Lectric eBikes cofounders Levi Conlow and Robby Deziel, friends since childhood, had an overarching concern as they plowed into the booming world of electric bicycles in 2018: don’t bankrupt their first investor, Levi’s father. Three years later they describe their young startup as the fastest-growing entry in the e-bike market.
The two 25-year-olds, originally from Lakeville, Minnesota, started their company in Phoenix intending to sell durable, high-quality e-bikes directly to consumers for less than $1000—a much lower price point than competing models from industry heavyweights such as Trek, Giant and Yamaha and a host of fellow startups. CEO Conlow, who previously sold electric skateboards while in college, was in charge of drumming up sales and Chief Innovation Officer Deziel would focus on designing and engineering Lectric’s first model
“We came into this space because my old man wanted an electric bike and at that time the average price of an electric bike was around $3,000,” Conlow tells Forbes. “We knew we could do it for a much more affordable price, especially by going direct to the consumer but also by keeping the (cost of goods) and margin as low as we could possibly go.”
Brent Conlow, Levi’s father and co-owner of Letric eBikes, fronted the pair $40,000 of seed funding to get things off the ground, dipping into his retirement savings. Initially, it looked like a bad bet when the first batch of bikes the company produced came out and didn’t sell. “It was an absolute disaster,” Levi Conlow recalls. “We lost his money and potentially screwed up his retirement.”
Things weren’t going well but the cofounders raced to figure out where they’d gone wrong. They gathered as much feedback as they could to learn what it was people didn’t like about the first bike, its styling, features and materials, and quickly followed up with a modified design, Lectric’s XP bike. But that meant borrowing more from Levi’s father. “I asked my dad, ‘how would you like to lose $10,000 more. At that point, he knew I’d already screwed up his retirement so he gave us the extra $10,000.”
And that’s when everything changed. Lectric went from selling just one or two bikes a month in 2019 to $2 million worth of XPs a month a year later with the modified design. Earlier this year he company surpassed cumulative sales of 100,000 e-bikes in October 2021. Revenue will hit $85 million this year and Conlow says that figure is likely to double in 2022.
“Lectric has become one of the largest and fastest-growing e-bike brands in the United States in just two short years,” Bertram Capital partner Ryan Craig said at the time of the VC’s funding announcement. “The team at Lectric accomplished this through a novel approach to design, marketing, distribution and customer support, which has earned it thousands of highly satisfied, loyal customers.”
Their timing couldn’t have been better, given the spike in U.S. demand for e-bikes. The Covid-19 pandemic triggered a surge in bicycles sales starting in 2020, boosting the overall market for two-wheelers by 65% to $5.3 billion in the 12 months that ended in July 2021 from two years earlier, according to analyst Dirk Sorenson with market researcher NPD Group.
In the past two years “e-bikes grew by a whopping 240%, which made it the third-largest cycling category in terms of sales revenue” behind mountain bikes and children’s bikes and ahead of road bikes, Sorenson said in a recent report.
“We went for the throat of the industry when we first came out at our price point” of $999, says Conlow. “There was a really quick adoption and that’s what’s allowed us to grow so quickly.”
Lectric’s improved funding and connections to suppliers and shipping companies are helping it manage the jam at West Coast ports (where its Asia-built bikes arrive) that’s caused supply headaches across the economy. “At the end of 2020 and early 2021, we made some big investments and adjustments for how we bill, how we manufacture and how we warehouse. That’s starting to pay dividends now.”
Lectric’s XP and variant Step-Thru models have a top speed of 28 miles per hour and average between 20 and 30 miles of range per charge. They feature sturdy frames that incorporate the 48-volt lithium-ion battery pack, fat, heavy-duty tires and a rear cargo rack. Even if customers upgrade their bikes with all available Lectric options—including a more comfortable seat, cargo racks and a company-designed lock and headlight—the price climbs to $1,345, still less than the $1,500-$3,000 cost of many competing products. They ship to customers across the U.S. at no charge.
Conlow and Deziel are preparing to build out Lectric’s lineup with more premium models and features, but don’t anticipate going above about $1,700 for their top-of-range bikes. They also see potential to increase sales to delivery services that are looking for low-cost, low-carbon urban vehicles.
Importantly, Conlow is glad they didn’t impoverish his father. “We got my old man paid back and he’s happy with the investment.”