Due to market skepticism regarding startups’ prospects, the company has substantially lost value.
When Zapp’s top executives huddled around one of the company’s electric mopeds in May and gazed up at a billboard near Times Square in New York, the future of the British brand appeared bright. They raised their arms to celebrate the six-year-old company’s $573 million (£467 million) listing on the Nasdaq stock exchange. A different billboard said, “Simply Electric.” No giving in. Zapp posted on social media, saying, “We’re all fired up and ready for the next chapter! Live a disconnected life.
After six months, the stock has plummeted and, according to the Nasdaq, has a market cap of $12.5 million. Zapp appears destined to follow a number of British automakers whose US listings have become investors’ short-term parking lots.
While the market for electric cars has grown, a plethora of startups have emerged as a result of the technically challenging task of producing quick, small, and reasonably priced green motorbikes and scooters.
Renowned brands, who have traditionally viewed mopeds as low-margin items, have been hesitant to enter the market while prices are still high. However, globally, it is anticipated to hold 30% of the two-wheeler market by the end of the decade, with the consulting firm McKinsey estimating its worth to be over $200 billion.
Through a merger with CIIG Capital Partners II, a special purpose acquisition company (SPAC) that buys businesses, Zapp was able to achieve listing. These companies are sometimes referred to as “blank cheque” companies. It claimed that its growth in the “highly fragmented two-wheeler category” would be accelerated by the listing.
Swin Chatsuwan, a dealmaker in the retail, hotel, and automotive industries, founded Zapp in 2017. Jeremy North, one of his team members, handled the numbers at British engineer Dearman engine, and Tony Posawatz, a former General Motors executive.
Among the people Chatsuwan started reaching out to for money was blockchain entrepreneur Cameron Parry, whose company First Equity contributed to the company’s 2018 seed round of funding. By the end of the next year, Zapp promised to start shipping its first product, the seated scooter i300. After that, he started thinking about going public, possibly even listing on the London Aquis exchange, but Covid sent a chill down the spine of the stock market, which further pushed back production schedules.
The i300, a “high-performance city bike capable of motorcycle levels of performance,” made its official debut in 2022 at the Goodwood Festival of Speed and went on sale. With a 2.3-second 0–30 mph acceleration time and standard wall plug charging, Zapp aims to capture the market for smart urban transportation in crowded cities.
The four-model moped ranges in price from €7,590 (£6,650) to €9,590 (£8,400). Customization options include “diamond cut wheels” and a greyscale union jack livery. Orders for the moped can be placed online. While the BMW CE 04 retails for almost £13,000, many competitors, such as the Piaggio 1 and the Sunra Robo, range in price from £2,000 to £3,500.
“They are highly costly,” a person with knowledge of Zapp said. “Swin seems to be the scooter equivalent of Steve Jobs.” He sees things that you are unable to comprehend. He exhibits some self-importance. Future Zapp models will be more compact and reasonably priced.
Serious competition hasn’t helped either, especially from Chinese businesses. According to Patrick Hertzke of McKinsey, “we are seeing a wave of Asian players bringing new electric scooters and mopeds to EU and UK markets.” “A few are emerging as semi-premium brands with flagship stores and cutting edge connectivity features, while others are very cheap with poor quality reputations.
“The e-scooter industry will continue to see growth from these new entrants, but some brands are finding it difficult to find efficient distribution and sales channels.”
“Zapp continues its efforts to bring to market its first product, the award-winning i300 electric urban motorcycle, which we believe will set new sector standards in design, performance, sustainability, and customer experience,” a Zapp spokesperson said, despite the difficulties of becoming a Nasdaq-listed company when and how it did. Zapp aims to become a major player in the rapidly expanding global electric two-wheel market, building on its British foundations.
In an interview, Chatsuwan once stated, “If you have a dream, pursue it and surround yourself with the right people.” And don’t listen to the doubters; don’t let anyone talk you out of your dreams. These friends might come in handy at this difficult time.