Consumers fuming after Melbourne-based scooter start-up ‘hibernates’ Leave a comment

Melbourne software developer Justin Taylor invested about $1500 in the project’s crowdfunding campaign and had been patiently waiting for his scooter to arrive since early 2020.

“I may as well have set fire to $1500,” he said.

“I suspect I will never see the scooter.”

Mr Taylor said while he knew investing in the project was a gamble, he’d been attracted to the scooter’s speed, weight and design.

“It looked cutting edge and exciting,” he said. “It looked too good to be true.”

He’d previously invested in other Kickstarter projects and been rewarded with products including wireless chargers, power packs and music production hardware.

Mr Taylor said he’d like a breakdown of how investor funds had been spent and questioned why the company had recently told consumers their scooters would start being shipped this month.

“A week later they said we are hibernating and [Kickstarter project backers] are not getting their money back,” he said.

There has been renewed interest in e-scooters as a solution to COVID-induced traffic gridlock caused by infection-wary commuters shunning public transport in favour of cars.

While many of the Kickstarter backers were Australian, they also came from Japan and the US.

One man said he spent equivalent to two month’s of his salary on the scooter. “Very, very, very disappointed,” he wrote on the company’s Kickstarter page. Another consumer said he sold his car and was relying on the Raine scooter as his main form of transportation.

While Kickstarter backers will not receive refunds, the company will be returning funds to investors who pumped money into the company through its recent round of equity crowdfunding on Australian platform Birchal.

“We know this news is not what anyone wants to hear. But we very much feel that this is the right thing to do,” the company wrote in its business update.

Crowd Funding Institute of Australia chair Matthew Pinter said while rewards-based crowdfunding delivered many benefits to companies, such as providing them with cashflow and marketing, it could pose risks to consumers.

He said backers should question what was on offer, how it compared to existing products and whether the time frames were reasonable.

“It is a risky way to go about buying things but also a different way of buying things,” he said.

“Is this an idea that is being sold or a product that is ready for consumption? Is the chance of not getting this product worth the risk of not backing this campaign?”

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