Bike Club secure £16.75M for national and European expansion

After closing £16.75M in new investment the largest bike-subscription scheme in the UK, Bike Club, has secured funding for its ambitions to pedal into Germany and France within the next 12 to 24 months.

The announcement confirms the cash injection, part of a Series B funding round, was led by the Circularity Capital, a private equity firm specialising in circular economy businesses – which challenges the “take-make-dispose” approach to production and consumption, encouraging the elimination of waste instead, along with existing investor Codex Capital.

Founded in 2016 by James Symes and Alexandra Rico-Lloyd, Bike Club had, pre this new round of investment, raised £13.25M to revolutionize the cycle industry by offering families the chance to subscribe to new or refurbished bikes and scooters online, and then exchange them as their child grows.

Cycling is one of the very best ways for children to get active, build confidence and develop vital skills that will benefit them throughout their lives. Yet, bikes can be a costly burden for both families and the environment and manufacturing just one bike results in emissions of 96 CO2 (kg) in greenhouse gases.

For context:

• Approximately 900,000 children’s bikes are sold annually in the UK with a €4.3bn opportunity in Europe.
• To ensure children experience the benefits of riding the perfect-sized wheels, a parent would need to buy eight different bikes before their child has turned 12 years old.
• Children grow fast, making this year’s bike, next year’s headache – there are around 12.5M unused bikes in the UK alone – not to mention the cost associated and the impact on the planet due to waste.

As an on-the-go cycling subscription service Bike Club is on track to deliver £5.8m of revenue this year, rising to £11m next year, with a current company valuation of £45/$57m//€53m.

• The business is outgrowing the fleets of Lime, Uber and Santander Cycles, with an easy-to-manage monthly subscription program — costing between £4.49 to £15.99 per month — currently managing a network of 40,000 quality bikes.
• Bike Club’s fastest growing category is First Pedal (age 3–6 yrs) with a 76% increase in 2021 v 2020, which points to an entry point – first bike – on a customer journey across age ranges.
• With the new investment, Bike Club is on track to climb to 220,000 over the next three years. Subscribers are now set to more than double to 80,000 in the next year.

David Mowat, Partner of Circularity Capital, a specialist company that invests in growth stage businesses in the circular economy said: “Bike Club’s circular economy means less bikes need to be produced each year. So far, their fleet has saved 1,174 tonnes of CO2 versus ownership. As society faces climate change, we should work together to consume better, meaning we should rent better things and refurbish them. This is exactly the option Bike Club gives tens of thousands of families across the UK.”

Jamie Lawson-Brown, a co-founder of Codex Capital and Board member of Bike Club said: “Codex Capital and its co-investors, including Brett Palos Investments, first invested in Bike Club during the summer of 2020, a challenging time for all businesses being the height of the first C-19 lockdown.”

“We have worked closely with Management, including navigating global supply chain disruption, and today are a much stronger and very well capitalised business.”

“Bike Club’s simple and convenient model offers customers flexibility to make the right choices for their children and their wallets, and the business is perfectly positioned given consumers’ increasing focus on the environment combined with financial headwinds in the form of fiscal tightening, energy price rises and inflation.”

In April Bike Club announced an online expansion of its John Lewis partnership having see great success with the initial Stratford based in-store launch.