March 3, 2024

Cowboy insists he’s not the next VanMoof as he 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 close to filing for bankruptcy now that the era of free VC money is over and profitability is key to survival. This week Cowboy introduced a cheaper no-frills e-bike configuration ahead of another price hike. Moves that only brought the Belgian boutique startup closer to scrutiny.

However, Cowboy CEO Adrien Roose tells me the electric bike maker is on a more secure footing, despite all the odds.

For example, both European e-bike makers have taken millions from investors in recent years while posting heavy losses during periods of rapid growth. Both focus on direct-to-consumer sales of premium e-bikes, software and sensors assembled from many custom parts, and both Cowboy and VanMoof had to secure additional funding earlier in the year to deal with unexpected operational challenges in a booming post-pandemic e-bike market.

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

This week, Cowboy launched a cheaper (but still not cheap) $2990 / €2490 “Core” configuration for its Classic, Cruiser, and Cruiser ST models that offers fewer features, like replacing the maintenance-free Gates Carbon belt drive with an oily chain drive, as it raises prices elsewhere. That’s very similar to VanMoof’s product trajectory when the scale-cheaper S4 launched after raising prices on its overwrought S5 flagship, all just two months before the company went public about its dire financial situation.

Cowboy’s Core e-bike configurations only come in black, lack a wireless charger under the integrated phone mount, and ship with a slower charging brick. Cowboy said Dutch-language Bright magazine that the upcoming price increase from $3490/€2990 to $3790/€3290 on August 1st was due to their belt-drive configurations (called “Performance”) e-bikes “staying healthy” (more on that later). Those same e-bikes were priced at €2490 when they launched in Europe two years ago and as low as $1990 when they were first introduced in the US – back when startups could sell their electric bikes at a loss due to the seemingly limitless supply of investor capital.

Cowboy aims to further justify the difference between the Core and Performance configurations through software. Moving forward, Performance-configured Cowboy e-bikes will take advantage of the other optional $300/€300 Cowboy Connect software features such as adaptive power, crash detection, and three new Google Maps features to share live trip information, alert the rider of upcoming hazards, and the ability to choose a route based on optimal air quality. Cowboy Connect also unlocks the e-bike maker’s first Apple Watch app. It’s nice to have, I guess, but certainly not critical to the operation of an e-bike.

So yeah, like VanMoof, Cowboy e-bikes are proprietary high-tech computers with a set of features that can, at times, border on gimmickry. However, Cowboy wants you to know that it is different.

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

The big difference between Cowboy and VanMoof is the prospect of profitability: Cowboy has repeatedly said it is close, having posted EBITDA losses of around €21 million over the past few years; but VanMoof never was, having lost almost €80 million in the last two years.

Last week, Cowboy issued a press release titled “Cowboy on track to breakeven profitability as of Q3 2023.” However, Roose now tells me that the company is “on track to meet our profitability target within the current quarter, and on a full-year basis next year.” Of course, profitability could be equal to €1, but even to which would be the first six-year-old company after a history of losses. 2024 would certainly be significantly profitable.

Cowboy co-founder and CEO Adrien Roose of C4, aka Classic is back at his launch.
Photo by Thomas Ricker / The Verge

Roose cites “significant revenue growth” for each month so far this year for its optimism for the quarter ending September 30, as well as “strong sales” through July following the launch of its taller and more comfortable Cruiser e-bike on July 3. “We expect sales to exceed our target, making it our best month of the year so far.”

Roose lists some other notable differences between Cowboy and VanMoof:

  • Cowboy meets close to its customers in Europe. (VanMoof e-bikes were assembled and distributed to customers from its factory in Taiwan.)
  • Cowboy grew from a purely D2C business and now distributes its bikes through a growing range of independent bike dealers and retailers. Through these bike dealers the company is also changing its after sales model. (VanMoof’s direct-to-consumer support was almost entirely done at about 50 branded stores in select cities, but Cowboy is currently working with more than 100 independent bike shops to sell, repair and service its bikes with 200 more scheduled to come on board in Europe this year.)

In order to “stay healthy,” Roose openly explains that the August 1st price increase is necessary to ensure reasonable profit margins for Cowboy and its new network of independent bike shop partners. Roose also cites several other metrics to indicate the company’s relative operational health:

  • Cowboy’s inventory is down 50 percent from a year ago and its working capital situation is stable.
  • Cowboy is achieving a 40 percent gross margin on new bikes sold.
  • Production costs are down 20 percent.

So, while you may not like Cowboy’s price hike, the difference between your expensive e-bike could be years, and, well… 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 that VanMoof’s exit presents, which was recognized by Cowboy’s hilarious release of the Bikey app (which earned the company oodles of goodwill in the VanMoof community), Roose seemed genuinely distressed about VanMoof’s demise when I caught up with him on a video call, a sentiment also shared by fellow Cowboy co-founder and CTO Tangietti.

“While many people will be quick to jump guns and criticize VanMoof, I think they still deserve recognition for their accomplishments,” wrote Goretti on Linkedin. “They’ve 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 have had a positive impact on cities and not a small one.”

RIP, VanMoof – you will always be my first.

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