Kiwi electric motorbike maker Ubco raises $14m, targets US

Electric motorbike maker Ubco has raised US$10 million, earmarked for expanding its US presence and developing two new models.

The Tauranga-based company first made a splash when it hit Fieldays in 2015 with its first model, an all-electric utility bike that appealed to farmers because its silent-running was animal friendly, and the engine with almost no moving parts meant no running costs. It helped, too, that the removable battery could also be used to recharge power tools. The lack of noise also drew conservation and tourism clients. But with a top speed of 35km/h, it was too slow for roads.

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Three years later, Ubco released its first road-registerable model, the 2X2 ADV, which could hit 50km/h, with a single-charge range of around 120km and a hot-swappable battery. (In legal terms, Waka Kotahi/NZTA puts the ADV in the same class as a 50cc moped, meaning you don’t need a motorcycle license to ride one; a car or learners car licence suffices.)

Now Ubco has a model in the works that will be able to hit 80km/h, giving it access to arterial roads. That should broaden appeal overall, but Allan says it’s especially been a request from potential postal service customers (the CEO doesn’t want to comment further, but a fundraising document referenced talks with Australia Post.

A Covid shift in Ubco's favour

The 80km/h model should hit showrooms by year’s end.

Next on the list is a quad bike – a long-held Ubco dream. The 4X4 should expand Ubco’s core farm utility bike business, but it could also open up other areas. Ubco has long eyed the spot in the local market currently occupied by NZ Post’s 500 electric golf-caddy style four-wheelers made by Norway’s Paxster – which cost 131,390 krona ($24,000) each at today’s prices. At this point, there’s no ETA for Ubco’s 4X4.

Allan says the pandemic has caused supply chain and shipping challenges for Ubco, which makes its core electronics and cloud software in NZ, but uses contract manufacturers in China and Taiwan. A bike ordered today could take six to eight months to arrive.

But on balance, the outbreak has dramatically broadened Ubco’s business, the CEO says, because of the boom in on-demand food delivery, which he sees persisting beyond pandemic.

Uber Eats and Deliveroo drivers have bought bikes, but the key breakthrough has been an expansion of Ubco’s business with Domino’s, an early client for its new “Netflix of e-motorbike’s” subscription service – which sees an Ubco bike leased for around $300 a month, inclusive of maintenance and any battery costs (Allan says a battery should last 70,000 to 100,000km, so replacing them hasn’t actually been an issue yet for his young company).

Ubco in the cloud

Domino’s NZ – a long-time Ubco pilot customer – now has 50 Ubco bikes under the new subscription plan, while the pizza giant’s UK operation has just begun a trial.

The bikes all have GPS transmitters that feed mechanical and location data to a cloud-based dashboard developed in NZ by Ubco. That allows corporate customers like Domino’s to track the location of deliveries in real-time, and get instant alerts about any prangs that a driver, let to their own devices, might be too sheepish to report. A consumer version is of the software works for farming families with multiple bikes.

Ubco is also planning a new battery console, which will make it easy for urban riders to charge their smartphone and other gadgets from their bike.

The great leap forward

Longtime followers of Ubco will know the company has had a string of small funding rounds, and at times it hasn’t been clear if it would get out of second gear (a metaphor that’s a bit of a stretch in its market; like electric cars, electric motorbike have no need for a clutch).

But Allan says the pandemic boost will see sales top $3m in the current year “and we have a bunch of back-orders.”

Next year, he sees sales in a band between 1700 and 2300 bikes, which he says will bring in revenue between $12m and $20m, depending on the final volume, plus the models and accessories shipped.

(Ubco’s bikes cost between $7500 and $8600, including the battery. An extra, hot-swappable power supply costs between $2250 and $2850, in keeping with the rule-of-thumb that its battery array accounts for around one-third of the cost of any EV.)

The EV boom has seen all-comers try their hand at electric motorbikes, from Harley-Davidson to new contenders like Zero and a dozen other startups.

And the likes of Domino’s are also experimenting with e-bikes and other lightweight mobility options (many of which are also pumped out by Ubco’s Chinese contract manufacturer, Yadea) and out-there options like drones.

But Allan says his company still the only real contender in the farmbike/utility bike niche, which runs to some 175,000 unregistered farm bikes in NZ alone.

Long-term, his goal is for Ubco to hit $100m revenue from an addressable market of $1.4b as the electric motorbike market grows by a factor of 10 over the next few years.

US investors climb onboard

The US$10m raise saw three new investors come onboard: US venture capital funds Seven Peak Ventures and Nuance Capital, plus Taiwanese manufacturing giant TPK Holdings. It also so local, existing investor GD1 and wholesale investment partners Snowball Effect and Enterprise Angels chip in more funds.

Dino Vendetti, managing director of the Oregon-based Seven Peak Ventures, said: “Ubco has responded to a global opportunity as the adoption of EV accelerates and customers demand more sustainable and safe transport options. The US market has huge growth potential across many applications and we’re looking forward to supporting the team as they grow into a global category leader from NZ.”

The raise was pitched as a convertible note stepping-stone to a US$20m Series B round at a $50m valuation.

Minority shareholders include Ubco founders Daryl Neal and Antony Clyde, Crown VC outfit NZ Growth Capital Partners, and Straker Translations founders Grant and Merryn Straker.

March this year also saw funding from The Carbn Group, which went toward developing Ubco’s new subscription service.The Carbn Group, bankrolled by the Government’s Green Investment Finance fund, pursues various initiatives to encourage the adoption of electric vehicles.

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