Damon Update After Its IPO

A few days back, we told you that BC-based battery bike manufacturer Damon Motors was now listed on the Nasdaq exchange, for anyone in the public to buy stock. Since then, Damon’s stock price has settled well below the $12 target (see current price here), and now we have an update from the company detailing their roadmap to production. Again.

You can read Damon’s full press release here, but the important details are below:

PRODUCTION ROADMAP

Subject to securing adequate funding, the Company intends to transition from development to production as follows:

• Late-Stage Engineering (2024–2025): Finalize mechanical and electrical systems, complete battery system development, and validate all key components.
• Pre-Production (Target Completion: Q4 2025): Build and test pre-production prototypes to validate designs, regulatory compliance, and tooling readiness.
• Production and Commercialization (Target Start: 2026): Establish a manufacturing facility in its current HQ in San Rafael, California, and commence production, subject to capital availability and successful completion of all regulatory requirements

Further down in the PR, we’re told:

Currently with 15 in-house engineers, we are leveraging a combination of our employees alongside key subcontractors and external experts to advance development. Late-stage engineering is mostly complete, with vehicle mechanics 90% finalized. Power electronics are also 90% complete, with ongoing validation and the integration of key features. Similarly, mechanical and cooling systems are 90% complete, while the battery system is 70% complete, with efforts focused on the development of the cell interconnect system.

Considering their original plan was to start production in late 2022, the fact that the design is still not completed in late 2024, with production now off into 2026, investors and those who placed pre-orders would certainly have cause for concerns.

Damon addresses those concerns with these words:

What Led Us Here

In the spring of 2022, Damon successfully raised a US$26M Series B financing, which marked the beginning of our efforts to raise a Series C round with the assistance of two major banks. This funding was intended to kickstart production. However, following the volatile SPAC era, the financial landscape shifted dramatically. The bursting of this bubble led to a severe downturn in the markets, and our efforts to secure a Series C production financing were unsuccessful. Despite these circumstances, the company was able to bridge itself with the support of various investors – enough to cover essential costs, having significantly reduced expenses across the board.

Navigating Funding Challenges

Since early 2022, inflation rates grew to reach 40-year highs, the highest level since 1981. Simultaneously. interest rates reached 20-year highs, rocking the financial markets and virtually wiping out risk capital for private companies, especially for pre-revenue startups in the capital-intensive automotive sector. Because of this, pre-revenue electric vehicle company valuations fell by an average 85%, and very few survived. Damon is an anomaly that persevered, despite how little risk capital had been available to fund the company’s path to production. As previously noted, the company had undertaken multiple cost-cutting measures across all areas to navigate through these challenging past two years. These necessary reductions have regrettably led to significant delays. The journey has been far from easy, but these tough decisions were essential to ensure our continued operation and future success.

Whatever your feelings are on this company, it seems one thing is for sure—the story is not over.