But whats driving the investment boom?
Why are ebikes so hot right now?
What makes a company a good investment, and how does the market differ from Europe vs the US?
Notable ebike investments in 2021
And its not only ebikes for purchase by consumers raising money.
Whats driven the massive uptick in ebike investment?
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COVID-19
COVID-19 got people back on their bikes to reduce their time spent on public transport.
Whats the level of penetration today?
Look at the Netherlands, penetration is at 42%.
If you look at Belgium and Germany, its 32%.
If you turn your eyes to the US its 2%.
And COVID has been to me the perfect catalyst to stimulate that adoption curve.
COVID-19 has been a tremendous accelerator, the trend that was latent, but that was about to explode.
In February, anE-BIKE act introduced a 30% US federal tax credit for electric bicycle purchases.
Pointillart also sees a trend of ebike purchases or subsidized by employers to aid employee retention.
Companies like Cowboy are leading the charge for fast long-life batteries.
They prioritize sustainability as a lifestyle choice.
Whats the reason for all the investment in direct-to-consumer ebikes over micromobility?
While micromobility continues to attract funding, the direct-to-consumer market has several upsides.
Morrow asserts:
Withmicromobility, youre not tied to a brand.
Its about whatever is closest to you and convenient.
Theres no brand loyalty.
With a VanMoof or a Cowboy, you are building brand loyalty.
Further, there is a much higher margin from a standalone purchase of ebikes.
Micromobility ebikes also have problems with a decrease in lifetime value and low resale value.
What kinds of factors make investors put their money towards one ebike company over another?
I asked Pointillart what makes an investor choose a brand.
He explained:
First of all, the question is, how big is that population?
And how price sensitive is that population?
To me, the community will be the ultimate win.
He gave the example of companies offeringgroup bike toursevery weekend to build a community around their brands.
Locally marketing ebikes is hard.
So if youre in the Netherlands, you want to ship to Germany.
But ultimately, all their goals are always going to be towards the US.
When you see companies get to the billion-dollar mark, they have figured out how to jump borders.
Investor interest in ebikes shows no sign of waning.
Story byCate Lawrence
Cate Lawrence is an Australian tech journo living in Berlin.
