Rad Power just got $150m from investors. What will they do with it?

[Asher]

Aside from spending it on marketing and uh a new wheel standard lol.

Rad is just bizarre for how much sales volume and money it has yet with bikes lacking higher speed, size variation, and finesse (even the controllers aren't integrated into the frame!). You'd think a company this size would have much more polish and range.

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[jazz]

Aside from spending it on marketing and uh a new wheel standard lol.

Rad is just bizarre for how much sales volume and money it has yet with bikes lacking higher speed, size variation, and finesse (even the controllers aren't integrated into the frame!). You'd think a company this size would have much more polish and range.

PR.co Newsroom

PR.co builds (corporate) websites and software for the world's fastest-growing companies, including Just Eat Takeaway, WeTransfer, Remote, Dolby, and Polaroi...

press.radpowerbikes.com

Yes agreed. Their line up has evolved but the designs look dated compared to companies such as Sondors which are continuously evolving with new frames, integrated batteries, mid-drives etc.

 

[FlatSix911]

Mods, you may want to merge with this thread. Thanks

Rad Power Bikes lands massive $150M investment

This is good news regarding the continued growth of affordable EBikes. https://electrek.co/2021/02/04/leading-us-electric-bike-company-rad-power-bikes-lands-massive-150m-investment/ Rad Power Bikes has announced a large funding round that will see $150 million added to the industry-leading...

electricbikereview.com

 

[Asher]

Mods, you may want to merge with this thread. Thanks

Rad Power Bikes lands massive $150M investment

This is good news regarding the continued growth of affordable EBikes. https://electrek.co/2021/02/04/leading-us-electric-bike-company-rad-power-bikes-lands-massive-150m-investment/ Rad Power Bikes has announced a large funding round that will see $150 million added to the industry-leading...

electricbikereview.com

Thanks. I posted it here because it's a big amount of money that could impact the greater US ebike industry.

I would love for Rad to make big moves and create something fresh and polished. Their cargo bikes seem interesting for what they are, but mostly because so few companies make cargo bikes at that price. Everything else Rad does just seems so uninspired and drab. It's nuts that a small company like Ride1Up can run circles around them in product.

Understand that venture capital investors go after companies they think have a strong 'moat', protection from competition. It seems like the play here is building out a strong retail and repair service distribution that other companies can't rival. Which might make sense if they had highly distinguished products... But they don't lol.

I've heard Rad called the gateway or starter ebike brand. And there's plenty of people who've never owned an ebike and don't know Rad from Specialized, so there's still plenty of sales opportunity for them.

 

[Ravi Kempaiah]

Rad did a lot of smart, aggressive marketing and they did a good job at keeping the price point affordable.
As the numbers grow, service becomes a HUGE factor and it was inevitable that they had to start service centers all over or else they would lose the market share.

At Zen, we have just started approaching small-scale VCs and it is awesome that Rad was able to pull in a few top investing firms.

 

[Asher]

Rad did a lot of smart, aggressive marketing and they did a good job at keeping the price point affordable.
As the numbers grow, service becomes a HUGE factor and it was inevitable that they had to start service centers all over or else they would lose the market share.

At Zen, we have just started approaching small-scale VCs and it is awesome that Rad was able to pull in a few top investing firms.

I imagine it'll make it easier for you to raise money, which is great. As for service, the bikes had a 1 year warranty on them anyway so I don't quite see why service is essential. And considering their whole appeal is to novice riders through copious marketing, it doesn't seem like brand reputation mattered that much.

I agree.
As ugly as outside mounted controllers and non-integrated batteries, they are super easy to understand and service for people who know nothing about ebikes.
It will be much easier for Rad to send a new controller if anything goes wrong, and people that are not mechanically inclined can fix them.

Easy DIY serviceability is indeed, very attractive to many people.

There are no hydraulic brakes.. and it Rad bikes have freewheel instead of cassette, but their customers probably don't care or don't know the difference.
It was better for Rad to save money by going cheaper parts and spend money on customer service.

Rad did make smart business moves.

As Kevin O'Leary from Shark Tank said, when it comes to business, "numbers don't lie".

It was financially savvy, but you would think they'd offer something more upscale and polished at the same time. I guess they're just like the internet version of Pedego, and even a mediocre e-bike will please people, who are coming from manual bikes. We're still like 5+ years away from most ebike buyers being discerning about their purchase as in a mature market.

Personally, I'll always side with the companies that are reaching the masses with quality, progress and value. I'd put Ride1Up and Zen in that box.

 

[FlatSix911]

Thanks. I posted it here because it's a big amount of money that could impact the greater US ebike industry.

I would love for Rad to make big moves and create something fresh and polished. Their cargo bikes seem interesting for what they are, but mostly because so few companies make cargo bikes at that price. Everything else Rad does just seems so uninspired and drab. It's nuts that a small company like Ride1Up can run circles around them in product.

Understand that venture capital investors go after companies they think have a strong 'moat', protection from competition. It seems like the play here is building out a strong retail and repair service distribution that other companies can't rival. Which might make sense if they had highly distinguished products... But they don't lol.

