The pandemic ushered in the e-bike boom. But like many other pandemic trends, that boom didn't last long.
Last year, electric bike startups VanMoof and Cake filed for bankruptcy amid the doom and gloom of micromobility. Tia and Dot have merged. Superpedestrian has closed. Bird was also forced to restructure.
All of these startups may have had different goals, but their problems were pretty similar. Bloom, a Detroit-based startup, thinks it has the answer. The idea is to take all the hard behind-the-scenes work and let these startups focus on the exciting stuff like product design and branding.
Founders Chris Nolte and Justin Cosmides were so passionate about this idea that they packed up and moved to Detroit to build it. Nolte is bringing his one-year-old child and spouse, while Cosmides is bringing his four-legged companion Artie.
This is also becoming popular. Their customer list is as long as his CVS receipt.
“Everyone is trying to reinvent the wheel,” Nolte told TechCrunch in a recent interview. “But the reality is we have a proven system and people waste a lot of money making mistakes and bad decisions.”
Cosmides told TechCrunch that the “stupid and scary” influx of VC money into the space over the past few years has created a lot of waste and collateral damage. Bloom is the duo's answer to solving some of that.
Bloom, which was founded last year, will offer several core services including contract manufacturing, assembly, shipping, logistics and services. These are all tasks that startups would previously have had to find separate partners or take on in-house, both of which increase costs and reduce revenue. It's this extra effort that can spell doom for a startup.
“I remember saying, 'Who would be crazy enough to listen to this crazy idea I have?'” Cosmides exclaimed. “So I went to Chris and pitched him and he said, 'Oh, I've been thinking about this for a while.'
It may have seemed crazy at the time, but Nolte says about 30 companies will soon start working with Bloom. Cosmides said there are more than 100 companies in the pipeline, ranging from startups just past the prototyping stage to “very mature” players.
Much of the work will be done in a production space in Michigan, but the pair will work with partners in California, Ohio, South Carolina and New York. The goal is to launch her 200,000 square foot facility with delivery and assembly capabilities in Detroit.
They accomplished this with a little help and a team of only about 10 people, but they plan to roughly double that headcount when they close their first round of funding.
If all goes well, Nolte and Cosmides hope to not only help these companies build better businesses, but also set further standards in an industry that is currently very fragmented.
shared passion
Nolte is a veteran of e-bikes. In fact, he became interested in electric bikes when Barack Obama was still president.
He's a real veteran too. Nolte served a tour driving a fuel truck with the U.S. Army in Iraq. Then, after he suffered a back injury, he learned about pedal-assist electric bikes. He loved the technology and the idea of helping the country move away from oil dependence.
“We remain dependent on foreign oil,” he says. “I really started to believe in this idea that by using more human-scale transportation, we could alleviate the need to attend these events. [conflicts]”
Nolte started out as an early leader in a field called Propel Bikes. He also started his YouTube channel in 2019 to educate people about the industry.
“I ended up doing a lot of factory tours” for the channel, he says. “I wondered why there are so many factories in Europe, but so few bicycle and micromobility factories in the United States.”
Cosmides co-founded electric bike company Vela in 2020 after working at Barclays Investment Bank for about 10 years. He remembers looking at the micromobility industry and thinking, “We're financing these companies and vehicles all wrong.” (Vela is now run by a new group looking to leverage Bloom's network, he says.)
He says the industry was “overfunding companies that probably had very good Instagram and very good marketing, but they just didn't have the product, the development, the sales.”
Last year, the two found themselves looking for a way to solve a problem that was starting to plague some of the best-known micromobility companies.
The two found a home for Newlab in Detroit's new Mobility Innovation District in Mid-Michigan.
It's only been a year, but there's been a lot of bloodshed since they tried to launch Bloom. One of the most notable failures occurred with luxury e-bike maker VanMoof. The company filed for bankruptcy last July, leaving thousands of customers unsure about how their connected bikes work. Bird, a scooter-sharing company once worth more than $2 billion, filed for bankruptcy in December. (Both companies eventually emerged from bankruptcy under new ownership.)
The problems continued into early 2024, when electric bike and bicycle retailer Cake suddenly filed for bankruptcy and sold its U.S. inventory to a mobility shop owner in Florida. (The man is now one of Bloom's customers.)
