FLX Bike

Growth Stage

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Analytics

Raised to Date: Raised: $389,822

Aggregate Commitments $

Platform

StartEngine

Start Date

12/01/2021

Close Date

02/28/2022

Min. Goal

$10,000

Max. Goal

$4,999,995

Min. Investment

$254

Security Type

Equity - Common

Funding Type

RegCF

Series

Seed

Pre-Money Valuation

$54,990,000

Rolling Commitments $

Status

Active

Reporting Date

01/19/2022

Days Remaining

40

% of Min. Goal

3,898%

% of Max. Goal

8%

Likelihood of Max
unlikely
Avg. Daily Raise

$7,956

Momentum
cold.svg
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Location

San Diego, California

Industry

Transportation, Automotive, Aviation, & Aerospace

Tech Sector

Hardwaretech

Distribution Model

B2C

Margin

Medium

Capital Intensity

High

Business Type

Life Style

FLX Bike, with a valuation of $55 million, is raising funds on StartEngine. The company makes high-quality electric bicycles and provides dedicated customer service through its direct-to-consumer model. The electric bike of FLX Bike looks and performs great and is sleek, fun, and comfortable. FLX Bike has generated $29.3 million in cumulative revenue since its launch in 2016 and reported a 504% year-over-year growth from 2019 to 2020. Robert Rast founded FLX Bike in September 2016. The current crowdfunding campaign has a minimum target of $9,999.72 and a maximum target of $4,999,995.36. The campaign proceeds will be used for growth and expansion.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$7,885,553

$1,561,959

COGS

$4,600,753

$1,134,730

Tax

$0

$0

 

 

Net Income

$139,929

$-328,867

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$6,996,676

$258,762

Accounts Receivable

$440,723

$26,477

Total Assets

$9,793,822

$825,131

Short-Term Debt

$10,001,860

$1,160,504

Long-Term Debt

$0

$0

Total Liabilities

$10,001,860

$1,160,504

Financials as of: 12/01/2021
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Ratings KingsCrowd Startup Rating Methodology Article

Analyst Report Analyst Report Methodology Article

Synopsis

Electric bikes (e-bikes) have skyrocketed in popularity over the last several years. Experts say there are several trends motivating the sudden demand for e-bikes. First, lithium-ion battery technology has advanced to the point that bike-sized batteries are now effective and affordable. Second, urban cycling has become much more popular in the last several years. More broadly, there’s soaring interest in last-mile transportation alternatives to cars and public transit (note the rise in “micromobility” startups like Bird and Lime). Companies that rent e-bikes and scooters in cities allow people to test-drive e-bikes before committing to purchasing one. In total, Americans bought around half a million e-bikes in 2020 – more than double the amount of electric cars purchased in that period. And that trend seems unlikely to slow down. 

FLX Bike hopes to own a slice of this booming e-bike market. The company manufactures a variety of e-bike models and aims to sell the “BMWs of e-bikes.” With sleek designs that resemble non-electric bikes (cutting out the clunky battery attachments and cords common to other models of e-bikes), plus high-quality product design and direct-to-consumer distribution, FLX Bike hopes to build a cutting-edge brand in this emerging market. 

FLX Bike’s current StartEngine raise has been rated a Deal to Watch by the KingsCrowd investment team. 

Price

FLX Bike is offering equity at a $55 million valuation. This price is relatively attractive given FLX Bike’s traction thus far. The company has generated almost $30 million in revenue over the last five years. In 2020, FLX Bike brought in more than $7.8 million in revenue and made a small profit with a $139,929 net income. FLX Bike has made all of this money without taking on outside investment. Kickstarter-type crowdfunding campaigns brought in millions of dollars in presales that funded the development of FLX’s electric bikes. In sum, FLX Bike has generated impressive customer demand, managed capital efficiently to make a profit without outside investment, and seems to be on an upward revenue trajectory. Based on the company’s 2020 revenue, a $55 million valuation implies a revenue multiple that is slightly too high for a physical goods business, but otherwise, FLX Bike’s price is mostly on track.

