1), with a 21% shareholding built across several investment rounds.
Other shareholders included individual investors who participated in several raises through crowdfunded equity platform Snowball Effect, which had a 4% holding on behalf of its members.
In 2021, Snowball offered its members shares, with a minimum $5000 parcel, as Ubco sought to raise up to US$15m ($26.8m) through the platform. The effort pulled in just over US$3m.
The rich-list Tindall, Mafsen and Holdsworth families also had small stakes.
Ubco also talked up plans for a possible listing in the United States or on the Australian Securities Exchange, but the plans came to nothing as the market for tech IPOs hit a rough patch post-pandemic.
The Australia Post deal announced in August was for 175 e-motorcycles. Ubco also had a smaller trial with NZ Post and a monthly subscription pilot with Domino’s Pizza that saw the chain use its two-wheelers for deliveries from some stores.
“Ongoing discussions are being held with NZ Post with a view to fleet expansion subject to the success of the pilot,” Ubco chief executive Oliver Hutaff told the Herald then.
“While we cannot specifically comment on the Paxster phase-out, we welcome any discussion NZ Post would like to have on this to see where our bike could be used to replace some of the postal deliveries the [400] Paxsters serviced.”
Ubco, founded by Allan, Daryl Neal and Anthony Clyde, first made a splash when it hit Fieldays in 2015 with its first model, an all-electric utility bike that appealed to farmers because its almost silent running was animal-friendly and the engine, with almost no moving parts, meant no running costs. It helped, too, that the removable battery could also be used to recharge power tools.
The lack of noise also drew conservation and tourism clients. But with a top speed of 35km/h, it was too slow for roads.
Faster, road-capable urban models have since been released – but durability and practicality from its rural roots remain one of the Kiwi company’s key points of difference in a crowded market. More recently, it has added cloud-based fleet management software.
The bikes are designed in Mount Maunganui and contract-manufactured in China and Taiwan.
In recent years, it faced dozens of new competitors, from established motorcycle makers moving into electric models to other start-ups who have designed locally and contract-manufactured overseas.
Ubco’s collapse continues a bad 12 months for New Zealand hardware tech.
Hamilton hydroil aquabike maker Manta5 collapsed in May last year, while SolarZero was placed in liquidation in November.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
The Reserve Bank says no new information was disclosed in the speech.