Uncover the Essential Insights from Top Mobility Industry Events
Baird's Active Lifestyles, Fitness & Mobility team recently attended two key industry events in Europe and the US: EUROBIKE and PeopleForBikes – Bike Leadership Conference. We have also hosted our annual Private Company Consumer Conference, with multiple micromobility businesses presenting.
The below summarizes our key takeaways from these events – encapsulating the conversations we had with dozens of industry leaders, private equity and family office investors and strategic players across the automotive, cycling and technology sectors.
- Mobility remains a focus area
- New buyer groups are emerging
- Market backdrop remains a short-term headwind
- Winners are being separated from the losers - In brands, top names remain the priority
- Strong interest in electrified mobility
- Direct consumer relationship remains key
- Opportunities exist to own more than the frame
- Targets financial profiles
Mobility remains a focus area
Investors continue to identify the micromobility space as an attractive investment area, looking to play multiple secular themes: outdoor, active lifestyle, enthusiast consumer and sustainability.
New buyer groups are emerging
New pockets of capital are emerging and focusing on the space: family offices, wealthy individuals and non-cycling strategics who have identified micromobility – and particularly ebikes – as a key growth area. Strong interest is increasingly observed from Asian investors, who are seeing rapid growth of the cycling market in their home countries.
Market backdrop remains a short-term headwind
Many investors have cited the current state of the cycling market as detrimental to transacting in the short term and many strategic players remain focused internally. We suspect that new investors may seek clarity of “the new market normal” before they are able to underwrite their investment thesis in the cycling / micromobility space.
Winners are being separated from the losers - In brands, top names remain the priority
Investors have seen many deals in this new market environment and better understand the characteristics of premium assets vs. less attractive ones. Those criteria help in guiding buyers through their analysis and investment decisions and to an understanding that the winners will accelerate coming out of the backside of the pandemic. Investors seek global brands with clear differentiators (particularly around performance and design), with strong and clearly identifiable appeal to consumers.
Strong interest in electrified mobility
Investors believe in the long-term trend of electrified mobility and want to invest in the winners within this category.
Direct consumer relationship remains key
Especially post-pandemic, companies need to have a greater pulse on their end consumers to better inform everything from product development to supply chain decisions. Clearly, pure-play direct-to-consumer (DTC) brands have an inherent consumer connection but other brands should aim for some omni-channel consumer connection either through some DTC channel exposure, social media or owned retail.
Opportunities exist to own more than the frame
Consolidation provides unique opportunities to capture gross profit beyond the frame sale – e.g. frame + wheelsets + handlebars.
Targets financial profiles
A clear track record of revenue recovery and growth are required for any investment. Top-line growth rates are very category-dependent, but all investors are seeking proof of sustained, above-market top-line growth rates in the new market normal. A clear view on run-rate profitability is paramount.
Connect with Baird Global Consumer Investment Banking to discuss any of these takeaways in greater detail or see how they may apply to your specific business:
