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Rad Power Bikes CMO Ty Collins, left, and founder and CEO Mike Radenbaugh. (Rad Power Bikes Photo)

Seattle electric bicycle maker Rad Power Bikes announced a $25 million investment round Wednesday, led by Vulcan Capital and Durable Capital Partners LP. It’s the second major fundraising round for the e-bike company, following a private investment from online retail titans last year.

The investment is a milestone for the 13-year-old company and an unusual move for Vulcan, which typically funds more traditional technology startups. But Vulcan is just the latest tech investor to see something in Rad, which describes itself as the largest e-bike brand in North America by volume.

Rad will use the new cash to open additional retail locations around the world and expand the company’s delivery service.

“We found two groups of world class consumer and retail investors who believe in our vision and will help us surprise and delight our customers in new and exciting ways,” said Rad CEO Mike Radenbaugh in a statement.

Rad sells e-bikes to consumers and commercial businesses across the U.S., Canada, and Europe. It has taken advantage of the direct-to-consumer model to shorten its supply chain, bypass traditional bike shops and create a tight feedback loop with customers to regularly improve its limited line of e-bikes that sell for around $1,500.

It’s a model that attracted online retail vets Darrell Cavens and Mark Vadon. The entrepreneurs behind Blue Nile and Zulily invested an undisclosed sum into Rad Power Bikes in 2019 that the company’s co-founders described as “significant.” Rad declined to disclose the total it has raised to date.

“This is a rare investment in a U.S. based e-bike company,” Radenbaugh said. “There have been rounds of funding for bike and scooter share companies and smaller rounds for companies outside of the U.S., but to our knowledge, this is the first investment of its kind with this amount of funding from these types of firms.”

Rad Power Bikes is benefiting from growing interest in electric bicycles, the fastest-growing bicycle type in the U.S. Sales of e-bikes spiked 91 percent year-over-year in 2017. Deloitte predicts that e-bike sales will surge to 130 million in the next three years. The analysts believe e-bike sales will generate about $20 billion in U.S. revenue in 2023.

But the e-bike industry faces some vulnerabilities too. Electric bike and scooter imports were hit with a 25 percent tariff in 2018 as a result of President Donald Trump’s trade war with China. And the related electric bike-sharing industry, though heavily funded, remains untested. Bike-sharing startups in the U.S. and China have contended with layoffs, a shifting landscape, and in several cases shut down altogether.

Rad’s direct-to-consumer model appears to be insulated from the tumult of the bike-sharing industry, however. The company says it has sold more than 100,000 bikes across 30 countries. Rad’s team has been growing rapidly in recent years, moving into a new headquarters office in Seattle to make space for the new hires. Rad now employs more than 200 across Seattle, Vancouver, B.C., and the Netherlands.

Radenbaugh called the latest investment in Rad Power Bikes, “proof that this is a hugely growing category that’s finally being accepted as a practical and legitimate form of transportation.”

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