Crowdfunding gone wrong: Customer sues Delfast for e-bike non-delivery and wins

Entertainment

A New York resident recently took electric bicycle maker Delfast to court over non-delivery of the company’s new electric bicycle model after an apparently successful crowdfunding campaign on Indiegogo failed to result in a delivery.

Crowdfunding campaigns are popular in the electric bicycle industry. While originally intended as a way to fund new projects by crowdsourcing capital in exchange for ‘perks’ or ‘rewards’, they’ve largely morphed over the last decade into de facto sales channels and PR machines.

Such crowdfunding campaigns, usually operated on sites like Kickstarter and Indiegogo, are popular in the electric bicycles industry. They’re often used as a way to pre-sell new electric bicycle models ahead of their launch.

Most crowdfunding campaigns that successfully raise funds for new e-bikes end happily, though they often tend to deliver the e-bikes later than promised. That was the case with one of my own recent Indiegogo e-bike purchases, which was slated for delivery last October but only showed up the next March.

But even if most e-bike crowdfunding campaigns usually deliver the goods, at least eventually, that’s not always the case. And after New York resident Jonathan Rapoport backed a Delfast crowdfunding campaign for the Delfast California e-bike that ultimately failed to deliver his new ride, he took the manufacturer to court.

The Delfast California electric bike that was central to the crowdfunding campaign

Electrek actually covered the news of this Indiegogo campaign’s launch back in October of 2022 (and included a disclaimer about the risks of crowdfunding). The campaign met our threshold for crowdfunding coverage of either 1) coming from an existing e-bike manufacturer – not a new startup – or 2) the company having an existing track record for successful deliveries. In this case, both of those conditions were met. Of course, neither of those ultimately guarantees future success, as Delfast demonstrated when the brand failed to deliver e-bikes after the crowdfunding campaign ended with the company successfully reaching its funding goal.

Rapoport explained to Electrek how the company initially appeared helpful, offering him a refund of his crowdfunding payment, before changing tactics and breaking off communication.

“I was promised a refund by the company and they completely ghosted me. So, I was forced to take them to court last week, and it was eye-opening,” he said. “In our court trial last week, the owner, Daniel Tonkopi, admitted that he never intended to provide anyone who backed the Indiegogo campaign with a bike. He stated under oath that ‘we simply supported his company’ and in fact did not ‘buy’ a bike, ‘We just wanted to help his company’”, Rapoport continued.

This is a common defense among crowdfunding companies that go belly-up before making deliveries, claiming that the campaign isn’t actually a legal sale, but instead a financial show of support in exchange for what Indiegogo refers to as “perks”, or deliverables.

In the case of Indiegogo though, while the company can’t legally force campaign owners to deliver those perks, their Terms of Use do require the perks to be delivered. As Indiegogo explains on its site, “Indiegogo is not able to mediate disputes between customers, including those related to refunds or the fulfillment of perks. If you are unable to arrive at a resolution, you may also use our Terms of Use in a U.S. court of law, should you choose to take any legal action against the campaign team.”

And that’s exactly what Rapoport did. In the case of Jonathan Rapoport vs Delfast, after the e-bike company’s owner Daniel Tonkopi testified in the company’s defense and both sides submitted their exhibits, the judge ultimately agreed that Delfast reneged on the deal to purchase an e-bike.

Delfast California electric bike seen in marketing photos taken before the launch of the crowdfunding campaign

As the court document describes:

“Upon review and consideration of all exhibits and oral testimony, the Court rules as follows:

Court orders judgment entered for Plaintiff Johnathan Rapoport against Defendant Delfast on the Olaintiff’s Claim filed by Jonathan Rapoport on 01/18/2024 for the principal amount of $2,198.00 and costs of $100.00 for a total of $2,298.00.

Other: Judgement for the Plaintiff based upon the testimony and exhibits admitted into evidence at the Court Trial held on May 23, 2024. The Court finds that the Plaintiff established a Breach of Contract cause of action. Here, the evidence shows that the Plaintiff purchased a Bike and cycling accessories from the Defendant in October 2022 with an expected delivery date of July 2023. The Defendent accepted and kept the Plaintiff’s money without delivering the goods. Therefore, damages in the amount of $2,198.00 plus costs are awarded to the Plaintiff. Defendant is ordered to pay Plaintiff said damages plus costs. IT IS SO ORDERED.”

Rapoport says he has not heard from Delfast yet and has not received any payment. While the money is significant, he says it’s about more than that. “What’s most upsetting is Daniel’s absolute lack of care about his customers and his belief that he will get away with this deception. He provided zero communication and took no responsibility.”

As of the time of publishing, Delfast has not responded to a request for comment.

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