Swedish startup Uniti in financial straits
The Swedish electric car start-up Uniti has returned with news after a long break from communication. The company has been hit hard by the pandemic. A bridging loan promised for the end of November has also been delayed – which currently threatens the company’s existence.
According to Uniti CEO Lewis Horne on LinkedIn, the company has been struggling with the effects of the pandemic and has had to reduce its team to an absolute minimum. There were negotiations with a strategic investor from China to provide bridge financing until 30 November. However, as this was delayed, Uniti now has less than a week to raise 500,000 euros. Otherwise, it would have to file for insolvency.
According to Horne, the company was hit early by the pandemic after making important progress on its prototypes. An engineering partner had ordered body parts from a company in Wuhan, but an alternative procurement was not possible for budget reasons. So the first production-state prototypes could not be built by Q2 2020.
“We courted many prospects; some went well and some failed miserably,” Horne writes of the effort. “Ultimately, this process led to us completing a production candidate which we demonstrated to our shareholders earlier in 2021.” That this prototype was not presented to the public was, according to the founder, due to the desire for a “strategically valuable partner” who could “not only bring us the capital we needed but could also solve our production challenges”.
Since May, he says, the company has focused on this unnamed investor and, for its part, has honoured an “exclusivity agreement” – that is, it has not raised any more money from other investors. “We have completed a lengthy due diligence process and we are now quite advanced in our post-merger integration, despite the deal not yet being finalized,” Horne writes.
The only thing is that the first tranche committed for the end of November has not yet arrived – according to Horne because of “restrictions on capital outflow from China”. “All the investor can do for us is to waive the exclusivity clause, allowing us to take in capital from other sources and buy enough time to complete the deal,” Horne continues. “My hope was that today I would be notifying the public that we finally have some good news. Instead, we are struggling to continue in the absence of those funds.”
Horne makes a concrete offer to potential investors: as bridge funding, he says Uniti needs €675,000, €4 million for the first demo vehicles and €60 million for a Uniti factory in China – as well as “further funds for operations and marketing from the investor’s internal budget”. An IPO is to be targeted within 12 months.
The Uniti One is a special small electric car: the driver sits in the middle, with two seats for passengers behind. Depending on the battery size, the 50 kW small car should be able to travel 150 or 300 kilometres. A price for the basic model was already known: In Sweden & Great Britain, the One was to be sold at prices starting at 17,760 euros.
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