Market

FLX Bike is operating in a booming electric bike market. Americans bought roughly half a million e-bikes in 2020 alone, as the pandemic drove interest in alternative transportation options and new ways of enjoying the outdoors. While this pace of demand may slow after the pandemic boost, e-bikes are likely to continue growing in popularity. Climate change is an increasing concern, and reducing one’s carbon footprint by biking rather than driving will likely garner more interest in the years to come. Roads are growing more congested, and e-biking can be quicker and more pleasant than sitting in gridlock. Plus, conscious health and fitness is a growing trend, and e-bikes offer an appealing balance of exercise and battery-powered assistance. For all of those reasons, analysts predict that the e-bike market will continue to grow in coming years. The global e-bike market was valued at $16.9 billion in 2020. By 2028, the market will hit $52.4 billion worldwide, with a strong 16% compound annual growth rate over the next seven years. 

E-bikes are trendy, and there are a number of startups attempting to offer the “best” e-bike. FLX Bike is unlikely to achieve total market dominance given this competitive landscape. However, the company is a relatively early player in the e-bike market. And FLX Bike is positioned to generate substantial value from its niche of high-end e-bikes as the market continues to grow.

Team

FLX Bike was founded by Rob Rast, a serial entrepreneur. Rast spent some time at UC Irvine working on a degree in mechanical engineering but dropped out of college to move to China and become an entrepreneur. While living in Asia, Rast developed a sourcing and logistics business for trade between the US and China, and he spent a couple of years in junior roles at a petroleum company. FLX Bike appears to be Rast’s first large business, but he is simultaneously working on another electric transportation brand that manufactures e-skateboards. Rast reports that he spends roughly 50 hours per week on FLX Bike and 20 hours per week on the skateboard company. Though he devotes most of his time to FLX Bike, Rast’s divided attention is not a promising signal for the company.

FLX Bike also has a small team of marketers, supply chain managers, and customer service representatives. While roughly 15 to 20 employees are listed on LinkedIn and FLX Bike’s “About Us” page, FLX Bike’s 2020 salary expense of less than $300,000 signals that many of these employees are part-time.  

Rob Rast seems to be an enthusiastic entrepreneur with years of experience building scrappy, capital-efficient brands in both Asia and the US. But he doesn’t have a deep business background or any prior entrepreneurial successes. The FLX Bike team doesn’t include any other senior leadership that fills in those gaps. Therefore, FLX Bike’s team isn’t overly strong.

Differentiators

FLX Bike’s major risk is lack of differentiation. There are a wide variety of companies selling electric bikes, and almost all of them say they offer the best designs, best battery life, etc. FLX Bike designs bikes that look sleek, like regular bikes – without the clunky battery attachments and cords of other e-bike models. However, it’s not clear that customers actually care that much about a subtle design. 

One of FLX Bike’s only obvious differentiators isn’t promising: its products are more expensive than many competitors’ products. FLX bikes cost anywhere between $1,899 and $7,099, and many appear to take a long time to ship. A quick Google Search yields many e-bike alternatives that are closer to $1,000 or $1,500. FLX Bike is trying to be the “BMW of e-bikes,” so mass-market pricing isn’t necessarily strategic. However, higher-than-average prices may hurt FLX Bike’s ability to compete in this crowded e-bike market. 

All in all, FLX Bike is competing fiercely for a sliver of market share as more and more companies begin offering e-bikes. Without specific competitive advantages, FLX Bike isn’t very defensible.

Performance

FLX Bike has generated impressive revenue since its launch in 2016. In total, the company has brought in almost $30 million in revenue without raising any outside capital. Year-over-year growth was particularly strong in 2020. Revenue was more than $7.8 million that year, up from just $1.5 million in 2019. In addition, FLX Bike was profitable in 2020, with a net income of roughly $140,000. A great deal of FLX Bike’s revenue (roughly $15 million of its lifetime total) has been the result of buzzy Kickstarter presales. Eager customers prepay for their electric bikes, then wait a long time (seemingly more than a year in many cases) to receive their product. But the wait is apparently worth it, as FLX Bike has solid customer reviews and testimonials online. Continued demand is keeping certain models out of stock on FLX Bike’s website. 

