If they had like, $27 million in funding (plus a bit more cash reserves) in June 2017, and they were selling 1000 bikes a year, their cash would have run out in a year or so anyways, and there is no way they could have scaled production up fast enough to become cash flow positive before that cash ran out. Cost of labor is usually 40-50% of your total fixed costs in manufacturing after all.Ĭynically speaking, I'd argue that Alta could have never survived with their funding levels and burn rate. Their total expenses must be so large that $27 million can't be more than a year of operations. 100 employees at $120k cost per employee is $12 million a year. Looking at the numbers afterwards, it seems like Alta just had a crazy high burn rate that they couldn't possibly sustain. So it sounds like the Harley deal hasn't closed yet, Alta management used the proposed deal to borrow money, and when the deal falls through, the loans are due and Alta doesn't have the money? If that story is true, that just sounds like utterly insane management. So why buy a failing electric dirt bike business when you can just buy the important parts? Buying the whole company means taking on those obligations. Alta had a dealer network and customers with warranty obligations.
If their yearly sales were what, 1000 bikes a year, at $10k a bike, that's $10 million in revenue, with $27 million in investor funding, they don't look close to being able to sustain a company with 100+ employees doing manufacturing.Īs for why did bombardier only purchase bits and pieces of Alta? That's simple. Yeah, no, that's not nearly enough to sustain a manufacturing company like Alta.
#ELECTRIC ALTA DIRT BIKE SERIES#
Ryan said "if they never struggled to raise funds", but is that true? In 2017, the company only raised $27 million in their series C round. Harley investigated the state of the company, figured they were in deep shit, and walked away from the deal. So what looks like a lot more reasonable is that Alta was trying to court investors like Harley Davidson, but their finances were actually horrible and they were bleeding cash. Alta went out of business 2 months later in October 2018. Probably paying a hefty chunk of change in the process too. They were looking to only purchase a stake in Alta: This was in March 2018.Ħ months later (August 2018), Harley backed out of the investment plan. All the news that I found was that Harley bought a stake in Alta.
#ELECTRIC ALTA DIRT BIKE FULL#
Harley never went for a full acquisition. It doesn't line up with the information that is available. Showing off Bikes or Gear? Click Here Looking for purchase advice? Click Here
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