Apr 24, 2020

This electric skate shop owner wound up with (almost) all of Boosted’s inventory ‘Boosted USA’ will sell boards, e-scooters, spare parts, and do some service, too Share this story Somewhere in the Pacific Ocean right now, there’s a boat carrying a bunch of electric scooters from China to the United States. But when they arrive they won’t be delivered to Boosted, the electric skateboard startup that designed them, because the company recently went out of business . Instead, they’ll head to a warehouse in the San Francisco Bay Area owned by Brian Schwarz, a kite surfing enthusiast who runs electric skateboard and scooter retailer Last Mile SF. As Boosted’s business came tumbling down earlier this year , Schwarz swooped in with a few investors and was able to negotiate a deal to buy up most of the startup’s remaining inventory, including its popular electric skateboards, accessories, and the rugged $1,600 Boosted Rev e-scooters, which only just started shipping late last year. He’s just launched a website called Boosted USA to sell the vehicles, spare parts, and even offer service to Boosted customers. And while he won’t be able to handle existing warranty issues, he says he plans to offer a 60-day warranty of his own on any full boards or e-scooters he sells. While scooter sharing giant Lime recently walked away with Boosted’s intellectual property and other assets, it didn’t buy the company’s hard goods. (There was also a cut-out in the deal to allow for a retailer like Schwarz to use the brand to sell off inventory.) Instead, they remained in the hands of Structural Capital, an investment firm that loaned Boosted an undisclosed amount of money last year and wound up in control of the startup’s assets when things went south. Lime got Boosted’s IP for 61 million shares of common stock, about a $15 million value After a deal to sell the flailing business to Yamaha fell through earlier this year, as The Verge previously reported , Structural Capital turned to Lime, which tried to buy Boosted’s IP in late 2019. Structural Capital eventually sold those assets to Lime in a “foreclosure sale” on March 17th for over 61 million shares of the scooter sharing company’s common stock, according to a previously unreported filing with the US Patent and Trademark Office . That’s only a small chunk of the billions of shares Lime has authorized as it raised more than $700 million over the last few years, according to data from PitchBook, but it’s the equivalent of about $15 million based on the share price offered in its most recent funding rounds. That said, Lime has struggled during the pandemic and is reportedly looking to raise new money at a much lower valuation . Related In return, Lime received Boosted’s patents, trade secrets, source code, and any other inventions (patented or not), which would likely include the seated scooter / moped that The Verge recently reported the startup was working on. Lime also got Boosted’s customer lists, and even all of the domain names the electric skateboard startup registered. But Lime didn’t buy the inventory, and so Schwarz tells The Verge he spent this past week filling up his 8,000-square-foot warehouse with Boosted’s e-scooters, backpacks, helmets, and lots of the startup’s electric skateboards — “boards on boards” that, unlike the e-scooters coming from China, he says were gathering dust in storage facilities or stuck at distribution centers. In fact, Schwarz says he’s worried the warehouse won’t be big enough to house all the inventory he bought, especially because he says Structural Capital wasn’t even sure how much there is to begin with. Grid View “It was a little confusing because they didn’t really know what they had. And I kept asking for physical counts, and they said, ‘look, we don’t have physical counts, stuff is all over the place,’” he says. “There’s so much stuff here to go through, it’s kind of ridiculous.” The glut seems to come, in part, Schwarz says, from customers who took full advantage of Boosted’s friendly 30-day return policy, which the company also made retailers respect. That means many of the boards he bought have been damaged in some form or another, or have missing parts. “Some of the boxes we’re opening, [the boards] are like brand new with batteries removed and were returned to Best Buy, and the Best Buy people must have been like, ‘yeah, totally, here’s your money back,’” Schwarz says. He also says he got most of the company’s inventory save for some that’s stuck in a few other countries Boosted operated in, and that there’s enough to sell the new boards and e-scooters while also using the damaged or incomplete ones for spare parts and service. “There’s so much stuff here to go through, it’s kind of ridiculous.” Schwarz says he was most desperate for the Rev e-scooters, despite their high price tag, since they only hit the market a few months before Boosted went under. “They were so short lived, and in my store, every day, people are coming in and being like, ‘Hey, do you have a Rev? Hey, do you have a Rev?’” he says. With the website, Schwarz joins a movement of Boosted customers and fans who have been helping each other out in the weeks after the company announced it was laying off employees and exploring a sale. In the aftermath, riders quickly spun up a crowdsourced Google Drive folder full of manuals and technical documents, while an electric skateboard shop owner started offering motor repairs. One rider is even trying to build a master list of customers whose boards are still being held by Boosted . Knowing how passionate Boosted’s customer base is, Schwarz says he is preparing to be overwhelmed. But he says he’s most concerned about the customers who sent their boards and e-scooters to Boosted for service before the company came clean about its problems. Those people are being told to email “boostedmanagement@boostedboards.com,” which is allegedly being run by the last remaining employees of Boosted. Whoever’s behind the account recently emailed those customers and told them their boards and e-scooters are in a storage facility somewhere, and that they can’t be repaired or returned until the pandemic shelter-in-place order is lifted. “We can get people back up and rolling.” “Once we turn that website on, I know my inbox is going to be flooded by thousands of Boosted customers saying they bought a board and need help with warranty support,” Schwarz says. “But we’re not going to, like, hang anybody out to dry. So I plan on getting those emails and turning right around and being like, ‘hey, Boosted is no longer, your warranty is done, but the good news is we have tons of parts and stuff here to keep you up and rolling.’ And we can service as many boards, theres no doubt in my mind, as need service that are already out there. We can get people back up and rolling, and we’ll do it at a really fair price.” Schwarz feels it’s appropriate to wind up owning the Boosted boards and accessories that were left laying around, as he was the startup’s first retailer about six years ago. Back then, he says he had to convince the company to let him sell their boards, as it was coming off of an overwhelmingly successful Kickstarter campaign and was selling directly to customers. “I kinda hassled the guys at Boosted, they weren’t really working with retailers yet, and kept saying ‘I want to open up an account, I want to open an account,’” he says. “Eventually, they were just like, ‘fine, we’ll open an account with you.’” Schwarz initially asked for just two boards, which he says the startup was “really, really angry with.” Before long, though, he was asking Boosted to send him as many as they could. “Everybody wanted one, and then it sort of built from there.”