Karma Bikes is a luxury performance cycling brand based in Seattle that is launching innovative carbon fiber ebikes based on award winning industrial design, internet of things technology and the highest end components.
Our recently launched Diavelo ebike is geared towards serious commuters, while the upcoming Jetset electric mountain bike will be positioned towards leisure riders and trail lovers. Our debut model, the Karma Launch Edition, will be available for pre-Order as of September 1, 2015. Karma Bikes is a founder-backed Seattle start-up with no debt, vast R&D resources and loyal customers worldwide.
Problems Facing the Industry
Most electric or “ebikes” lack real style or design.They tend to look like a bloated version of a regular bike, and feature a host of issues such as poor handling when driven without their power turned on.
These ebikes are heavy and cumbersome.Some weigh upwards of 90 lbs with even the most sleek models such as the Stromer or Specialized Turbo weighing in at 60-70 lbs.
The biggest challenge plaguing ebikes is quality.The cycling industry is rife with independent bike dealers (IBD) grabbing 35% in margins from brands and OEMs (Original Equipment Manufacturers). This means the majority of e-bike manufacturers use the least expensive components and materials, as they must maintain unit margins in relation to what the market bears, whilst still appeasing IBDs.
The Karma Bikes Solution
Karma Bikes produces high quality, functional and stylish electric bikes.Every Karma Bike is made of top quality carbon fibers and is meticulously designed in Europe to meet the highest industry standards set by tastemakers such as Red Dot, as well as leading industrial design houses and automotive brands.
Karma Bikes offers bikes factory direct. By cutting out IBDs and retailer margins, we can disrupt the market by exclusively ensuring a truly luxurious and quality product at unbeatable prices.
Our target market encompasses the rapidly growing leisure cycling and urban commuting market. The psychographics range from 28-55 early adopters, upscale shoppers and design-minded individuals. These people are often referred to as trend setters, taste makers and influencers. In general, our average customer also has great potential to become our brand ambassador as the product and message is inherently viral.
Our competitors are incumbent ebike brand conglomerates like Currie Tech and holding companies Accell Group and BMC that have a few brands focused on ebikes. In addition, Specialized and a new crop of specialty European brands are starting to play in the space. However, in the luxury, carbon fiber ebike market, we have little to no competition and thus a ‘blue ocean’ market opportunity.
Our team is comprised of design and marketing executives from Estee Lauder, Nordstrom, Accell Group and Automobili Lamborghini in addition to leading American bike designer, Taylor Sizemore, and German bike designer, Thomas Harter.
Our design principles are derived from high-performance electric automobiles like the BMW i8 and Tesla Roadster while our clean, aggressive lines originate from acclaimed European industrial designers who excel in technical luxury. The form, function and technology behind Karma Bikes work cohesively to produce the ultimate riding experience.
Our advanced carbon fiber expertise was garnered by working alongside leading experts from Automobili Lamborghini and BMW’s carbon fiber nexus. We have built a proprietary framework to rapidly evolve our frame, motor and battery technology to keep up with advances in materials available, hence making our products truly disruptive and leading edge at any price point.
Our marketing strategy revolves around viral marketing, selling products strictly via invitations and qualified referrals. We have a network of brand ambassadors, affiliates and influencers who will enable our larger customer base to test ride our bikes and get on a Pre-Order list to acquire one. Our global ecommerce launch early next year will make our products available more widely. Every customer will be on-boarded “by invitation only” hence we can control impressions, inventory and cash flow by only selling bikes we have in active production while managing back-orders.
We are a mobile first company. Our approach is to use mobile devices in every aspect of our customer’s journey- from mobile marketing, app-driven bike customization and iOS/Android based GPS, safely and trip information.
Karma Bikes sells factory-direct by leveraging an omnichannel distribution strategy. Regarded by those who know us as the ‘Warby Parker of Bikes’, most of our orders are pre-paid before they are shipped, directly or drop-shipped from our accessory and OEM partners. We have three prominent revenue drivers: Brand Affiliates that market products within our brand guidelines; flagship retailers like Nordstrom that showcase and sell our products within their merchandise mix in stores and online; and direct via our website, QVC or company owned pop-up stores.
Karma Bikes is seed funded by Fashion Fund and revenue positive with profitability anticipated by December 2015. We are raising expansion capital to launch our flagship retailer strategy and invest in greater performance marketing and R&D. We are also in the process of applying for non-dilutive grants in Canada, where we operate our Canadian business unit based in Victoria, British Columbia. The company has invested significantly in product development, marketing and R&D to ensure a smooth 2015 launch.
Karma Bikes is a vibrant new business category within the cycling industry- electric bikes. Competitive startups in the past 5 years have been snapped up by the leading holding companies- BMC Switzerland and the Accell Group Netherlands.
We are a far more tech-enabled, scalable business as we don’t rely on the linear growth that independent bike dealers can provide. Rather, we can grow exponentially using viral marketing, influencers and affiliates. We believe that we will track on a similar valuation and revenue trajectory as a Jawbone, Nest or Sonos. Our end acquirer could well be from outside the cycling industry- namely an automotive brand or large retailer looking to bring our products in-house.