The gist: Rad Power Bikes just raised $154 million to fuel growth of its e-bike business. The round comes after a separate $150 million cash infusion raised in February. Rad continues to see big demand, spurred in part due to the pandemic as more people bought e-bikes. The company has more than 350,000 riders across 30 countries, and expects to add 100,000 riders in the second half of 2021.
The take: Seattle-based Rad had already established itself as the largest e-bike brand in North America, and reported $100 million in revenue for 2019. That number has surely risen — Rad did not provide an updated metric — and the fresh cash will help Rad triple the number of physical locations by the end of next year (it currently has 20 service stations and five retail stores). The company had 325 employees as of February; its headcount is now 625.
Rad has differentiated from a flurry of e-bike competitors with its direct-to-consumer model, diverse product offering, accessible price points, and more. Its bikes top out at 20 MPH and range from $999 to $1,999, across 11 models.
The company also innovated around its distribution strategy. To combat industry-wide supply chain woes, earlier this year Rad bought 64 containers and worked closely with a logistics partner to charter its cargo into the Port of Everett near Seattle. That helped shave 54 days off its delivery time. Rad says customers in North America will be able to get their e-bike within one week of ordering by the end of this year.
Rad is riding tailwinds from climate-related trends as people and companies look to lower their carbon footprint. Rad sells to commercial customers such as national pizza chains and food delivery companies, in addition to its consumer business.
Other competitors including VanMoof are also raising capital to support demand. The global e-bike market is expected to reach $118.6 billion by 2030, according to Allied Market Research. E-bikes are now a larger category than road bikes based on sales revenue, according to NPD Group.
Rad did not provide an updated valuation, but given the $329 million raised to date, it is likely nearing or has surpassed “unicorn” status as a billion-dollar company, joining an elite crew of Seattle-area startups, many of which have also reeled in massive funding rounds this year.
The people: The origins of Rad can be traced to rural California, where Rad founder and CEO Mike Radenbaugh tinkered with electric bikes to cut down on his 16-mile commute to school. Ty Collins joined as co-founder in 2015, as he and Radenbaugh raised $320,365 in an Indiegogo crowdfunding campaign. The duo won Young Entrepreneur of the Year at the GeekWire Awards in 2019. Collins stepped down earlier this year but remains in an advisory role.
Listen to Radenbaugh’s full entrepreneurial story in the How I Built This podcast.
The quote: “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,” Radenbaugh said.
The backers: The round included previous backers and was led by Fidelity Management & Research Company, with participation from Counterpoint Global (Morgan Stanley), Vulcan Capital, Durable Capital Partners LP, The Rise Fund (TPG’s multi-sector global impact investing strategy), and funds and accounts advised by T. Rowe Price Associates.
Rad’s other investors include Blue Nile and Zulily co-founders Darrell Cavens and Mark Vadon, who made an undisclosed investment in 2019.