Delfast is a Ukrainian company with offices and production in both Ukraine and the USA. It has been operating for many years and is one of the most recognized in the global electric bike market. One of its models also holds the Guinness World Record for the longest distance traveled on a single charge.

What happened

Crowdfunding campaigns are popular in the e-bike and various small electronics industries. Originally conceived as a way to crowdsource new projects in exchange for discounts or rewards, over the last decade they have largely evolved into de facto sales channels and PR machines. People pay the brand upfront, and once the required amount is raised, production begins. Everyone who pays gets their product at the discounted price they’ve already quoted, and for everyone else, it costs a little more in the future if the company continues production.

Collections of coins for the release of this or that novelty are usually kept on the following sites: Beginning And Indiegogo. They are often used as a way to pre-sell new e-bike models before they are released.

Most crowdfunding campaigns that successfully raise funds for new e-bikes end happily, although they often arrive later than promised.

But this time a New York resident Jonathan Rapoport backs Delfast’s crowdfunding campaign for Delfast California e-bikebut he could not get it either early or late, so he filed a lawsuit.

Delfast California electric bike in marketing photos / Delfast photo

Details of the dispute

Jonathan Rapoport said the company was initially kind and offered him a refund, but then changed tactics and stopped contacting him.

The company promised me a refund but they completely lied to me. I had to sue them last week and it was a revelation to me.
He said that during the lawsuit, CEO Daniel Tonkopi allegedly admitted that the company had no intention of giving the bike away to anyone who backed the Indiegogo campaign.

“When he swore, he said we were only supporting his company and that we did not actually buy the bike. We just wanted to help his company,” the plaintiff continued.

In fact, you can often hear a similar attitude from brands that have used crowdfunding but have not been successful with a product. Legally, a crowdfunding campaign is not actually a legal sale, but rather a financial expression of support. In exchange for what Indiegogo calls “benefits,” or results.

Delfast California electric bike in marketing photos / Delfast photo

In Indiegogo’s case, while the company can’t legally force campaigners to provide these benefits to their payers, its Terms of Service do require them to be provided. As the crowdfunding resource explains on its website, “Indiegogo cannot mediate disputes between customers, including those related to refunds or the fulfillment of incentives. If you can’t reach an agreement, you can also use our Terms of Service in a U.S. court if you decide to file a lawsuit against the campaign team.”

That’s exactly what Rapoport did.

Judgment

In the case of Jonathan Rapoport v Delfast, after CEO Daniel Tonkopi testified in defence of the company and both sides presented their evidence, The judge ultimately ruled that Delfast had broken the agreement to purchase the e-bike..

The court document states: “The Court hereby orders that judgment be entered in favor of Plaintiff Jonathan Rapoport against Defendant Delfast in the action brought by. […] for the principal amount $2,198 and $100 in court costs, for a total of $2,298.”

Rapoport said he has not yet heard from Delfast or received any payment.