Unicorn had managed to flog just 350 of the $699 self-powered scooters, which have a top speed of 15mph and a range of 15 miles, despite raising $150,000 in capital.
Founder Nick Evans confirmed the failure in an email to customers, saying: “It saddens me to write this letter but we have run out of funding and are shutting down operations immediately.
"We, unfortunately, do not have the resources to deliver your Unicorns nor are we able to provide refunds, as we are completely out of funding.”
Evans attributes the dramatic failure to the ‘high proportion of revenue’ diverted to Facebook and Google advertising, together with loan repayments, which proved to be unsustainable.
The move leaves customers who ordered a scooter for Christmas in the lurch, despite having promised just four weeks ago that shipments remained on track.