Rad Power Bikes files for bankruptcy protection

Rad Power Bikes, the dominant electric bicycle brand in the United States, filed for Chapter 11 bankruptcy protection this week as it seeks to sell its company. The move comes less than a month after Rad Power announced that it could not afford to recall its old e-bike batteries It is classified as a fire hazard by the US Consumer Safety Commission.

Bankruptcy that was It was first reported by Bicycle dealerIt was filed in the U.S. Bankruptcy Court for the Eastern District of Washington, near the company’s headquarters in Seattle. Rad Power lists its assets as $32.1 million and liabilities as $72.8 million. Its inventory of e-bikes, parts and accessories amounts to $14.2 million. Bicycle dealer He says.

It’s an amazing reflection of The leading e-bike company in the United States. Mike Radenbaugh founded the company in 2015 after several years selling custom e-bikes to customers on the West Coast. Rad Power quickly evolved into more than 11 distinct models, including the fat-tire RadRover, the long-tail RadWagon, and the versatile RadRunner. Rad Power Bikes has raised a total of approximately $329 million across several funding rounds. Primarily in 2021With significant investments from companies such as Fidelity, Morgan Stanley and T. Rowe Price.

But in the wake of the post-Covid bike boom, Things are starting to go south. There have been supply chain disruptions, safety recalls, several rounds of layoffs, and executive rotation. Last month, Rad Power said it was facing “significant financial challenges” that could lead to its imminent closure without a cash infusion.

The Consumer Product Safety Commission’s warning appears to be the nail in the coffin. The agency warned that the company’s old batteries could “ignite and explode unexpectedly,” citing 31 fires, including 12 reports of property damage totaling $734,500. There were no injuries, but the company said it could not afford the recall.

Rad Power can still survive if it can find a buyer for its assets and brand. Dutch e-bike company VanMoof has managed to do just that Finding a buyer after its bankruptcy in 2023. and Belgian cowboy is in talks To be acquired by a French holding company that includes several bicycle brands. Rad Power will continue to work on restructuring its debts under the supervision of the court, in a statement Bicycle dealer She said she will continue to sell bikes and work with customers and vendors as she moves forward with the process.