Interesting Investment
I received a google alert today that linked to this article mentioning that the Tech Coast Angels (the largest angel group in the world) funded BikeStation. The press release boasts their first “triple bottom line investment benefiting people, producing profit and saving the planet.”
First of all, with the economy and all, I’m stoked to see any press releases hitting the wire of companies receiving angel investments. However, I was very surprised to see TCA making an investment in what seems to be a high-end bike shop/storage station. Don’t get me wrong — I love the concept, but it doesn’t fit into the typical angel investment mold. Some of the questions that I have: how large is the market? What’s their sustainable competitive advantage? Will they really be able to return 10x the investment? How long will the station be relevant? Hey, it could just be a nice PR play.
I think that it is brilliant PR by Bikestation to push such a strong green message — it’s such a hot trend right now that even NBA bball players are wearing their green initiative t-shirts. In fact, I heard from an executive several weeks ago who told me that they tried raising investment capital for about 6 months without any luck whatsoever. Almost hopeless and ready to give up, they decided to go back to the drawing board and re-brand the company to be green. 2 months later, they again hit the funding trail and the reception was completely different and — you guessed it — they raised a few million.
I may not completely understand the investment, but I give props to the team at Bikestation and wish them the best of luck.
Comments(2)
Interesting, proves what the public is interested in. I think if you look at big cities across the world they are seeing a spike in alternative transportation. Not just because of the green effect, but shear convenience.. Maybe? Raising money in this market is tough for anyone, so you are right props to them. Staying in the mix during a tough time, I like hearing that as well. Good post, nice blog by the way..
It’s nice to see your post about Bikestation (www.bikestation.com) receiving funding from Tech Coast Angels (www.techcoastangels.com). You raise some interesting questions and we’d be glad to discuss them with you and provide more info, in case it’s helpful. Bikestation is the first and only truly turnkey solution for bicycle and alternative transportation and is the market leader in the space. While the individual Bikestation installations are staffed by bike shop experts, Bikestation as an organization offers a new way of viewing alternative transportation by making biking practical for more people. The typical barriers for bicycling for most people is the concern for theft and what to do with their clothing and belongings, and Bikestation addresses these needs. While “everyone wants a Bikestation” in their city or development, few want the responsibility and liability of building and staffing and managing one, therefore the appeal of a turnkey solution.
Bikestation is a proven model with a dozen facilities across the country and four new ones opening this year. Bikestation is already profitable today, and in fact, they had to raise their revenue forecast for 2009 since they’d already met 70% of their annual goal in Q1. The pipeline is full because of continuing strong demand from municipalities, developers and campuses. In many cases, cities and universities have made carbon-neutral commitments, and implementing a Bikestation is an easy way to meet those requirements. In other cases, a location has simply maxed out on car parking and adding a Bikestation allows them to accommodate more people. In addition, if developers install a Bikestation in a project, they may be able to significantly reduce their costs by reducing the number of car parks they must build. The business case for a Bikestation from a municipality’s or developer’s perspective makes a lot of sense and that’s reflected in the growing market demand Bikestation is seeing today, hence Tech Coast Angels’ investment in the company.
– Deborah Jones for Tech Coast Angels and Bikestation