After a pandemic yr that spurred large demand for its e-bikes, Rad Power Bikes is elevating a $150 million round to gasoline its development.
It’s the most important funding in an e-bike model and displays investor confidence in a worldwide electrical bike market anticipated to practically double in measurement to $70 billion by 2027.
Rad beforehand solely raised simply over $25 million. The new round contains big-name buyers akin to Counterpoint Global (Morgan Stanley), Fidelity Management & Research Company, The Rise Fund, the worldwide influence investing platform managed by TPG Capital, and funds and accounts suggested by T. Rowe Price Associates, Inc. Previous backers together with Durable Capital Partners and Vulcan Capital additionally participated.
Rad is worthwhile and rising. Asked why the corporate wanted to increase such a big round — which is described as a “minority investment” — CEO Mike Radenbaugh mentioned the corporate desires to “democratize the electric bike.”
“We were needing to step up to the plate,” he mentioned.
Rad payments itself as the most important e-bike model in North America. The recent money can be used to assist develop its world footprint, which already contains three showrooms and 11 service stations. The firm additionally plans to double its 325-person headcount this yr.
Rad has a group of 200,000 riders across greater than 30 international locations. It additionally sells to greater than 1,000 business prospects, together with nationwide pizza chains, meals supply corporations, rental fleets, tech corporations (to be used on their campuses), and extra.
Interest in bikes surged because the pandemic hit and other people seemed for brand spanking new methods to journey and train. Rad noticed gross sales spike practically 300% year-over-year in April. It delivered a report variety of bikes in 2020, although the corporate additionally had hassle fulfilling some orders as demand outpaced expectations.
“We did experience challenges, but overall the team is really proud of the number of people we got into the Rad Power Bikes family,” Radenbaugh mentioned.
The startup has taken benefit of the direct-to-consumer mannequin to shorten its provide chain, bypass conventional bike retailers, and create a good suggestions loop with prospects to continuously enhance its line of 11 e-bike fashions that promote for round $1,500.
It faces competitors from a variety of different e-bike makers together with Priority, Trek, Aventon, Blix, Biktrix, Specialized, and the Electric Bike Company, amongst others.
Beyond the pandemic, Radenbaugh mentioned Rad is seeing different tailwinds akin to authorities assist of protected mobility choices, akin to closing down streets for bikes and strolling site visitors. He added that e-bikes are a “resilient form of transportation.”
“They’re very accessible,” he mentioned.
Rapid innovation in expertise — batteries, motors, controls, manufacturing capabilities for electrical bikes — has additionally created an ideal storm for Rad. The ubiquity of the transportation possibility helps, too, with hundreds of shareable electrical bikes from corporations akin to Lime which might be simply accessible and might lead prospects to examine proudly owning their very own.
The e-bike business does face some vulnerabilities. Electric bike and scooter imports had been hit with a 25% tariff in 2018 because of President Donald Trump’s commerce conflict with China, although e-bikes had been excluded from the rule in 2020. And the associated electrical bike-sharing business, although closely funded, stays untested. Bike-sharing startups within the U.S. and China have contended with layoffs, a shifting panorama, and in a number of circumstances shut down altogether.
Rad’s different buyers embrace Blue Nile and Zulily co-founders Darrell Cavens and Mark Vadon, who made an undisclosed funding in 2019.
“Addressing last mile delivery and short duration travel is critical to decarbonizing transport,” Marc Mezvinsky, business unit companion at TPG, mentioned in an announcement. “Rad Power Bikes has created a premium quality, reliable, and fun solution that improves mobility, reduces greenhouse gas emitting vehicle usage, and encourages healthier living through outdoor activity and exercise.”