No matter what cycling publication you read, you've probably heard some version of the following story that has been regurgitated en masse in the past 12 months:
While this may sound like a pretty terrible situation all round, it has actually worked out pretty well for some bike brands. So much so that we've seen a year of record sales, profits and stock prices for the brands that allow us access to them. A boom like this hasn't gone unnoticed by the wider world either. We've reported in the past month alone on Kona being bought by Kent
and the Accell Group securing a $1.56 billion price from a consortium led by the KKR Group
. Further back than that, Pon made a big play when it bought Dorel Sports
, and both Canyon and YT secured big private investments
. It's clear that money is flooding into the cycling industry, but what decisions are driving the sales of these bikes brands? Let's take a quick run down some possibilities:There's money to be made
As we outlined above, this boom is making money for brands. Investors want a slice of that pie for as long as it lasts. Hopefully this is a boom that they see lasting and investors hopping on board while the getting's good rather than hoping to flip a quick buck.eBikes
Sorry to break it to you if you're an eMTB detractor, but battery-powered bikes are driving the industry forward at the moment. While giant multi-nationals probably aren't paying attention to who is winning the EWS-E, they definitely are looking at the changing ways people are getting around cities. E-bikes, electric scooters and electric cars are the transport of the future and rather than start from ground zero, investors want to own companies that already have a foot in the door. Porsche buying a majority stake in Greyp
and investing in Fazua
is a perfect example of this.Brands need the cash
Brands currently have a lot of cash tied up in pre-orders and stock cash tied up in inventory - cash that could be used to get more sales, price its products more competitively or continue funding R&D, marketing and more. For small to medium sized brands, investment could be the only way they can actually capitalise on the promises of the bike boom.Bigger brands can help with operations
Those same brands may also not be equipped to deal with the current demand they're experiencing. When DT Swiss bought Trickstuff
, it mentioned how it would use "its knowledge in business model development, IT infrastructure, supply chain management and production optimisation" to benefit the brake manufacturer. In Trickstuff, you had a brand with a great product that was falling behind in logistics and operations but that will now be buttressed by DT Swiss. With other brands, investors could grant them access to new markets, help them set up e-commerce or share technical information to help them grow.
Regardless of the reason for investments, is any of this good for cyclists? Well, sorry to dodge my own question, but really that remains to be seen. I personally believe if the bike boom is managed sustainably, it will lead to a better future for cyclists of all stripes. However, if we let the bubble burst, mountain biking could be looking at a slump similar to the one skateboarding had in the 2010s. Whatever happens, we'll be following the situation with interest and keeping you updated.