Cycling is increasingly popular among businesspeople looking to replace golf with a more active way of networking and socializing. Several major publications, including The New York Times, The Wall Street Journal, and The Economist, have covered cycling’s rise among powerful deal-makers. However, as businesspeople travel extensively for work, they usually have to leave their bikes at home, since traveling with a bicycle incurs high airline baggage fees (though airlines have recently dropped prices) and risks damage to expensive bikes. 

The global bike rental market was valued at $1.37 billion in 2017 and is projected to grow at a CAGR of 14.3% between 2017 and 2025. The vast majority (77%) of this market went to docked bike rental services (the small banks of bikes often found on city street corners), which has established infrastructure in most major cities around the world. However, these docked, fatter-wheel bike services do not supply the high-end cycling bikes preferred by serious cyclists. Those bikes are dockless, and dockless bike rental services are projected to grow at a CAGR of 19% from 2017 to 2025. 

Of course, not only businesspeople hope to cycle when traveling (or seeking a fun weekend activity). Cycling is steadily increasing in popularity and as a means of transportation in a climate-conscious world. The number of cyclists or bike riders in the U.S. has increased from 43 million in 2014 to 47.5 million in 2017. As more and more Americans and global citizens fall in love with cycling, they are in need of a streamlined service to ride wherever they are without hauling their bike. 

Roula is a cycling company catering to traveling cyclists and urban cyclists around the globe. Roula’s business model is best categorized into two segments: in-person services offered from the company’s headquarters in Manhattan and online services offered in several cities around the world. 

Roula’s headquarters in Manhattan offers high-end bike rentals ranging from $65-$170 per day. Traveling cyclists can request that their bike be delivered to their hotel room for easy riding, or they can pick up the rental at the Roula location in the Hudson Yards development. Roula also offers group cycling experiences out of its NYC headquarters, operating several cycling tours each week for travelers or local enthusiasts. Finally, the company’s trendy headquarters location in Hudson Yards also serves as an event space for clients such as HSBC, Lululemon, and Strava. 

Outside of the company’s New York headquarters, Roula offers online bike rentals in Austin, San Francisco, Los Angeles, Miami, Barcelona, Lanzarote, and Tokyo. Cyclists can visit the Roula website to request a bike in their city. To supply these bikes, Roula partners with local bike rental shops and takes a 20% commission off of rentals generated from their site.

Since its launch in May 2018, Roula has serviced 359 bike rentals (215 of those in 2019). Roula generated $131,165 in revenue in 2019, sourced roughly equally from bike rentals and special events at the headquarters space. The company spent $146,123 in 2019, operating at a net loss of $14,958. 

Roula is led by CEO Mark Voysey, an avid cyclist who developed the concept for Roula after struggling to transport his high-end cycling bike on a trip. Voysey previously worked in international sports marketing for companies like Cunning Communications, the Union of European Football Associations (UEFA), and Sports International, Inc. He holds a bachelor’s degree in business and finance from Bristol, University of the South West. 

Aldo Diaz is Roula’s part-time COO and another avid cyclist. Outside of Roula, Diaz serves as the general manager for bike supplier R&A Cycles. 

Roula intends to devote the plurality (roughly 40%) of raised capital to staff expenses, after cutting a bulk of staff expenses in 2019 to improve profit margin. Another large portion of the raise will be devoted to rent for the NYC headquarters, with the remainder funneled into marketing and tech development. 

In the next year, Roula intends to roll out an episodic insurance add-on to insure customers renting bikes and guests participating in group cycling tours. Roula also plans to expand its partner network to offer more online rental services around the world, including in cities such as Nice, Melbourne, Milan, San Diego, Dallas, Boston, Chicago, and Atlanta. 

Roula is developing a mobile app slated for a 2021 release which would allow users to sign up for a Roula account, book bike rentals or reserve spots on guided rides, and manage bookings. Beyond the app release, Roula also plans to open additional in-person locations in biking hubs around the United States and abroad, including in Los Angeles, San Francisco, Miami, and/or London. 

• Increased popularity of cycling: Cycling participation is increasing worldwide, whether to boost health and fitness or as an alternative transportation method. Plus, cycling is increasingly becoming a form of business networking, similar to staples like golf and tennis. It stands to reason that these newly-minted cyclists are seeking a convenient way to ride while traveling, and Roula is poised to capture that interest in New York or numerous other cities worldwide.

• Diversified streams of revenue: While Roula has rented several hundred bikes in almost two years of existence, bikes don’t exactly seem to be flying off the shelves. It is therefore prudent for Roula to focus on several streams of revenue to stabilize the business while pursuing growth in the most opportune areas. In-person events at the company’s Hudson Yards headquarters are not exactly a compelling, proprietary revenue source, but they do keep the lights on while the company builds a brand in bike rentals and devotes resources to a tech-enabled bike rental platform (see next).
  
• Potential of a tech-enabled global bike rental platform: Roula’s true scalable revenue potential lies in establishing a network of bike rental services in cities small and large around the globe, all connected by a user-friendly mobile app and website to book rentals from anywhere. Roula is in the midst of developing such an app, which is a huge opportunity. While Roula doesn’t seem to be too focused on their tech potential (devoting a large portion of expenses to pricey NYC rent and few resources to tech development), ultimately the company may realize that global bike rentals are a more scalable source of revenue than in-person events and tours.
  

Roula has generated decent revenue in under two years of operation and has clearly staked out a niche in services for traveling cyclists and cycling-interested folks in New York City. While the company is currently devoting resources to maintaining an expensive headquarters location and offering many hands-on services (in-person events, cycling tours) that don’t lend well to scale, the company can ultimately translate its brand toward a larger tech-enabled bike rental platform that could generate millions. 

A viable avenue for growth and eventual acquisition may be partnerships with other travel or fitness brands. If Roula could mint a deal with a major hotel chain like Hyatt or Marriott to offer bike rental services for guests worldwide, that deal could represent a multi-million dollar revenue opportunity and eventually the opening to fold into Hyatt or Marriott’s portfolio of travel and lifestyle brands. It is difficult to envision Roula growing large enough to become a candidate for public offering, but modest acquisition from a related industry incumbent may offer a promising exit path for investors. 

Roula is creating a lifestyle brand focused on travel and cycling, areas experiencing growth in the modern globalized and fitness-focused world. Given early traction and diversified revenue that can sustain modest growth until a potentially lucrative technological solution is developed, Roula is a Deal to Watch.