Backing Dance

“One of the barriers to bicycling across the ages is anxiety about a thing with 100 moving parts: people worry, ‘How do I store it? How do I fix it?” BBC, 2020

We are very pleased to announce that we are now supporting Dance in their mission to democratise the use of electric bikes for commuting. Here are a few points to explain why the e-bike subscription market is about to explode and why the team led by Dance is best placed to dominate it.

Dance provides an electric bike subscription service intended to remove frictions out of e-bike ownership :

• friction to buy;
• friction to repair;
• friction to protect from theft.

The company offers a monthly subscription service with an e-bike, bike-concierge and an application that helps users track, share and control their bike when not riding and snap it into a powerful ride dashboard while on road. Repair on request and insurance against theft are included in the subscription price.

We are witnessing the creation of a favourable environment for the emergence of long-term rental of electric bikes:

• Growing european ebike sales are hitting a new level of acceleration and exponential growth : 5,2m ebikes sold in Europe in 2020 : +42% compared to 2019. Ebikes are eating the multi-billion bike industry and are set to overtake regular bike sales: half of all bikes sold in Europe will be electric by 2025. Amsterdam and Copenhagen are often used as examples to see what the future urban transportation looks like : 50% of all trips are made by bike.

• Consumer behavior is shifting rapidly: based on a recent McKinsey survey of consumer-car-buying behavior during the pandemic, nearly 70 percent of mobility users in the United States, United Kingdom, Germany, France, Italy, Japan, and China said they would choose to walk or bike at least weekly even after returning to normal life. Bike is the fatest mode of transport for trips under 10km. 2x more ebikes than passenger cars are expected in the EU by 2030. Covid19 accelerated this trend: hygiene and physical distancing encourage consumers to use micromobility, rather than public transportation, for short trip :

• Subscription services are rising and the ebike industry is a perfect target. We can witness the emergence of a new generation of consumers that prefer access over ownership and don’t want the responsability and the maintenance concerns : in the last nine years, the subscription economy has grown nearly 6x (more than 435%). In addition, subscription businesses have grown, in many cases, 5–8x faster than traditional businesses. The priority for consumers is now often to easily access the experiences they desire vs. actually buying the product to have that experience. The majority of e-bikes on the market today have some combination of poor design, high upfront costs, and cumbersome maintenance. Shared ebikes are not the answer as they are too expansive and unreliable for daily use. SwapFiets with its 200,000 customers focus on low cost non-electric bike rental and proves that the market is growing.
• Cities deincentivize and regulate private car travel while investing in bicycle infrastructure as an alternative. In Paris for example, car traffic will be drastically reduced in the city center in 2022 under a plan by the city’s mayor. This is not the exception:

Milan has announced that 35 kilometers of streets previously used by cars will be transitioned to walking and cycling lanes following the lockdown.

Paris will convert 50 kilometers of lanes usually reserved for cars to bicycle lanes. It also plans to invest $325 million to update its bicycle network.

Brussels is turning 40 kilometers of car lanes into cycle paths.

Seattle permanently closed 30 kilometers of streets to most vehicles, providing more space for people to walk and bike following the lockdown.

Montreal announced the creation of more than 320 kilometers of new pedestrian and bicycle paths across the city.

We are convinced that Dance is the best placed player to leverage this market and to become the category leader :

• Dance focuses on a premium but mass-market offer (“Apple for e-bikes”). It targets urban professionals who are looking for a sustainable and practical way to commute. This is a target group that is looking for a high quality connected e-bike with a complete service offer. Brands such as VanMoof or Cowboy have educated the market and proved that a premium demand exists. As subscriptions are a blind spot in the market due to the structure of the bicycle industry, a blue ocean is now opening up for similar quality bikes with a rental model intended to remove frictions out of ownership. The Dance pilot in Berlin clearly proved the product market fit.

• Dance is full stack and owns the entire value chain: bike manufacturing, application development, maintenance facilities and a team of field deployable technicians. This is crucial to maintain the quality of service that is at the heart of the Dance offer while optimizing operations (predictive repairs and maintenance).
• The team is exceptional and composed of serial entrepreneurs. Eric and Alexander are the co-founders of Soundcloud. Christian was founder and COO of Jimdo. They have strong experience in product, consumer, subscription, community and software. Their track record has allowed them to assemble a team perfectly suited to develop a category leader made up of former Apple, Jump, N26, Faraday Bikes…
• Dance is backed by 45 celebrities with a combined reach of 100m+ followers on social media, offering a potential to build a strong brand and community.

As the first bikes start to be deployed in Berlin and Hamburg, we are convinced that Dance will live up to our expectations: to become the leader in Europe and then to expand internationally. We are proud to contribute to the emergence of clean and liveable cities through the expansion of cycling.

Sources:

• The future of micromobility: Ridership and revenue after a crisis, McKinsey & Company, 2021
• The Subscription Economy Inde, Zuora, 2021
• Unece, 2021