Cowboy investors remain bullish though losses widen on supply turbulence

Electric bike maker Cowboy has once more raised significant funds from investors, who have generated an over-subscribed €3.2 million, far surpassing the initial €1 million target.

The funding boost comes just months after an €73 million Series C raise, which came in tandem with an indication brand stores would form part of the strategy to reach consumers going forwards. 2,279 investors from 31 countries took part in this additional Crowdcube effort, taking the firm north of $120 million in funding raised.

Investment is never without risk, however, and vast inflows into the bicycle industry come at a time when supply turbulence, while not unique to the bike industry, is creating a steady headwind against quick progress.

That has meant that while appetite to invest in the micromobility movement remains high, Cowboy is one example of a business where losses at present outweigh turnover. Tijd.be illustrates that the pace of operating losses has now accelerated to double year-on-year from €9.8 million to €20.1 million in 2021. Should the supply chain situation improve Cowboy’s short term pain may pay off, if their forecasts are accurate.

Turnover sat at €16 million, with €28 million in orders placed last year lined up, so a turnaround could well be on the horizon. The crowdfunding documents are not shy about aligning Cowboy’s trajectory with the market’s broader growth, forecasting orders in the range of 75,000 a year by 2024, more than three fold the current figure. All being well, the firm predicts €194 million revenues by 2024.

Investors remain undeterred by the losses. The micromobility market is of course touted to have be on course for a sharp compound growth rate as cities face up to congestion and consumers seek more agile and healthier transport options. Electric bikes, for which Cowboy specialises, are not only the darling of investors, but of bike shops too. Within CI.N’s market report these bikes have been consistently shown to be one of the largest investments made in retail stock.

There is hope in the bike world that, with price increases on most other transport forms rising sharply, the potential savings on cycling for transport will resonate with consumers, but prices for an outright purchase of electric bikes are likewise not getting cheaper and the public at large’s perception of value versus convenience may have some way to shift yet. Cowboy’s bikes, for example, recently rose 12% in price, taking its C4 model to €2,790.

As reported recently on CI.N, the industry is increasingly at the mercy of sharply rising raw material prices, which are compounding other costs such as shipping, likewise running at a high.

Cowboy pin the slower than anticipated progress to widely known and hardly unique circumstances surrounding supply chains, in particular the issue of finishing bikes while component shortages persist on select key lines. Production of the firm’s C4 is delayed, as a result. The local news site flag that with these delays, bicycles not delivered equate to no payment and thus the widening of the gap between banked turnover and losses.

The latest funding effort accounts for a 1.8% share of Cowboy. The largest funding chunks came from the UK, France and The Netherlands.

Adrien Roose, CEO and co-founder of Cowboy says of the latest raise: “The campaign has truly exceeded our expectations and we want to thank all of our investors so far. It reinforces our belief that we hold all the right cards to positively change urban mobility. Our exceptional community is a major asset, as evidenced by the thousands of investors from 31 countries who have joined us in this adventure. This new crowdfunding round strengthens even more the precious connection with our riders.”