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

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Cowboy and VanMoof are two very related e-bike corporations, which is why we’re all questioning if Cowboy will likely be subsequent to file for chapter now that the period of free VC cash is over and profitability is essential to survival. This week Cowboy launched a less expensive no-frills e-bike configuration forward of one more value enhance. Strikes which have solely intensified scrutiny of the boutique Belgian startup.

Nonetheless, Cowboy CEO Adrien Roose tells me that the electrical bike maker is on safer footing, regardless of all of the similarities.

For instance, each European e-bike makers took on hundreds of thousands from buyers lately whereas posting heavy losses during times of fast scale up. Each concentrate on direct-to-consumer gross sales of premium, software- and sensor-laden e-bikes assembled from numerous customized elements, and each Cowboy and VanMoof needed to safe further funding earlier within the yr to cope with unexpected operational challenges in a post-pandemic e-bike market that has cooled off significantly.

From left-to-right: the Cruiser ST, Cruiser, and Basic.
Picture: Cowboy

This week, Cowboy launched a cheaper (however nonetheless not low-cost) $2990/€2490 “Core” configuration of its Basic, Cruiser, and Cruiser ST fashions that gives fewer options, like changing the maintenance-free Gates Carbon belt drive with an oily chain-drive, because it raises costs elsewhere. That’s eerily much like VanMoof’s product trajectory with the launch of the cheaper scaled-back S4 after elevating costs on its overwrought S5 flagship, all simply two months earlier than the corporate went public about its dire monetary state of affairs.

Cowboy’s Core e-bike configurations solely are available black, lack a wi-fi charger below the built-in telephone mount, and ship with a slower charging brick. Cowboy informed Dutch-language Bright magazine that the upcoming value enhance from $3490/€2990 to $3790/€3290 on August 1st for its belt-driven (now known as “Efficiency” configurations) e-bikes was required to “keep wholesome” (extra on that later). Those self same e-bikes have been priced at €2490 when launched in Europe two years in the past and as little as $1990 when first launched to the US — again when startups might promote their electrical bikes at a loss as a result of seemingly limitless provide of investor capital.

Cowboy goals to additional justify the distinction between the Core and Efficiency configurations via software program. Transferring ahead, Cowboy e-bikes configured for Efficiency will profit from the in any other case non-obligatory $300/€300 Cowboy Join software program options like adaptive energy, crash detection, and three new Google Maps options to share dwell journey data, alert the rider to imminent hazards, and the power to decide on a route primarily based on the perfect air high quality. Cowboy Join additionally unlocks the e-bike maker’s first Apple Watch app. All good to have, I assume, however definitely not important to the operation of an e-bike.

So yeah, like VanMoof, Cowboy e-bikes are high-tech proprietary computers-on-wheels with a characteristic set that may, at instances, verge on gimmickry. Nonetheless, Cowboy needs you to know that it’s totally different.

“Cowboy is in a really totally different place to VanMoof,” insists Cowboy CEO Adrien Roose in an electronic mail change with The Verge. “Our key stakeholders together with our buyers, provide chain and distribution companions and workers are totally supportive of the marketing strategy we’re executing.”

The massive distinction between Cowboy and VanMoof is the prospect of profitability: Cowboy has repeatedly mentioned that it’s shut, after having posted EBITDA losses of round €21 million over the previous few years; however VanMoof by no means was, having reportedly misplaced practically €80 million in every of the final two years. 

Final week, Cowboy issued a press launch titled “Cowboy on observe to profitability with break at the same time as of Q3 2023.” Nonetheless, Roose now tells me that the corporate is “on observe to realize our purpose of profitability inside the present quarter, and on a full yr foundation subsequent yr.” After all, profitability could possibly be €1, however even that could be a primary for the six-year previous firm after a historical past of losses. A worthwhile 2024 will surely be notable.

Cowboy co-founder and CEO Adrien Roose on a C4, aka Basic again at its launch.
Picture by Thomas Ricker / The Verge

Roose cites “significant income progress” for every month this yr up to now for his optimism concerning the quarter ending on September thirtieth, in addition to “sturdy gross sales” via July following the launch of its extra upright and cozy Cruiser e-bike on July third. “We anticipate gross sales to exceed our goal which is able to make it the perfect month of the yr up to now.” 

Roose lists just a few different notable variations between Cowboy and VanMoof:

  • Cowboy assembles near its clients in Europe. (VanMoof’s e-bikes have been assembled and distributed to clients from its manufacturing unit in Taiwan.)
  • Cowboy has developed from a D2C-only enterprise and now distributes its bikes via an increasing vary of unbiased bike sellers and retailers. By these bike sellers the corporate can also be reworking its after-sales mannequin. (VanMoof’s direct-to-consumer help was virtually totally carried out at about 50 branded shops in choose cities, whereas Cowboy is presently working with over 100 unbiased bike shops to promote, restore, and repair its bikes with one other 200 scheduled to come back on board in Europe this yr.)

To “keep wholesome,” Roose candidly explains that the August 1st value enhance is required to make sure that cheap revenue margins exist for each Cowboy and its new community of unbiased bike store companions. Roose additionally cites a number of different metrics to reveal the corporate’s relative operational well being: 

  • Cowboy stock is down 50 % from a yr in the past and its working capital place is secure.
  • Cowboy is reaching 40 % gross margin on new bikes bought.
  • Manufacturing prices are down 20 %.

So, when you may not like Cowboy’s value enhance, that coupled with operational efficiencies throughout the board could possibly be the distinction between your costly e-bike working for years, and, properly… VanPoof! [Editor’s Note: credit to ex-Verge Dieter Bohn for sliding that and “VanOOF” into my DMs on the day VanMoof declared bankruptcy.]

Regardless of the chance VanMoof’s exit presents, which was acknowledged by Cowboy’s cheeky launch of the Bikey app (that has earned the corporate oodles of goodwill in VanMoof communities), Roose appeared genuinely distraught over VanMoof’s demise once I met with him on a video name, a sense that was additionally expressed by fellow Cowboy co-founder and CTO Tanguy Goretti.

“Whereas lots of people will likely be fast to leap weapons and criticize VanMoof, I feel they nonetheless deserve some recognition for his or her achievements,” wrote Goretti on Linkedin. “They’ve helped change the face of the trade and the notion of e-bikes since they began 14 years in the past (!). They made it cool when it was a product primarily utilized by our grandparents. They honestly had a constructive affect on cities and never a small one.”

RIP, VanMoof — you’ll all the time be my first.

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