I've heard Rad called the gateway or starter ebike brand. And there's plenty of people who've never owned an ebike and don't know Rad from Specialized, so there's still plenty of sales opportunity for them.

Your description is spot on... Rad is the gateway drug to EBikes.
They make great starter bikes and get a lot of people into the sport of cycling... more riders is a good thing!

 

[McCorby]

It was financially savvy, but you would think they'd offer something more upscale and polished at the same time. I guess they're just like the internet version of Pedego, and even a mediocre e-bike will please people, who are coming from manual bikes. We're still like 5+ years away from most ebike buyers being discerning about their purchase as in a mature market.

Why do you feel so strongly that manufacturers need to cater to all of the markets....... i.e. entry, budget, mid, premium....? What’s wrong with them focusing on just one or two?

 

[Asher]

Why do you feel so strongly that manufacturers need to cater to all of the markets....... i.e. entry, budget, mid, premium....? What’s wrong with them focusing on just one or two?

Partly it's selfish. I want a brand to sell bikes I would buy, because there just isn't a lot of choice for a class 3 commuter ebike, ideally with a hub drive and a torque sensor.

There are other reasons. Sustainability: Rad bikes don't seem like they're long for this world, especially when you need to buy an expensive new battery every few years. I don't see people nursing Rad bikes to health for a decade or two, unlike a good pedal bike. Nor do I see it with Stromer given all it's proprietary tech.

Strategy: you'd think you want to keep a customer for life, even if they decide they are ready to spend more and buy something better - but Rad doesn't offer anything like that.

How I see Rad's strategy:
1. Aggressive marketing to reach many customers
2. Low prices (and quality) to entice casual shoppers to buy
3. Good service during 1 year warranty period
4. Even mediocre ebikes are a revelation to people used to (mediocre) manual bikes
5. Train consumers to see ebikes as a consumer electronic that one upgrades every couple years.

 

[goldconch]

Concurrently, Mr. Bezos has stepped down as CEO at Amazon to apply more of his time into Blue Origin and his colossal $10Bln Bezos Earth Fund. With all that pent-up environmental capital, we should expect some monumental disruptions in many comfortable sectors. Rivian has also delivered the first of 10,000 all-electric Amazon delivery trucks with deliveries in LA this week. Bezos has the horsepower to obliterate the e-bike market if he wants to allocate a small team to that...but would that be useful for the environment? I guess we'll see if capitalism instincts can be restrained by a greater sense of collective utility...I think they can coexist.

 

[AHicks]

There are other reasons. Sustainability: Rad bikes don't seem like they're long for this world, especially when you need to buy an expensive new battery every few years. I don't see people nursing Rad bikes to health for a decade or two, unlike a good pedal bike. Nor do I see it with Stromer given all it's proprietary tech.

Again, I have to disagree here, as the RAD's aren't going to go through any more batteries than any other manf. is going to. If you are referring to the fact they use a proprietary rack to hold the battery, that's a fact, but replacing that rack is an easy DIY project many will find they can do in an hour's worth of work. MOST new batteries of that type come with a replacement rack, so there's no additional expense involved. The batteries are easy to come by on the open market. To me, the fact that most everything I can think of that's used to build a RAD bike is the same way. It's using ALL generic parts. Point here being, there are many much less expensive batteries that will work just fine on these bikes. There is NO point in buying one from RAD for what they get for them. -Al

 

[Asher]

Again, I have to disagree here, as the RAD's aren't going to go through any more batteries than any other manf. is going to. If you are referring to the fact they use a proprietary rack to hold the battery, that's a fact, but replacing that rack is an easy DIY project many will find they can do in an hour's worth of work. MOST new batteries of that type come with a replacement rack, so there's no additional expense involved. The batteries are easy to come by on the open market. To me, the fact that most everything I can think of that's used to build a RAD bike is the same way. It's using ALL generic parts. Point here being, there are many much less expensive batteries that will work just fine on these bikes. There is NO point in buying one from RAD for what they get for them. -Al

I agree with your points here, but fundamentally I think they're irrelevant to most Rad buyers.

1. Low trust in batteries from other sources: I'm more knowledgeable about ebikes than the vast majority of users, and I still have strong reservations about using third party batteries, unless I knew a local bike shop or e-bike expert who would stand by a given model. I don't know any, and few people do. Maybe in a couple years the generic battery market will mature, but it's not there yet. And Rad's battery prices are actually pretty decent, better than Luna's even on a pure $/wh battery, $0.81 vs $0.96.

2. $550 battery cost, on a bike that originally cost $1000-1500, and has depreciated to cost $500-1000, assuming it hasn't had expensive failures (frame, wheel, etc), and newer shinier models have arrived since you bought your bike. The appeal of throwing more money into your bike for a non-hobbyist is not very high. Especially if the bikes aren't very durable: http://thedailyriderdc.com/thinking-of-purchasing-a-radpower-bike-read-this-first/ (via @Dewey)

 

[tomjasz]

"numbers don't lie".

