Mission Motors, whose sleek electric bikes drew comparisons to Tesla’s cars, ceased operations in May after losing some of its top engineering talent to Apple, according to sources close to Mission.
Although it has never openly acknowledged it is looking into building an electric car, Apple has recruited dozens of auto experts, many from car makers like Ford or Mercedes-Benz, which shrugged off the departures.
As tech giants vie to define the future of personal transportation, dangling higher salaries and a more secure future, the defections can be devastating for startups, industry insiders said.
Some close to Mission Motors said it had reached a point of no return by last fall, when departures to Apple, and other companies, accelerated after a long struggle to find funding and a sound business model.
But former Chief Executive Derek Kaufman thinks the company could have carried on if it had not lost key employees, undermining efforts to raise funding.
“Mission had a great group of engineers, specifically electric drive expertise,” Kaufman said. “Apple knew that – they wanted it, and they went and got it.”
A spokesman for Apple declined to comment for this story.
Kaufman said Apple recruiters began circling Mission as it was trying to raise a crucial round of funding last autumn.
An investor who had committed to the round backed out after two key engineers joined Apple, he said, and more employees followed in the coming months.
San Francisco-based Mission is not the first to run up against Apple’s auto ambitions. Tesla Motors Inc CEO Elon Musk has publicly chided the iPhone maker for trying to poach engineers.
In February, electric-car battery maker A123 Systems sued Apple for recruiting some of its top engineers, claiming it had been forced to abandon key projects. A123 and Apple later settled on undisclosed terms.
With a research and development team of several hundred, A123 could weather the departures, CEO Jason Forcier said. But a small startup could be crippled, he noted.
“The competition for engineers is as stiff as I’ve ever seen it, and I’ve been in this game for 25 years now,” he said.
That was illustrated earlier this year when ride-hailing app Uber snatched as many as 50 people away from Carnegie Mellon University’s robotics lab, according to media reports, to help it build a self-driving car.
And amid tepid interest from investors in clean tech, startups rarely raise the money they need to compete, Forcier said.
“We put $1 billion into A123,” he said. “Startups get $10 million to $20 million – it’s nothing.”
Mission raised about $14 million, according to investment database CrunchBase.
Scot Harden, a vice president at electric bike maker Zero Motorcycles, said his company has not suffered any defections to Apple thanks to a stable base of investors.
“You have to have investors behind you who really see that future,” he said.