April 17, 2024

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

Cowboy insists 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’re all wondering if Cowboy will be next to file for bankruptcy now that the era of free venture capital is over and profitability is key to survival. This week Cowboy introduced a cheaper, no-frills e-bike configuration before another price increase. Moves that have only intensified scrutiny of the boutique Belgian start-up.

However, Cowboy CEO Adrien Roose tells me that the electric bike maker is in a safer position, despite all the similarities.

For example, both European e-bike makers have netted millions from investors in recent years while suffering huge losses during periods of rapid expansion. Both focus on direct-to-consumer sales of premium e-bikes loaded with software and sensors assembled from lots of custom parts, and both Cowboy and VanMoof had to secure additional financing earlier in the year to deal with unexpected operational challenges in a post-pandemic e-bike market that had cooled dramatically.

From left to right: Cruiser ST, Cruiser and Classic.
Photo: Cowboy

This week, Cowboy launched a less expensive (but still not cheap) $2,990 / €2,490 “Core” configuration for the Classic, Cruiser, and Cruiser ST models that offer fewer features, like replacing the maintenance-free Gates Carbon belt drive with an oil chain drive, because it raises prices elsewhere. This is eerily similar to VanMoof’s product trajectory with the launch of the cheaper S4 mini after raising prices on its overstressed S5 flagship, all just two months before the company reported its dire financial situation.

Cowboy’s Core e-bike configurations only come in black, lack a wireless charger under the built-in phone mount, and ship with a slower charging brick. Tell Cowboy Dutch shining magazine That the upcoming price increase from $3490 / €2990 to $3790 / €3290 August 1st for belt-driven e-bikes (now called “Performance” configurations) was needed to “stay healthy” (more on that later). Those same e-bikes were priced at €2,490 when they launched in Europe two years ago and as low as $1,990 when first introduced to the US — when startups could sell their electric bikes at a loss due to the seemingly endless supply of investor capital.

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Cowboy aims to further justify the difference between Core and Performance configurations through software. Going forward, Cowboy e-bikes configured for performance will benefit from optional $300/€300 Cowboy Connect software features such as adaptive strength and crash detection, three new Google Maps features to share live ride information, alert the rider to upcoming hazards, and the ability to choose a route based on the best air quality. Cowboy Connect also unlocks the e-bike maker’s first Apple Watch app. I think it’s nice to have, but definitely not important for running an e-bike.

So, like VanMoof, Cowboy e-bikes are high-tech computers on wheels with a feature set that can, at times, border on gimmick. However, Cowboy wants you to know that’s different.

“Cowboy is in a very different position than VanMoof,” Cowboy CEO Adrien Roose insisted in an email with the edge. “Our key stakeholders, including investors, supply chain, distribution partners and our employees, fully support the business plan we are implementing.”

The big difference between Cowboy and VanMoof is the potential for profitability: Cowboy has repeatedly said it’s close, having posted EBITDA losses of around €21m over the past few years; But VanMoof has never been, reportedly losing nearly €80m in each of the past two years.

Last week, Cowboy issued a press release titled, “Cowboy on track for profitability with break-even as of Q3 2023.” However, Roose now tells me that the company is “on track to meet our goal of profitability for the current quarter, and on a full-year basis next year.” Of course, profitability can be 1 euro, but even that It would be a first for the six-year-old company after a history of losses. The year 2024 will definitely be profitable.

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Cowboy co-founder and CEO Adrien Roose on the C4, also known as the Classic at its launch.
Photo by Thomas Ricker/The Verge

Roose cites “meaningful revenue growth” for each month this year so far for his optimism about the quarter ending Sept. 30, as well as “strong sales” through July after launching the more upright and comfortable Cruiser e-bike on July 3. “We expect sales to exceed our target which will make it the best month of the year so far.”

Roose lists some other notable differences between Cowboy and VanMoof:

  • Cowboy has gathered close to its customers in Europe. (VanMoof e-bikes are assembled and distributed to customers from their factory in Taiwan.)
  • Cowboy has evolved from just a D2C company and now distributes its bikes through an expanding group of bike dealers and independent retailers. Through these bike dealers, the company is also transforming the aftermarket paradigm. (VanMoof’s direct-to-consumer support has been implemented almost entirely in about 50 brand-name stores in select cities, while Cowboy currently works with over 100 independent bike shops to sell, repair, and service its bikes with 200 more set to come on board in Europe this year.)

In order to “stay healthy,” Rose bluntly states that the August 1st price increase is necessary to ensure reasonable profit margins 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 stock is down 50 percent from a year ago and the working capital position is stable.
  • Cowboy makes a 40 percent gross margin on new bikes sold.
  • Production costs fell by 20 percent.
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So, while you may not like the Cowboy’s overpriced, that combined with operational efficiencies across the board could be the difference between your expensive e-bike running for years, and well… a VanPoof! [Editor’s Note: credit to ex-Verge Dieter Bohn for sliding that and “VanOOF” into my DMs on the day VanMoof declared bankruptcy.]

Despite the opportunity presented by VanMoof’s exit, acknowledged by Cowboy’s cheeky release of the Bikey app (which earned the company a lot of goodwill in the VanMoof communities), Roose seemed genuinely distraught over VanMoof’s death when I met him on a video call, a sentiment also expressed by fellow Cowboy co-founder and CTO.

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

RIP, VanMoof – you’ll always be my first.