Cowboy, the Brussels-based firm that has been designing and promoting electrical bikes which you could see in main cities throughout Europe, has closed a small, strategic funding spherical of €5 million (round $5.5 million at present trade charges). That consists of €1 million in debt amenities.
While the quantity isn’t as spectacular as a few of Cowboy’s earlier fundraises, the corporate has been searching for an investor exterior of the standard European VC corporations which have already invested within the startup — an investor that might probably open new doorways. As a end result, Cypress Capital is main the spherical. The Hong Kong-based funding agency has robust ties with Taiwan, which is a key hub for the worldwide bicycle business.
“A number of our Asian-based suppliers are Taiwanese for historic causes. We are rising the portion of our European suppliers repeatedly as we have now about half of our elements that come from European suppliers. But the opposite half comes from Asia and principally from Taiwanese suppliers,” Cowboy co-founder and CEO Adrien Roose (pictured above proper) instructed TechCrunch.
Existing buyers Index Ventures, Hardware Club, Future Positive Capital, Isomer and Exor are additionally collaborating as soon as once more in Wednesday’s funding spherical. Cowboy will even launch an fairness crowdfunding marketing campaign to present a chance to its clients to spend money on the corporate.
“We’ve been elevating someplace between €10 [million] and €20 million a yr over the previous couple of years,” Roose mentioned. “And yeah, the quantity has gone down. Last yr we raised €8 million in fairness and €5 million of debt. And now we’re simply asserting a €5 million elevate, which is a reasonably small elevate for a corporation of our measurement.”
According to him, the corporate wants to boost much less capital as a result of it requires much less capital. Cowboy must be roughly breakeven on an EBITDA foundation for the second half of this yr. Next yr, he says, the corporate will flip a revenue for the primary time since its inception.
“And we don’t need to elevate greater than what we’d like, particularly in these market situations,” Roose added. It doesn’t imply that Cowboy gained’t elevate ever once more. However, it’s been a wild journey for the startup because the e-bike business skilled a big enhance in gross sales after COVID-related lockdowns. The firm’s valuation peaked round that point.
But then, demand slowed down fairly drastically. VanMoof, one other European e-bike startup backed by enterprise capitalists, declared chapter. It had a chilling impact on your complete business.
With this latest funding spherical, Cowboy is now valued at €40 million on a pre-money foundation. But now, all eyes are on profitability — not the corporate’s valuation. “We’re beginning to see a ray of sunshine after the rain,” Roose mentioned.
And imagine it or not, rain performs an necessary half in Cowboy’s gross sales. The firm normally sells extra bikes throughout the spring as individuals begin eager about biking to work and different locations. It’s been significantly wet in Europe this yr, so Cowboy’s gross sales have been a bit underwhelming.
Additional Cowboy kind elements
The firm initially centered on a single mannequin and iterated on the design through the years. After Cowboy 1 got here Cowboy 2, Cowboy 3 and Cowboy 4. The firm is now transferring away from numbers and increasing its lineup to different kind elements.
Cowboy added the Cruiser, a mannequin with an upright driving posture and a step-through model to attraction to extra riders. This yr, the corporate added the Cowboy Cross mannequin, an all-road mannequin that goals for consolation and long-distance journeys.
Similarly, Cowboy has diversified its distribution channels. In addition to its on-line shops, Cowboy now sells its e-bikes in conventional bicycle shops. “Since final yr, we began doing partnerships with native bike retailers as a result of the actual fact is that 80% of e-bikes offered in Europe are nonetheless offered by these bike retailers, and so we need to embrace that,” Roose mentioned.
Behind the scenes, Cowboy bikes share the identical digital platform and software program options, equivalent to theft alerts, crash detection, in-app challenges and AdaptivePower. This characteristic, which has been just lately up to date, robotically adjusts the facility of the motor relying on the present slope or wind situations.
“We’ve invested plenty of time, efforts and capital into constructing that platform that works rather well. And now we need to capitalize on it and primarily construct a household of merchandise,” Roose mentioned. “So we have now the Classic, the Cruiser, the Cross. And you will notice extra bikes from us sooner or later.”
