Meta-trends like electrification, sustainability, and artificial intelligence are transforming the bicycle industry. This has led to an influx of young companies into the sector. But why is the bicycle industry currently so appealing to new firms and investors? We spoke with Elisa Chiu, start-up expert and founder of Anchor Asia / Anchor Venture Partners, a platform focusing on ecosystem building and venture capital for cross-border collaborations.
In recent years, more and more new companies have ventured into the cycling industry. Why is this the case? Why is the cycling world particularly interesting for start-ups these days?
Elisa Chiu: The surge in e-bikes has transformed traditional bicycles into connected two-wheeled wearable devices. With the integration of electricity, 5G, and IoT, bicycles have become a platform for numerous applications, generating data and business models that extend beyond the bikes themselves. Meanwhile, automotive companies are keen to secure a stake in last-mile transportation to maintain or expand their market share as consumer behaviours shift and mobility regulations evolve.
So all these changes are making the cycling world more exciting for investment?
Elisa Chiu: Yes, with this additional value proposition, e-bike-related “green tech” or “mobility” start-ups have suddenly become attractive and seemingly viable options for venture capital investment, drawing new stakeholders into this realm.
What are the big challenges for start-ups/investors that want to get into the bicycle industry?
Elisa Chiu: Building e-bikes is more challenging than it appears. The industry is full of nuances and specialised know-how, with a tightly-knit ecosystem where upstream and downstream companies work closely together. This close-knit community is relatively unfamiliar with the venture capital/start-up world, limiting the pool of suitable strategic partners and investors.
Start-ups and investors usually seek quick success. To what extent is this possible in the bicycle sector?
Elisa Chiu: It is. However, due to its structures, the bicycle industry usually requires a longer breath. Unfortunately, many new start-ups and investors lack the patience or passion to play the long game, especially if they are accustomed to the rapid product cycles and minimum order quantities (MOQs) of the consumer electronics industry. The Silicon Valley model of achieving hockey-stick growth through aggressive capital investment is difficult to sustain in this sector. When the tide recedes, many underlying issues tend to surface.
In which way is investing in the bicycle industry different from other industries?
Elisa Chiu: The bicycle industry is quite fragmented, with only a few multinational players possessing the capacity to establish corporate venture arms effectively. To put this into perspective, in 2023, the annual revenue of Pon.Bike and Giant Group, two of the largest companies in the bike industry, was approximately €2.3 billion each. Even among these larger players, the development of corporate venture capital (CVC) and corporate start-up engagement remains relatively limited compared to other sectors. However, I believe that, sooner or later, some industry leaders will find systematic ways to integrate external innovation with their existing heritage by collaborating more with start-ups.
What could help accelerate such processes?
Elisa Chiu: With these industry characteristics, cross-border and cross-industry collaboration will be crucial in ensuring sufficient deal flows and exit opportunities. Additionally, we need more patient capital and new structures, different from the traditional venture capital or private equity models, to foster long-term, mutually beneficial partnerships.
How can you help industry players take the next step in this area? Where can people meet you at Eurobike to learn more about this topic?
Elisa Chiu: Anchor Taiwan is a platform for corporates, startups and investors to harness ecosystem building and venture capital for world-positive endeavours. Since 2017, we’ve hosted global founders and executives from Y Combinator, 500 Startups, Microsoft, Uber, Intel, Dell and many more. Specialising in cross-border collaboration, we provide business advancement, technical exchange, and market and cultural immersion for our members by engaging with top industry leaders.
At Eurobike, I will host an event called “East Meets West: Connecting for New Frontiers in Global Cycling Innovation”, scheduled for Wednesday from 13:00 – 14:00. Also on Wednesday, I will be a guest at the “Investor’s Lounge” and host a talk about “Insights from deals in Asia: Investment and collaboration opportunities in the bike industry”.