Once on the Verge of Bankruptcy, Canoo Show Signs of Righting the Ship
Canoo is a goofy name for a company. Particularly one that makes a goofy looking electric van. But the market wants what the market wants. And the market wants goofy-looking vans, apparently.
Yesterday Canoo announced they’d secured a binding contract to deliver 9,300 of its “lifestyle delivery vans” to Kingbee Rentals, a Utah-based van rental company. The fact that the new deal with Kingbee is binding, is a huge win for Canoo. Despite the large numbers for some of its former deals, many of the van-maker’s contracts were only partially binding. If Kingbee is happy with the initial delivery, the deal also includes the option to double the size of the order to 9,300.
Canoo, which got its start in the L.A. area before moving its headquarters to Arkansas, the binding deal is the latest in a string of large orders that might just help the company avoid bankruptcy. Earlier this year retail giant Walmart ordered 10,000 of the same vehicle. And last week Zeeba, another fleet-as-a-service rental company, put in an order for 5,000 units. Though the deal with Zeeba was only 50% binding (2,500 vans), it still marks a considerable shift in the company's future prospects. Before the Zeeba deal only 17% of Canoo’s total potential $1 billion in contracts had been binding, according to reporting by Electrek.
Still, the startup has posted losses in excess of $100 million in Q1 and Q2 of 2022, and its latest financial guidance cast considerable doubt on the company’s ability to remain solvent. As of August 8th, executives reported that the company only had $33.8 million in cash remaining, and its stock price reached an all time low of $1.28 on October 14th.
There’s no word yet on when delivery may take place, but the company’s stock has rebounded nearly 16% since the deal was announced. Stay tuned.
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