Kid’s bike subscription service Bike Club is gearing up for national and European expansion after closing £16.75 million in new investment.
The Bike Club, which is chaired by Mike Balfour OBE, founder of Fitness First, has now received this cash injection as part of a Series B funding round. Leading the investment is Circularity Capital, a private equity firm specialising in circular economy businesses, along with existing investor Codex Capital.
Founded in 2016 by James Symes and Alexandra Rico-Lloyd, the Bike Club offers families the chance to subscribe to new or refurbished bikes and scooters online and then exchange them as their child grows.
The monthly subscription programme, costing between £4.49 to £15.99 per month, currently has a network of 40,000 quality bikes and, with the new investment, puts it on track to climb to 220,000 over the next three years. Subscribers are now set to more than double to 80,000 in the next year.
Bike Club founder and father of three Symes, who was previously a special advisor to the chairman of KPMG, said: “The pandemic, together with the growing trend for health and wellbeing, has spurred a significant uptick in family cycling and demand continues to be at its highest level in decades. Bike Club is on a mission to disrupt family cycling meaning you never need to buy a kids bike again. We’ve seen traction across the country with different families using us to get outdoors and enjoy a healthier more active lifestyle.
“Getting your family cycling is a massive hassle and often quite wasteful. With our unique subscriptions we take away the pain of getting the right quality bike and make giving your child the best sustainable gift. Kids grow fast and at different times, it makes no sense spending £300 plus on a bike, joining Bike Club is the solution.
“We are focusing on family cycling and the junior market, but there is also an opportunity to help parents and other adults get onto bikes. Subscription makes a lot of sense when you really consider the hassle of ownership.
“The world is moving towards paying monthly, subscription and fractional ownership. We are seeing a lot of household staples and discretionary items move to this model, most cars are now bought on some kind of monthly payment, you pay your mortgage and rent monthly, you have a TV streaming subscription, it makes sense you will pay for kids bikes monthly and it’s just not worth owning them in the long run, considering how frequently they need to be exchanged for the next frame size.
“Our research tells us that if you put kids on a quality bike that’s the right size, they’re much more likely to take up and continue cycling throughout their formative years. Bike Club has been created to make the process of upgrading bikes easier and hassle free for parents, whilst giving kids the opportunity to enjoy all the benefits of cycling year-round.
“Children grow fast, making this year’s bike, next year’s headache. Not to mention the cost associated and the impact on the planet due to waste. To ensure they experience the benefits of riding the perfect-sized wheels, a parent would need to buy eight different bikes before their child has turned 12 years old.
“Cycling is one of the very best ways for children to get active, build confidence and develop vital skills that will benefit them throughout their lives. Yet, bikes can be a costly burden for both families and the environment and manufacturing just one bike results in emissions of 96 CO2* (kg) in greenhouse gases. And with around 12.5 million unused bikes in the UK alone, there are millions of sheds and garages across the globe that have become unnecessary graveyards for outgrown bikes.
Whether you’re worried about sustainability, and like the idea of subscriptions or you don’t want the upfront costs of a quality bike, but really want your child to be riding a lightweight, well-designed bike they’ll find fun and easy to ride; or you simply don’t have the space to store outgrown bikes for younger siblings, Bike Club’s subscription model offers families a more sustainable and accessible means of getting children cycling.”
Approximately 900,000 children’s bikes are sold annually in the UK with a €4.3 billion opportunity in Europe. The on-the-go cycling subscription service is on track to deliver £5.8 million of revenue this year, rising to £11 million next year with a current company valuation of £45 million. The Bike Club’s said its fastest-growing category is First Pedal (age 3-6 yrs), with a 76% increase in 2021 v 2020.
Customers can choose from a selection of bike brands including Frog, Forme, Strider, Woom, Puky, Squish and Isla.
David Mowat, partner of Circularity Capital, said: “As society faces climate change, we should work together to consume better, meaning we should rent better things and refurbish them. This is exactly the option Bike Club gives tens of thousands of families across the UK.
“Bike Club’s circular economy means less bikes need to be produced each year. Each of their bikes is saving 336kg CO2 versus an owned bike. So far, their fleet has saved 1,174 tonnes of CO2 versus ownership.”
Jamie Lawson-Brown, a co-founder of Codex Capital and board member of Bike Club, said: “Codex Capital and its co-investors, including Brett Palos Investments, first invested in Bike Club during the summer of 2020, a challenging time for all businesses being the height of the first C-19 lockdown.
“We have worked closely with management, including navigating global supply chain disruption, and today are a much stronger and very well capitalised business. Bike Club’s simple and convenient model offers customers flexibility to make the right choices for their children and their wallets, and the business is perfectly positioned given consumers’ increasing focus on the environment combined with financial headwinds in the form of fiscal tightening, energy price rises and inflation.
“We look forward to working closely with Circularity Capital and Management to build the business during its next phase of exponential growth.”