All this devastation meant perfect timing for Bloom.
“You wouldn't have been able to do this two or three years ago. Everyone was interested in getting products off the shelves as quickly as possible,” Cosmides says. “But now we're at a moment where we're all asking, 'How can we avoid making the same mistakes?'”
Image credit: Dustmoto
bloom customers
One of the first companies to make the leap with Bloom is, perhaps unsurprisingly, a startup that wants to create products for thrill-seekers.
Colin Godby co-founded Dustmoto in 2023 with the aim of not only bringing electrification to dirt bikes, but also bridging the gap by launching an American brand in this space. This is something that didn't really exist thanks to the dominance of Japanese brands. such as Honda and Yamaha.
Until now, Dust had only created a few early prototypes. However, they have contracted with Bloom to use their production space in Detroit to build their next group of production bikes. Dust also leverages Bloom for final assembly, quality control, and fulfillment.
The difference between having Bloom help you with all of these parts of the process versus going it alone or finding a separate partner can be in the millions of dollars, Godby says.
“Instead of having to raise $40 million to build your first dirt bike, it only costs about $5.” [million] “We raised $10 million to bring this amazing product to market,” he says.
It's also less of a burden.
“If we're the ones handling it, it's all up to us, you know what I mean? We've got to hire more people, we've got to put in more hours, things like that. ” Godby says. “If that's shared with Bloom…as if the success of their company depends on them being able to make this happen.”
That trust didn't come quickly. The troubles began before Bloom had a chance to seriously engage with many prospects. After meeting with them late last year, Godby said he became wary of “layering startup risk on startup risk.” But the idea clicked when I learned how other industries rely on these types of intermediaries.
“Honestly, if you think of the most fun way to spend your time with Dust, it's not building a production environment,” he says. “And if you look at tier 1 suppliers and all sorts of other mature different industries, whether it’s aerospace or automotive, that’s how the game works.”
When it comes to Bloom's early partners, Scott Colosimo is on the other end of the spectrum. He spent over 10 years as CEO of a global motorcycle company called Cleveland CycleWerks. Colosimo told TechCrunch that he was trying to “gradually transition” from a gas car company to an electric car company.
“It quickly became clear that it was like turning a baker into a surgeon,” he says. “That's a little different.”
He got out of the gas bike business completely and started Rand, nominally an electric bike company. But the company is also, a little sneakily, an energy company built around connected, removable batteries that power bikes.
Land is heading in this direction because Colosimo says there's a huge opportunity, especially considering the often dire condition of e-bike batteries. And Bloom makes it much easier to try it, he says.
Colosimo said he is in talks with Bloom about building future bikes. The main reason for this is that Land already has space in his hometown of Cleveland, Ohio, equipped and ready to build his first bike. So what he really wants to do with Bloom is expand the battery platform designed at Rand and make it available to other companies.
“If we lived in a perfect world, I'd put $100 million in my bank account and just focus on batteries, and within three years I'd have a viable product.” he says. “Venture capital is not going to spend $100 million hoping to become a unicorn in three years. So the vehicle we're building now is very much our own VC. We're spinning off by a small margin. That helps drive the battery platform.”
“Right now, if the battery on an electric bike goes bad, you throw it all away. That's not sustainable,” he says.
Meanwhile, Colosimo said he has referred many other potential clients to Bloom. “I just started saying, 'If you don't understand manufacturing, we've got Justin and Chris and this team. They'll do what you need them to do,'” he says. If that wasn't an option, then the option for all of them was to go to China.”
Image credit: Land Moto
united states of america! united states of america!
Although it's a fascinating story, Nolte and Cosmides argue that Bloom is more than just a nationalistic manufacturing company. Rather, it's about meeting a clear need if you're going to have a chance to succeed on a large scale, or try something new on a small scale, like the one you already run.
“It's not like, 'Let's do it in America because America is the best,'” Nolte says. “So many companies want domestic assembly and manufacturing options. But there are very few out there.”
Cosmides said he was touring a bicycle factory in Europe when he first came up with this “crazy” idea and wondered, “Why aren't we doing even the basic parts of this in the United States?” He says he remembers it.
Now the hard work begins.
“We're not trying to compete with Asia,” Nolte said. “But I think we have to do our best to be competitive in these different places. And if we're going to do that, we really have to give it our all.”