Cowboy says it’s not the next VanMoof as it raises prices to ‘stay healthy’

Cowboy and VanMoof are two very similar e-bike companies, which is why we’ve all been wondering whether Cowboy will file for bankruptcy now that the era of free VC money is over and profitability is the key to survival. Cowboy this week introduced a cheaper no-frills e-bike configuration ahead of another price hike. Moves that have only intensified the scrutiny of the boutique Belgian startup.

Still, Cowboy CEO Adrian Ruiz tells me that despite all the similarities, the electric bike maker is in a more secure position.

For example, both European e-bike makers raised millions in debt from investors in recent years, while posting huge losses during periods of rapid growth. Both focus on direct-to-consumer sales of sensor-loaded e-bikes assembled from premium, software and lots of custom parts, and both Cowboy and VanMoof had to secure additional funding early in the year to deal with unexpected operational challenges. The e-bike market has largely cooled down after the pandemic.

This week, Cowboy launched a less expensive (but still not cheap) $2990/€2490 “core” configuration of its Classic, Cruiser and Cruiser ST models that offers fewer features, such as replacing the maintenance-free Gates carbon belt drive with an oily chain-drive, as it drives up prices elsewhere. It’s similar to VanMoof’s product trajectory, in which it launched the cheaper scaled-back S4 after raising prices on its older S5 flagship just two months before the company went public about its dire financial situation.

Cowboy’s core e-bike configuration only comes in black, lacks a wireless charger underneath the integrated phone mount, and comes with a slow charging brick. cowboy told in dutch shiny magazine The upcoming price hike from $3490/€2990 to $3790/€3290 on August 1st for belt-driven (now called “performance” configurations) e-bikes was necessary to “stay healthy” (more on that later). Those same e-bikes cost €2490 when launched in Europe two years ago and $1990 when first introduced in the US – when startups could sell their electric bikes at a loss due to an endless supply of investor capital.

Cowboy aims to further justify the distinction between core and performance configurations through software. Going forward, Cowboy e-bikes configured for performance can be equipped with otherwise optional $300/€300 Cowboy Connect software features such as adaptive power, crash detection and sharing of live trip information, alerting the rider to oncoming hazards, and the best air quality. Three new Google Maps features will benefit from the ability to choose routes based on quality. The Cowboy Connect also unlocks the first Apple Watch app from an e-bike maker. It’s all cool I guess, but certainly not critical to the operation of the e-bike.

So yes, like the VanMoof, Cowboy e-bikes are high-tech proprietary computers-on-wheels with a feature set that can border on gimmicky at times. Still, Cowboy wants to let you know that it’s different.

Cowboy CEO Adrian Roose insisted in an email exchange, “Cowboy is in a very different position from VanMoof.” ledge, “Our key stakeholders including our investors, supply chain and distribution partners and employees are fully supportive of the business plan we are executing.”

The big difference between Cowboy and VanMoof is the potential for profitability: after posting EBITDA losses of around €21 million over the past few years, Cowboy has repeatedly said it is close; But that never happened to VanMoof, reportedly losing around €80 million in each of the last two years.

Last week, the Cowboys issued a press release titled “Cowboys on path to profitability with third quarter 2023 break-even.” However, Roose now tells me that the company is “on track to achieve its target of profitability within the current quarter and next year on a full-year basis.” Of course, the profitability may be €1, but still He This would be a first for the six-year-old company after a history of losses. A profitable 2024 will certainly be remarkable.

Roose cited “meaningful revenue growth” for each month so far this year, as well as “strong sales” through July following the launch of its more upright and comfortable cruiser e-bike on July 3, for its optimism about the quarter ending Sept. 30. , “We expect sales to exceed our target making this our best month of the year so far.”

Roose lists some other notable differences between cowboys and vanmoofs:

• Cowboy assembles closer to its customers in Europe. (VanMoof’s e-bikes are assembled from its factory in Taiwan and delivered to customers.)
• Cowboy has evolved from a D2C only business and now distributes its bikes through an expanding chain of independent bike dealers and retailers. Through these bike dealers, the company is also making changes in its after-sales model. (VanMoof’s direct-to-consumer support was conducted almost entirely at approximately 50 branded stores in select cities, while Cowboy currently works with more than 100 independent bike stores to sell, repair and service its bikes.) with another 200 to join. Europe this year.)

“To stay healthy,” Roose clearly states that the August 1st price increase is needed to ensure that a reasonable profit margin exists for both Cowboy and its new network of independent bike shop partners. Roose also cites several other metrics to demonstrate the company’s relative operational health:

• Cowboy inventory is down 50 percent from a year ago and its working capital position is stable.
• Cowboy is achieving 40 per cent gross margin on new bikes sold.
• Production cost is reduced by 20 percent.

So, while you may not like the Cowboy’s price hike, it could be the difference between your years of expensive e-bikes with operational efficiencies across the board, and, well… vanpoof! (Editor’s note: Credit goes to ex-Verge Dieter Bohn for putting this and “VanOOF” in my DMs the day VanMoof declared bankruptcy.)

Despite the opportunity for VanMoof’s exit, which was recognized by Cowboy’s cheeky release of the Bikey app (which has earned the company considerable goodwill in VanMoof communities), Roose seemed genuinely distraught over VanMoof’s demise when I met him on a video call, a sentiment that was also expressed by fellow Cowboy co-founder and CTO Tangui Goretti.

“While many individuals will immediately jump guns and criticize VanMoof, I think he still deserves some recognition for his achievements,” Goretti wrote on LinkedIn, “Since starting 14 years ago (!) they have helped change the face of the industry and the perception of e-bikes. They made it good when it was a product primarily used by our grandparents. He really had a positive impact on the cities, not a small one.”

RIP, VanMoof – you will always be my first person.