Most Funded Electric Bike Company In The World
Rad Power Bikes™, North America’s largest e-bike company, announced $154 million in funding from existing investors to supercharge its global efforts to get more people out of cars and onto electric bikes.
E-Bikes are basically a modernised version of what was already available years ago. The original electric scooter was a motorised scooter with one wheel, but the e-bikes of today have two or even three wheels and they often have four wheels. The difference between a scooter, moped, and e-bikes is in their operational requirements, prices, styles, benefits, etc. The main difference is that an e-bikes main purpose is to act as a bicycle, where a scooter is primarily used for traveling short distances. You can use the e-bikes for longer distance travel, but it would probably be at a slower rate than you could do on a standard bicycle, without the motorisation.
This funding round is led by Fidelity Management & Research Company LLC, with investments from funds and accounts advised by T. Rowe Price Associates, Inc., Counterpoint Global (Morgan Stanley), Vulcan Capital, Durable Capital Partners LP, and The Rise Fund, TPG’s multi-sector global impact investing strategy. The funding will be used to boost investments in product and technology innovation, accelerate the company’s omni-channel sales and support channels, and diversify manufacturing and supply chains, including investments in North American and European production.
The global e-bike market is estimated to account for 56,212.3 Mn in terms of value by the end of 2028, says Coherent Market Insights.
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The launch of e-bikes is expected to propel the growth of the global e-bike market over the forecast period. For instance, in August 2021, Harley-Davidson launched Seria 1 e-bikes in Europe and the US.
Moreover, R&D in light electric vehicles to address climate change is also expected to aid in the growth of the market. For instance, in September 2021, LEVA-EU, a non-profit organization, commissioned research from the German Aerospace Centre to examine the potential of light electric vehicles to address climate change.
The emergence of Covid-19 is expected to boost demand for electric bikes, thereby offering lucrative growth opportunities for players in the global e-bike market. Post pandemic, the value of sustainable and cost-efficient vehicles has risen with the demand for social distancing and the never-ending need to commute.
For instance, in August 2021, the Royal Society for the Prevention of Accidents and See. Sense, a cycling technology company, with funding from Department for Transport, conducted new research to enhance the safety of cyclists.
The global e-bike market is witnessing an increasing sale of electric bikes. For instance, Giant recorded sales of 29,000 electric bikes in the first half of 2019 and the company was expecting to sell another 310,000 electric bikes by the end of 2019.
Europe is expected to witness significant growth in the global e-bike market with high demand for bikes. For instance, in July 2021, a research, conducted by Opinium, reported that 39% of adults in the U.K are planning a summer staycation in 2021. Of those planning a trip, 44% said that they or someone in their party will be taking or hiring a bike whilst on the trip, most notably their partners (28%) or children (15%). The report thus estimates 12.4 million bikes being used on staycations across the UK in the summer of 2021.
Major players operating in the global e-bike market are focused on launching new products to expand their product portfolio. For instance, in October 2021, Dott launched its new e-bikes, with the first vehicles now available on the streets of Paris. The company plans to operate 3,000 e-bikes in the city by the end of 2021 and expand its presence in Rome, Milan, Brussels, and London.
Similarly, in August 2020, Delfast launched a new Delfast Cross Dirt electric bike with a top speed of 80 km/h (50 mph) and a 3,000W continuous, 5,000W peak-rated rear hub motor.
“I built my first e-bike in my garage 15 years ago. Since then I’ve been on a mission to get as many people on e-bikes as possible because of the countless ways they improve people’s lives,” said Mike Radenbaugh, CEO and Founder, Rad Power Bikes. “We believe in practical and utilitarian e-bikes for the masses, which has led us to create entirely new categories of e-bikes and drives our accessible pricing, inclusive product design, and industry-pioneering direct-to-consumer sales and service. This record-breaking investment from some of the world’s most respected late-stage investors accelerates our efforts to redefine transportation and mobility, offering car-replacement solutions to people from all walks of life that are energy-efficient, enjoyable, and accessible.”
“We believe that as an industry leader, Rad Power Bikes has a compelling market opportunity to fulfill the potential of e-bikes as an effective transportation and mobility solution globally,” said Andrew Davis, Director of Private Investments at T. Rowe Price. “In our view, they have the management team, technology strength, and operational expertise to succeed over the long term and to play an important role in addressing the world’s current and future climate challenges.”
Ebikes are critical to addressing the global climate crisis as gas-powered transportation is the largest contributor to carbon emissions in the U.S. There are an estimated 250 million cars on U.S. roads, with 59 percent of car trips being five miles or less.1 The EPA estimates that if everyone in the U.S. ditched their cars for just half of their trips under one mile there’d be savings of 2 million metric tons of CO2 per year — the equivalent to taking 400,000 cars off the road.2 Rad Power Bikes travel up to 45 miles or more on a single charge, allowing riders to replace much longer trips and take an even bigger bite out of carbon emissions. In addition to greatly reducing emissions, e-bikes get people moving, improving their mental and physical health. Studies show that people who regularly commute by bike have a lower risk of death associated with cardiovascular disease or cancer, according to the British Medical Journal3; notably, a recent study found that e-bike riders saw increased health benefits by riding more often and for longer than traditional bike riders.4
“Replacing cars requires innovative solutions. We obsess over our customers and how our bikes and accessories can best fit into their daily lives and replace car trips. From teens and professionals commuting to school and work, to parents running errands and dropping kids off at school, to retirees discovering the joy of riding again with loved ones, and even our commercial last-mile customers delivering groceries in busy city streets,” said Radenbaugh. “People worldwide are turning to e-bikes over cars, getting exercise and enjoying their commute rather than dreading it — all while feeling great about reducing their emissions.”
This investment brings total financing transactions since the inception of the company to over $329 million, the most funding for a direct-to-consumer e-bike company to date.
J.P. Morgan acted as sole placement agent on the transaction.
1. National Household Travel Survey
2. Environmental Protection Agency
3. British Medical Journal
4. Transportation Research Interdisciplinary Perspectives
5. Rad Power Bikes Press Release
6. Coherent Market Insights Press Release
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