Unprofitable companies can only fool some of the people for some of the time. China was a small part of the problem.
Super Soco was founded and run by a very creative guy Sherman Xie who had no business acumen. He was successful in raising enough capital from Shunwei and Xiaomi to feed his ego. His fate was sealed when VMT lost interest in merging and the capital markets for unprofitable growth companies dried up.
The relationship started in 2017 in conjunction with Vmoto deciding to exit
Power Eagle , which made a line of cheap products for the Chinese consumer market, to concentrate on product distribution. A business cooperation agreement was reached with Super Soco, for Super Soco to lease a portion of Vmoto’s Nanjing manufacturing facility to manufacture the products and for Vmoto to undertake international sales and marketing of Super Soco products via its existing and expanding distribution network.
This was touted as the beginning of a potential merger.
In 2020 the rights to distribute were permanently secured in the JV manufacturing agreement, which also gave the JV the rights to permanent use of the Soco IP in exchange for giving SS five years to contribute their $5.9m equity and giving them the rights to distribute Vmoto's Emax brand through their distribution channels in China.
Having got all they needed from SS by providing a bit of finance the merger was a goner. Unfortunately Sherman Xie didn't realise this and went on to raise more Capital to build an 8,000 m2 head office and university for creative design. He figured this somehow made SS worth 3 times what VMT was worth in the merger stakes and was pissed off when Vmoto formed a relationship with Giovani Castiglioni's C Creative to relaunch the Vmoto brand and design new product lines and canned merger discussions.
When Super Soco wasn't able to pay its debts Vmt secured its position by buying the IP from the Court. It seems the soco brand together with the JV is now headed for the tip.
Going forward it looks like all the brand specific bits will be manufactured mostly by others in Nanjing and shipped out in knock down form.
The mass markets it seems will be served by local brands powered by Vmoto using the required % of local product to take advantage of Government Subsidies for as long as they last.
The Vmoto branded products using best in class motors etc will likely be assembled in Nanjing for the Chinese Markets, Brazil for the Americas, Thailand for the rest of SE Asia and dare I say possibly Italy for the EU.
That seems like the logical place for an Italian Brand.
A message from the desk of Sherman Xie.
Fortunately VMT is in the business of making a profit from selling stuff and is doing it very well.
(20min delay)
