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

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

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

For instance, each European e-bike makers took on hundreds of thousands from traders in recent times whereas posting heavy losses during times of speedy scale up. Both give attention to direct-to-consumer gross sales of premium, software- and sensor-laden e-bikes assembled from numerous customized components, and each Cowboy and VanMoof had to safe extra funding earlier in the 12 months to cope with unexpected operational challenges in a post-pandemic e-bike market that has cooled off significantly.

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

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

Cowboy goals to additional justify the distinction between the Core and Performance configurations by way of software program. Moving ahead, Cowboy e-bikes configured for Performance will profit from the in any other case non-obligatory $300/€300 Cowboy Connect software program options like adaptive energy, crash detection, and three new Google Maps options to share reside journey data, alert the rider to upcoming hazards, and the skill to select a route primarily based on the finest air high quality. Cowboy Connect additionally unlocks the e-bike maker’s first Apple Watch app. All good to have, I suppose, however definitely not crucial 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. Nevertheless, Cowboy desires you to know that it’s totally different.

“Cowboy is in a very different position to VanMoof,” insists Cowboy CEO Adrien Roose in an electronic mail trade with The Verge. “Our key stakeholders including our investors, supply chain and distribution partners and employees are fully supportive of the business plan we are executing.”

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

Last week, Cowboy issued a press launch titled “Cowboy on track to profitability with break even as of Q3 2023.” However, Roose now tells me that the firm is “on track to achieve our goal of profitability within the current quarter, and on a full year basis next year.” Of course, profitability might be €1, however even that can be a primary for the six-year outdated firm after a historical past of losses. A worthwhile 2024 would definitely be notable.

Roose cites “meaningful revenue growth” for every month this 12 months thus far for his optimism about the quarter ending on September 30th, as nicely as “strong sales” by way of July following the launch of its extra upright and comfy Cruiser e-bike on July third. “We expect sales to exceed our target which will make it the best month of the year so far.” 

Roose lists a couple of different notable variations between Cowboy and VanMoof:

• Cowboy assembles shut to its prospects in Europe. (VanMoof’s e-bikes have been assembled and distributed to prospects from its manufacturing facility in Taiwan.)
• Cowboy has advanced from a D2C-only enterprise and now distributes its bikes by way of an increasing vary of impartial bike sellers and retailers. Through these bike sellers the firm can be reworking its after-sales mannequin. (VanMoof’s direct-to-consumer help was nearly completely carried out at about 50 branded shops in choose cities, whereas Cowboy is at the moment working with over 100 impartial bike shops to promote, restore, and repair its bikes with one other 200 scheduled to come on board in Europe this 12 months.)

To “stay healthy,” Roose candidly explains that the August 1st worth enhance is required to make sure that affordable revenue margins exist for each Cowboy and its new community of impartial bike store companions. Roose additionally cites a number of different metrics to display the firm’s relative operational well being: 

• Cowboy stock is down 50 % from a 12 months in the past and its working capital place is steady.
• Cowboy is reaching 40 % gross margin on new bikes offered.
• Production prices are down 20 %.

So, whilst you would possibly not like Cowboy’s worth enhance, that coupled with operational efficiencies throughout the board might be the distinction between your costly e-bike operating for years, and, nicely… VanPoof! [Editor’s Note: credit score to ex-Verge Dieter Bohn for sliding that and “VanOOF” into my DMs on the day VanMoof declared chapter.]

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

“While a lot of individuals will be quick to jump guns and criticize VanMoof, I think they still deserve some recognition for their achievements,” wrote Goretti on Linkedin. “They have helped change the face of the industry and the perception of e-bikes since they started 14 years ago (!). They made it cool when it was a product mainly used by our grandparents. They truly had a positive impact on cities and not a small one.”

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