Rad Power Bikes Raises $150 Million in Funding - E-Bike Boom

The Rise of Rad Power Bikes

A significant surge in electric bike sales occurred in 2020, largely influenced by the changes to daily routines brought about by the COVID-19 pandemic.

Rad Power Bikes is now capitalizing on this increased demand, planning to expand its operations globally and double its employee base.

Securing Significant Investment

The Seattle-based company announced on Thursday that it has secured $150 million in funding from various institutional investors.

These investors include Morgan Stanley’s Counterpoint Global Fund, Fidelity Management & Research Company, TPG’s The Rise Fund, and funds managed by T. Rowe Price Associates.

Durable Capital Partners LP and Vulcan Capital, both existing investors, also contributed to this funding round.

This investment represents the largest funding round to date for a U.S.-based electric bike startup, demonstrating confidence in Rad Power’s business approach and expansion capabilities.

The company exceeded $100 million in sales in 2019, and while Rad Power Bikes has not disclosed its 2020 sales figures, this funding validates its growth trajectory.

Rad Power’s Competitive Advantage

Rad Power distinguishes itself as a direct-to-consumer electric bike retailer, focusing on durable products with features like fat tires, substantial batteries, and powerful motors.

These bikes often include touchscreens and cargo-carrying features, all offered at price points considerably lower than those of competitors.

From Custom Builds to Global Sales

Founded in 2007, the company initially operated as a small-scale custom bike builder.

A pivotal shift occurred in 2015 when founder and CEO Mike Radenbaugh partnered with Ty Collins to relaunch the business as a direct-to-consumer enterprise.

Their initial success came with the RadRover Electric Fat Tire bike, funded through an Indiegogo campaign.

Today, Rad Power offers a portfolio of 11 different bike models, available for purchase in 30 countries.

Expanding Beyond Bikes

Rad Power has broadened its offerings beyond just bicycles.

The company has developed a robust online sales platform, comprehensive customer support services, retail showrooms, a mobile service van fleet, and a network of local service partners.

Notably, Radenbaugh emphasizes that the company has consistently maintained profitability throughout its expansion.

Funding History and Future Plans

While largely self-funded, Rad Power previously raised a smaller private round of funding in 2009 and a $20 million investment in 2020.

The total funding raised to date amounts to $175 million, with the majority coming from this latest round.

Radenbaugh views this funding as an opportunity to accelerate investments in areas where the company has already seen positive results.

The new capital will be allocated to scaling operations across all sectors of the business.

Currently employing 325 individuals, Rad Power plans to double its workforce by the end of 2021.

Expansion plans also include adding more retail locations and service centers, diversifying the supply chain through additional contract manufacturers, and expanding the range of available accessories for bike customization.

Investing in Innovation

The fastest-growing team within Rad Power will be its research and development department, currently comprised of 35 people.

Radenbaugh stated the primary focus will be on developing new vehicle categories.

While remaining an e-bike company with pedals, Rad Power aims to create products that increasingly blur the lines between e-bikes, scooters, mopeds, and even the automotive sector.