Liars use numbers.

 

[PedalUma]

RAD gives eBikes generally a bad reputation. Daily I come across "experts" who's only experience is riding their brother-in-law's RAD. I do service them. They often arrive with flaws that are easy to diagnose.

 

[legsofbeer]

$550 battery cost, on a bike that originally cost $1000-1500, and has depreciated to cost $500-1000, assuming it hasn't had expensive failures (frame, wheel, etc), and newer shinier models have arrived since you bought your bike. The appeal of throwing more money into your bike for a non-hobbyist is not very high.

Not sure what point you are making. Are you trying to claim people would rather spend $1600 on a new bike rather than rejuvenating the one they have with a $550 new battery? I don't agree, and neither would any prius owner who's dropped $10k on a battery refresh after 200K+ miles. Prius owners aren't auto hobbyists.

Are you saying that the rad bike owner not buying a new battery will result in the bike being thrown in the garbage? Nonsense--they'll instead sell the bike to someone who *will* replace the battery, and apply the money to a new bike if they still want to bike.

When I reach the point where the battery needs replacing (likely somewhere around 16k miles), I'll make a rational choice on whether to replace bike or battery. Either way, the current bike will continue to be used, barring catastrophic failure.

 

[Asher]

Are you trying to claim people would rather spend $1600 on a new bike rather than rejuvenating the one they have with a $550 new battery?

Most, yes, among Rad's target demographic. Rad's formal relationship with customers is 1 year, until the warranty expires, unlike traditional brands offering 5 years or lifetime frame warranties. Pedal bikes that are 1-2 years old go for half msrp used, and they have far more longevity and less obsolescence than an ebike, thanks to no battery/motor/controller.

You hear people saying it all the time about very old cars about sinking thousands in a car that's already near worthless. But at least a car is very expensive to replace, and are not something you replace frequently like a phone.

An ebike is more like a phone, which people are already keeping on average 3-4 years now, because of price, the (perceived) rate of technological change, and unlike a phone, the propensity to go unused, i.e. many people stop riding their ebike for whatever reason.

The bike may end up idling in the garage for years or on Craigslist, but neither of those are much competing with Rad selling new bikes.

 

[tomjasz]

okay?
So you're saying that $150 million investment was a lie?

You wrote As Kevin O'Leary from Shark Tank said, when it comes to business, "numbers don't lie"."

I responded to that quote, no more no less. But as an aside, O'Leary is a completely arrogant asshat.

 

[tomjasz]

Numbers can be massaged to have any intended effect. IMO.

 

[legsofbeer]

Pedal bikes that are 1-2 years old go for half msrp used,

If you can sell me one to two year old used rad power bikes at 50% of retail, I will buy as many as you have, and run laughing to the bank. When asked what my radrover costs, I tell the buyer, $1600 new, $1800 used, because there's no waiting list and someone already assembled it for you.

You hear people saying it all the time about very old cars about sinking thousands in a car that's already near worthless. But at least a car is very expensive to replace

An ebike is not a car. The only cars remotely like it is a partial or fully electric car, which I already cited ($10k replacing batteries on a prius being a better option for some than $25k for a new one).

An ebike is more like a phone,

Some are, such as ebikes that have integrated unique batteries or german middrive motors that cost nearly as much to replace as an entire rad power bike. But people replace phones because they wear out (by design) in 3 to 4 years. Replacing the phone's battery may require a risky and expensive disassembly of the phone, and the fucking power connector socket stops working in as little as two years of normal use. The rad power bikes, generic parts and all, have almost nothing that is not replaceable (the frame, maybe).

the propensity to go unused, i.e. many people stop riding their ebike for whatever reason.

Then that customer is out of the market regardless and is irrelevant to the discussion. Like I said above, anyone buying a radpower bike is on the price-conscious end of the spectrum, and is extremely likely to evaluate the cost of replacing a worn out battery vs the cost of replacing an entire bike.

 

[Asher]

If you can sell me one to two year old used rad power bikes at 50% of retail, I will buy as many as you have, and run laughing to the bank. When asked what my radrover costs, I tell the buyer, $1600 new, $1800 used, because there's no waiting list and someone already assembled it for you.

The used market right now has never been more favorable to sellers. But in 2 years, I'm confident in predicting half price Rads will be readily available.

There's also diy ebike conversions that surface on Craigslist, and those have even more depreciation than manufactured ebikes.

Rad bikes at $500-900 off retail, 33-60% off.

Rad Power Bike RadCity 4 Electric Bike 2020 | eBay

Rad City RadCity 4 Electric Bike 2020. Condition is "New". Local pickup only. 750w motor. Bike has zero miles. Rode around the block only.

www.ebay.com

Rad City RadCity 4 Electric Bike 2020 | eBay

Condition is "New". Local pickup only. Bike has zero miles. Rode around the block only.

www.ebay.com

Pardon Our Interruption...

There are no ebikes that hold their value well. Most big brand pedal bikes don't either.