Cowboy shows compelling resilience in a turbulent e-bike market

I quite like a pun, and when the CEO of an e-bike company describes their year as "a hell of a ride", you know I am all for it.

It's been a tough year in many respects for mobility as a sector, including bikes.  

But Cowboy has managed to achieve substantial progress despite the challenges. I talked with CEO Adrien Roose to learn more. 

2024 has seen some substantial losses. Despite raising over €170 million, in the last 3 years the VanMoof global holding made a total loss of €129 million. It declared bankruptcy and despite acquisition by McLaren Applied-backed e-scooter maker LAVOIE, creditors are unlikely to see much of their funds returned. 

Additionally, Finnish e-bike drive system Revonte has filed for bankruptcy.

While your main competitor going bust might sound like good news, bike manufacturers are part of a bigger movement committed to getting people out of their cars and into the saddle. 

Regarding VanMoof, Roose was respectively taciturn, but he did assert:  

"We wish them well, but I think it's gonna be a tough comeback for them. 

They were a team of roughly 700 people, and new owner will reduce that significantly.  A lot of people haven't been paid right on the supplier side or even customers. And so that's a lot of negative momentum right now."

Bucking the trend

Cowboy has been able to (excuse the pun) buck the trend.

It launched the Cruiser range, added new features, secured €13 million in additional financing in April from existing institutional investors and crowdfunding, gained some industry heavy hitters as board members, and had its first profitable month in July. 

Roose explained that the company set a challenge at the beginning of the year to go from a company that developed great bikes and grew fast to one that was profitable and cash flow positive. 

“But I'm quite proud of our work, because we are now on track to achieve this goal in 2024.” 

"2023 was a transition year from loss-making to profitability. So now in 2024, we have to demonstrate profitability and a positive cash flow. So it's going to be the year where everything comes together."

Roose notes that the industry is massively overstocked: 

"Some of the largest players still have 18 months of inventory. So it's going to take at least another year for the industry to get back to normal."

And while many companies are downsizing to save costs, Roose notes that at Cowboy "there isn't much to downsize, we were always tiny."

"The story is that we transformed the margin we are making on each bike, increasing our gross margin to above 40 percent on our latest model, the Cruiser."

The company has always invested in design, engineering, performance, and quality, preferring a limited product portfolio to justify the investment cost. 

Roose asserts that:   

"That's a story that we all don't talk about too much. 

Most talk about innovation is about customer-facing wins, but everything goes on behind the scenes regarding supply chain optimisation and manufacturing technologies. And that's what makes this business work."

However, Cowboy still has the challenge of growing overall profitability, especially as it stopped selling the Cowboy 3, a significant revenue contributor over the last few years. 

There's also the reality that electric bikes may be cheaper than cars, but they are still a sizable outlay for most people.  

Roose agreed: 

"That was one of the main reasons I started this company, to make better products. 

Part of making a product better is also to make it more accessible and cheaper. 

But it takes time. It took Tesla years to launch its most affordable model, Tesla 3.”

Roose points out that car ownership is on a downward trajectory.

 "The number of cars for European households went from 12 million to 9 million a year. And e-bike sales went from 3 million to 6 million a year. 

— I don't think that's a coincidence."

The power of seasoned entrepreneurs 

Recently, Cowboy strengthened the company's governance with global e-commerce and healthtech heavyweights:  Harpreet Singh Rai, former CEO of Oura, will now serve as a board member and Kevin Cornils, former Chief Commercial Officer at Peloton, joins Cowboy as Strategic Advisor.

Roose shared: 

“It's been an interesting journey for me as a CEO and entrepreneur. Most founders start with two or three co-founders, and then, with each funding round, they begin adding investors to the board, and that's always been, that's always been the case for me as well.  

I've felt — and this is something that I actively openly discussed with my investors, and they were very supportive --- that despite the best intentions, investors are founders don't always fully understand each other. 

Simply put, most founders have never been investors, and most investors have never been founders, right?"

The new board members can help make the dynamic more fluid between founders and investors and as Roose notes:

“Our new board members offer something quite rare. And having independent board members with an external view who have a couple of more grey hairs is helpful.”

I'd be remiss not to remember Karim, Cowboy's beloved co-founder, who died earlier this year aged just 36, following his cancer diagnosis. 

Without Karim there would be no Cowboy. His enduring legacy permeates every corner of our company, and his guiding principles to "Be optimistic and innovate" continues to inspire the company daily. 

Roose is reluctant to share much of the company's plans for 2024, but did share that some exciting launches are planned for spring and summer. Stay tuned for more news. 

Lead image: Cowboy's Brussels showroom. Photo: Uncredited.