Star Wars inspired hoverbike startup files for bankruptcy

ALI Technologies, the Japanese startup known for developing hoverbikes inspired by Star Wars, has filed for bankruptcy.

Founded in 2016, ALI Technologies initially gained recognition for its development of compact drones. However, it later diversified its portfolio, venturing into the development of its hoverbike, the Xturismo.

The Xturismo hoverbike is a 660-pound electric bike, 12 feet in length, with a maximum speed of 50 miles per hour with a range of 40 miles and able to hover 8 metres off the ground. It was designed as a single-rider vehicle that leveraged drone technology to hover and manoeuvre above the ground. The bike went on sale in 2021 at $680,000 (£534,000).

According to a report conducted by credit research firm Tokyo Shoko Research, the startup has filed for bankruptcy with ¥1.17 billion of debt. In the first half of the month, bankruptcy proceedings against ALI Technologies began at the Tokyo District Court, with the startup having originally filed for bankruptcy on December 27th.

The bike, whilst it launched to a lot of hype, failed to sell. Whether it was the hefty price tag, or the fact that it was a requirement for riders to have a pilot's license in many jurisdictions, the product failed to be a hit.

Efforts to salvage the company included a focus on the Middle East market, in particular, a potential deal to supply 20 hoverbikes to a state-run company in the United Arab Emirates. Unfortunately, this deal did not materialise, further exacerbating the company's financial difficulties.

The financial struggles of ALI Technologies were intensified by its merger with a special-purpose acquisition company. ALI Technologies consented to an acquisition by Pono Capital Corp, a US-based firm. This strategic decision resulted in the listing of its shares on the Nasdaq stock exchange, a manoeuvre aimed at bolstering its financial standing.

Whilst this was meant to strengthen the startup’s financial standing, this merger saw approximately 99% of Aerwins’s SPAC investors redeem their shares shortly after the initial public offering, leading to a nearly 90% drop in the company’s stock value within a month pushing the company further into insolvency. By the end of December 2022, ALI Technologies' liabilities were around ¥1.2 billion ($8.3 million), with an annual net loss of about ¥2 billion.

In response to these challenges, ALI's American parent company, Aerwins Technologies, announced plans to relocate operations from Tokyo to California. This relocation aimed to focus on redesigning the hoverbike and seeking regulatory certification in the United States. In December 2023, ALI Technologies formed a partnership with another US firm to help advance its plans and ceased operations in Japan. The company expressed hopes of offering the new vehicle at a $200,000 price point, a significant reduction from its initial price of $680,000.

The story of ALI Technologies serves as a cautionary tale for technology companies in the urban transportation innovation space. Despite growing interest and investment in flying vehicles, regulatory hurdles and financial viability remain significant challenges.