Company Overview –
Pedal Anywhere is a bike rental company in Seattle and Friday Harbor, WA. They offer quality bikes, low rates, and free on demand delivery.
|Name: Pedal Anywhere||Minimum Raise: $100K|
|CEO: Zach Shaner||Maximum Raise: $750K|
|Company Founded: 2013||Structure of Raise: Crowd Note, 20% Discount|
|Location: Seattle & Friday Harbor, WA||Valuation: $3M Valuation Cap|
|Crowdfunding Portal: seedinvest||Minimum Investment: $500|
|Crowdfunding Link: https://www.seedinvest.com/pedal.anywhere/pre.seed|
|Positives||Risks and Reservations|
|$196k revenue to date from 2,300 customers and steadily growing||Seasonal affected business|
|Terms include 20% conversion discount and 6% interest||Target market is confined to major metropolitan cities|
|Targeting both B2C & B2B. B2B corporate accounts could provide steady revenue||$50-100k per city expansion cost|
|Bootstrapped up until this point||Currently only servicing Seattle|
Traveling with your bicycle is prohibitively expensive and requires technical assembly knowledge, so most travelers leave their bikes at home.
Pedal Anywhere solves these problems by providing high-quality bikes that are fully customizable for a rider’s desired accessories, size, and style. By delivering them on demand and operating 7 days per week, they remove the traditional pain points that travelers experience when trying to locate an adequate rental shop in an unfamiliar city.
Pedal Anywhere has near-term expansion goals to Portland, San Francisco, & Vancouver BC. They have medium-term expansion goals to Denver, San Diego, Austin, Chicago, Toronto, Montreal, Boston, New York, Philadelphia, & Washington DC. Pedal Anywhere is also pursing partnership opportunities with colleges and universities to provide student rental bikes, corporate fleets, and municipal governments.
The mission of their business model is to harness economies of scale to earn 10x in revenue per year over the capital cost of each bike. Their goal is to utilize periodic resale of the bikes to obtain profitable capital replacement so that once each city’s fleet is at scale, ongoing capital inputs are effectively free and the product is always new.
Rental rates range from $39-$449.
- 2,350 customers
- $196K in revenue
- $84 of revenue per customer
- $131 of revenue per transaction
- Number 2 & 3 organic SEO in Seattle
- 55% bootstrap income growth YOY
*Source: Company provided on crowdfunding campaign website
Senior Management Team
|Zach Shaner||Lucas Nivon|
|Position:||CEO & Co-Founder||Co-Founder & Advisor|
CEO Zach Shaner has done an excellent job bootstrapping the company up to this point. Lucas Nivon was the original founder but brought Zach on in 2013 to take over while Lucas pursued another business opportunity. Lucas remains an advisor that meets with the company monthly.
Zach is a first time Founder/CEO with prior experience in marketing and journalism. Although 1st time founders are always a gamble, Zach seems to be generating success. I think finding an additional experienced advisor or two would be highly beneficial to help with growth and ease learning curves.
Industry: On-Demand Services
TAM (Total Addressable Market): $10M in Seattle, $21M in San Francisco
*Souce: Portal Page in Pitch Deck
Multiple cities have seen huge cycling growth since 2000. +306% in Portland, +234% in DC, +161% in Denver, +97% in Seattle
With the population shifting and migrating to larger cities, transportation will be a continually growing market. The two major limitng factors with the bike rental model is the seasonitly effect from the weather, along with limiting the TAM to major metropolity cities. While this does reduce the overall TAM, the market is still quite large and other startups like UBER have been quite successful with these demographics.
Pedal Anywhere differentiates from it competition with consistency of the quality of their bikes along with on-demand service eliminating any barriers to entry for their customers.
Pedal Anywhere believes their primary competitors are local bike shops and subsidized bike-share schemes. Each cities competitors will be different. They also believe instant delivery companies already at scale (Amazon, Postmates, Spinlister) could potentially be competitors if they pivot into their market.
Revenue to date: $196K
Revenue Last Fiscal Year: $94,293 (2016)
Previous Funds Raised: $0
Use of Funds
If the target amount is raised:
- Executive compensation (18.7%)
- Manager compensation (10.7%)
- Fleet bicycles (20%)
- Warehouse leasing (16%)
- Tools, supplies, accessories (3.3%)
- Delivery vehicles (3.3%)
- Commercial insurance (2%)
- Marketing (6.7%)
- Bicycles maintenance (4%)
- Debt service (0.7%)
- Legal & licensing (6.6%)
- Web & brand design services (3%)
- Other (5%)
With the model only proven in Seattle, Pedal Anywhere still has a long road before potential acquisitions. In their marketing plan, Pedal Anywhere acknowledges their intentions of partnering with other instant-delivery services with the intent of possibly being acquired. This mentality is always a good sign that the CEO is strategically looking to the future.
Recent Acquisitions in the Field
|Date||Company Acquired||Acquired By||Amount|
|May 2, 2016||CallAtHome||DriveU||Unknown|
|Nov. 9, 2015||Pickingo||Shadowfax Technologies||Unknown|
Expert Opinion Summary
Pedal Anywhere has built a great business with excellent fundamentals. The $3M value cap that is offered appears fair, especially when compared to other recent crowdfunding offerings. One downside of the Crowd Note that is being offered, is that unlike a traditional SAFE or Convertible Note, the Crowd Note does not convert until an exit. This brings up an issue in the circumstance if Pedal Anywhere raises an additional round below a $3M valuation. Traditionally, investors in a SAFE or Convertible Note would convert at the valuation raised under $3M, not dependent on the exit valuation. In this circumstance, the upside potential is reduced for investors of the Crowd Note.
Pedal Anywhere has proven their concept in Seattle, but the cost of $50-100k per city to expand will require significant funding to scale at a mass rate. The company plans to use proceeds from this raise for near-term expansion to San Francisco, Portland and Vancouver. Scaling beyond just Seattle will add logistical difficulty for management, an advisor with experience in scaling an instant delivery business would be a reassuring addition.
Another player in the bike rental space Spinlister is a closer competitor than given credit. Splinlister takes an AirBnB approach to bike sharing, while Pedal Anywhere has chosen a model similar to UBER. Although these models are very different, they both offer the result of a rented bike. Pedal Anywhere is convinced that by offering a consistent product experience and instant delivery the UBER model offers a superior customer experience for bike rental.
I think the direction Pedal Anywhere is exploring with adding a B2B model is a great opportunity to provide consistent reoccurring revenue. In 2015 they carried out a Corporate Fleet test contract for $14.4k. They are looking to partner with colleges, larger companies, municipal governments and property management companies. These are all great opportunities to decrease the seasonality effect on revenue.
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