FLX Bike has been far more successful than most startups in creating a brand, building buzz through crowdfunding campaigns and generating revenue efficiently. It’s unclear whether FLX Bike will be able to maintain this momentum outside of the pandemic and outside of specific crowdfunding campaigns, but all signals thus far indicate that FLX Bike excels at acquiring customers and delivering high-quality products.

Risks

FLX Bike is a relatively low-risk investment because the company has been generating meaningful revenue for several years and has already established a supply chain with which to manufacture and deliver products, even weathering the supply chain challenges of 2020. The main risk factors are funding and time. Thus far, FLX Bike has conducted presale campaigns to generate funds to manufacture new product lines, which then take a long time to be delivered to customers. This strategy could spread out new product launches too much, leaving FLX Bikes struggling without steady capital.

Bearish Outlook

FLX Bike has demonstrated impressive success over the last several years, but it’s impossible to guarantee whether that success will continue. The biggest concern about FLX Bike is that the electric bike market is extremely competitive, with many new entrants and legacy players trying to win market share. FLX Bike isn’t strongly differentiated from these other brands, and it’s unclear how FLX Bike will sustain growth in the long term as the market grows more fragmented. Without distinctive products or a more innovative business strategy, FLX Bike will need to outperform its competitors. Investors might worry that the company’s relatively inexperienced founder, who also runs another startup, and small team aren’t up for this long-term execution challenge.

Bullish Outlook

Millions of people are buying electric bikes, driving rapid market growth. The flood of interest in this market means that FLX Bike faces stiff competition from other companies, which is worrisome. However, the booming e-bike market also creates room for FLX Bike to succeed alongside a number of other e-bike companies. The core tailwinds propelling the popularity of e-bikes are unlikely to die down anytime soon, and FLX Bike is catering to exactly the type of customer looking to reimagine their commutes, leisure rides, and more.  

FLX Bike was a relatively early entrant to the e-bike landscape and has already proven that it can drum up millions of dollars’ worth of interest from eager customers around the world. Generating roughly $30 million in revenue over the last five years is no small feat. Clearly the FLX Bike team is doing something right with product development and brand building. With several new bike launches on the horizon, FLX Bike will likely extend its streak of buzzy product introductions that push the company closer to the top echelon of e-bike sellers. Investors can get in now at a relatively fair price, given total revenue traction. In coming years, they can hopefully sit back and watch as FLX Bike helps define the next era of transportation.

Executive Summary

FLX Bike is an electric bike brand that has generated almost $30 million in lifetime revenue from its high-end e-bikes, which it bills as the “BMWs of electric bikes.” FLX’s bikes are sleek and stylish with designs built for the mountains or the city. Investors should note that FLX Bike faces stiff competition in the e-bike space. There are a wide variety of other companies promoting sleek-looking e-bikes, many of which are cheaper than FLX Bike’s products. FLX Bike is led by a solo founder who is working simultaneously on another electric transportation company, which might be a challenge as FLX Bike struggles to compete in this space.

However, FLX Bike has operated with increasing success over the last five years (as a relatively early entrant in the e-bike market), and its products still seem to be in high demand. FLX Bike has hosted five successful crowdfunding campaigns to presell its products. Plus, the company made a profit in 2020 and has never taken outside investment. While its current valuation is a little above average, the company’s performance makes it pretty fair. The e-bike market is a decent size and is expected to grow rapidly. As demand for e-bikes continues to soar, FLX Bike seems well positioned to rake in even more revenue at a strong profit margin. Therefore, FLX Bike has been rated a Deal to Watch. 

For questions regarding the KingsCrowd analyst report or ratings for this company, please reach out to support@kingscrowd.com

Analyst report written on December 17, 2021.

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FLX Bike on StartEngine 2021
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Platform: StartEngine
Security Type: Equity - Common
Valuation: $54,990,000

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