This Is The Larry Page-Backed Electric Motorcycle Startup That Apple Might Buy

September 22nd, 2016 by Staff

(www.forbes.com)

Apple may be talking with British supercar maker McLaren to reignite its on-again, off-again automobile effort, but that’s not the only company the Cupertino, Calif. technology giant has approached in the last few months.

The iPhone maker has also conducted several meetings with Lit Motors, a San Francisco startup that has been attempting to build an enclosed electric motorcycle. According to sources close to the situation, Apple AAPL +0.89% met with Lit CEO Daniel Kim earlier this year to discuss a potential acquisition.

An Apple spokesperson did not respond a request for comment for this story. Kim declined to comment.

While Apple likely meets with dozen of companies across various industries every year, its interest in Lit shows that it may be looking for outside inspiration for its automobile undertaking, known internally as ”Titan.” Last month, The New York Times, which first detailed Apple’s interest in Lit on Wednesday, reported that dozens of employees had been laid off within the project, which was focused on developing a self-driving car to keep up with competitors such as Uber, Tesla Motors TSLA -0.56% and Alphabet , the parent company of Google GOOGL +1.02%.

Lit Motor’s vision for transportation is unlike the one of self-driving passenger cars that has been pushed by Silicon Valley’s biggest companies. Founded in 2010, the company is the brainchild of Kim, a Rhode Island School of Design graduate who sought to build a smaller, more efficient vehicle. That idea resulted in the C-1, a two-wheeled, self-balancing prototype that garnered plenty of hype in 2012 after Kim demoed the vehicle at a San Francisco startup conference.

“It takes the safety and comfort of a car and marries it with that with the romance and efficiency of a motorcycle,” Kim told FORBES in Oct. 2012.

Despite Kim’s grand vision, few investors were willing to bet on the company. In six years, Kim has raised less than $5 million–a pittance in tech startup world–with initial capital coming from friends and family. In March 2014, the company raised a $1 million seed round with a motley set of investors including Zynga founder Mark Pincus, Korean billionaire Kim Jung-Ju and professional surfer Kelly Slater. Later that year, Alphabet CEO Larry Page also put money into Lit, though its unclear how much he invested. An Alphabet spokesperson did not return a request for comment on Page’s involvement.

By the summer of 2014, Lit had more than 30 employees and contractors and attracted more than 1,100 pre-orders. When FORBES first visited Lit in 2012, Kim was confident that the company would be “quick to market” with the goal of shipping vehicles to customers by late 2014.

Two years after that date, Lit still hasn’t manufactured a single vehicle, but was still accepting pre-orders according to an April post to its Facebook page. That post prompted annoyed responses from customers, who claimed they’d been waiting to purchase their vehicles. Others lamented the fact that the company had stopped providing regular updates and worried that, like failed automotive startups such as Fisker Automotive and Aptera before it, Lit could disappear.

“Really feel discouraged,” wrote a Facebook user named Ward Tomasiak. “My deposit was one of the first 1000. Been told year after year this would be the year the c1 would be available… Maybe the concept is not achievable!”

Part of that delay could be attributed to a freak motorcycle accident that left Kim immobile for most of 2015. Following that incident, the company was put in hibernation, according to one source, with Kim eventually laying off most of the employees.

Lit’s current status is unclear. The company moved out of its former headquarters near downtown San Francisco and has said in social media posts that it is storing “decommissioned prototypes in an offsite location.” The company, however, said that it is “100% committed to bringing the C-1 to market” and is currently looking to secure a manufacturing date. The company website currently lists only five employees, besides Kim.

Despite its issues, the company does maintain key assets, including a number of international patents for its self-balancing gyroscope, motorcycle-like vehicle and collision-avoidance technology. Apple may be interested in that intellectual property as well the engineering know-how, though a deal for Lit is nowhere near certain, said a source.

Apple looks to be in a full reboot of its car program and is not looking just within Silicon Valley for help. On Wednesday, The Financial Times was first to report that the company was in talks with McLaren for a potential acquisition. Other outlets reported that other possibilities like an investment or partnership were also being tabled.


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