Key Themes from Marquee Events in the Mobility Sector
Baird's Active Lifestyles, Fitness & Mobility team has attended two key events in the Mobility sector since the start of Q2. The Sea Otter Classic and EUROBIKE 2023 are both top events as it relates to the North American and European markets. Mobility is a key pillar within Baird’s Global Consumer practice, which has completed 6 transactions at $4 billion of transaction value since the beginning of 2021.
Several key themes dominated our conversations with companies and investors with an optimistic tone for future growth. Highlights include:
Mobility remains an attractive investment sector
- Significant underlying tailwinds remain, while the increased attendance at tradeshows provides a powerful anecdote on continued participation (2023 Sea Otter attendance up 8% from 2022, a new record high).
Up until 2023, mobility investment has outpaced the broader market
- Once current inventory subsides, we expect continued growth and investment in the category.
Current market woes are seen as a short-term lull
- The post-COVID acceleration has created a bullwhip effect that is still being felt in the Mobility sector.
- The crystal ball for most points to Q4 2023 while some don’t expect a full correction until 2024.
- Not all businesses will survive this challenging time, however, there are some brands that are separating themselves from the pack and continuing to grow through 2023.
Investors hone their focus on top-tier names
- Having clear differentiation, scale, positioning and the right to win within your businesses, are all keys to overall success.
E-bikes globally comp flat to positive out of COVID and we expect 2024 to return to 20%+
- The winners are becoming clearer, and we expect further consolidation within this segment going forward.
Strategic buyer interest is multi-dimensional and we expect it will appear differently coming out of the next wave of consolidation
- Each buyer portfolio has different gaps and goals that need to be managed.
- Auto, off-road and industrial platforms are stretching down from macro to micro-mobility.
- Some single asset investors are now looking in the current market to roll up new or add to a “house of brands.”
- Interest at our Baird Global Consumer, Technology & Services conference came from all angles as it relates to this sector.
- Knowing how to navigate these specific nuances is critical to achieving outlier outcomes.
Sponsors have a high interest in ways to play the mobility market upstream and downstream, including through:
- Clothing and accessories
- Adjacent componentry and drivetrains
- Services, repair and leasing
- Technology, IOT and digital growth
- Retailers, e-tailers and used/re-commerce market
“Shared mobility” is intriguing, but few business models have proven profitable
- Unit economics and the ability to scale internationally are key questions as it relates to including this in your business model.
- We expect that the committed players will emerge with scale in the foreseeable future.
No winner yet in consumer-facing UI and analytics
- We see that some brands are closer than others and gaining momentum.
