VanMoof just revealed $40 million in brand-new outside financial investment to capitalize on the surging worldwide need for electrical bikes. Significantly, VanMoof’s co-founders, Ties and Taco Carlier, tell The Edge that about a 3rd of that brand-new cash will be directed at solving VanMoof client assistance problems that have actually magnified with the launch of the business’s brand-new S3 and X3 e-bikes in the middle of a global pandemic.
” Over the next 6 to twelve months, we’ll have upgraded every step of the client journey, from production to scheduling check-ups. Getting a VanMoof e-bike serviced will be as simple as purchasing a meal online,” promises Taco in a prepared declaration revealing the brand-new investment round.
VanMoof calls the brand-new app-based service the Bike Doctor Network, and it’ll be releasing in beta later on this year prior to rolling out worldwide in 2021.
I overtook the Dutch brothers over Zoom on Monday to better comprehend two things: what’s being done to resolve the quality and shipment concerns that have sullied the S3/ X3 launch, and how this new money infusion will enhance things in the future. Ties, the cars and truck mechanic-turned-engineer, was in Taipei where he oversees VanMoof’s supply chain and a brand-new devoted assembly plant operated by SINBON Electronics. Taco, the engineer-turned-business executive, remained in Amsterdam where VanMoof is headquartered.
Sales of VanMoof bikes have actually been expanding. The business says that it offered more bikes in the very first 4 months of 2020 than it did in the previous 2 years combined.
The most singing are those still waiting for their bikes to get here, suffering missed out on deadlines by several weeks at a time, yet getting little to no interaction from the company. This is regardless of assurances that the delivery concerns that plagued VanMoof’s previous generation of bikes wouldn’t be repeated this time around, thanks to the business’s new “hyper efficient manufacturing and distribution system” promoted at the S3/X3 launch occasion.
To make matters worse, some VanMoof owners who have actually gotten their new e-bikes complain about scuffs and damage that happened during shipping. It’s likewise not unusual to be on hold for 20 minutes, 40, or longer when trying to call VanMoof support.
And we are going from about the worst to the finest, I think,” confesses Ties in a minute of full openness.
Something clearly hasn’t gone to plan.
SO WHAT WENT WRONG?
The first issues with the S3/ X3 shipments appeared nearly immediately and in far higher volume than expected. “We thought this bike would be 10 times better than the S2 since we repaired everything,” explains Ties, the engineer. But brand-new issues presented themselves right after the very first couple of thousand S3 bikes shipped, producing 10 times as lots of client assistance calls rather. “We determined in about 1 percent– 1 out of 100 bikes within the first week or so would have something important enough for a consumer to give us a call. But that turns out to be closer to 10 percent,” he says. The company’s assistance team was quickly overwhelmed, creating a stockpile of aid requests.
The business presently assembles and ships in between 400 and 500 bikes each day, or about 12,000 bikes each month. “We can not stop even momentarily to catch up with customer service since a great deal of individuals have paid and are awaiting their bikes,” Ties states.
VanMoof says that some problems have currently been remedied at the point of assembly. VanMoof had to extremely rapidly mobilize quality control groups to inspect every bike at the storage facilities and filter out the ones with known issues.
VanMoof’s brand-new environment-friendly boxes also developed concerns. The smaller, less inefficient boxes were cheaper to deliver, helping to reduce the expense of the bike, however they didn’t use enough defense during misuse.
Ties suggests that he may trigger the sensors on VanMoof bikes throughout delivery to measure the G-force they’re subjected to during shipment.
VanMoof when notoriously packed its bikes in boxes that indicated they consisted of vulnerable big-screen TVs It helped in the beginning, however then the word got out. “It was such a widely known hack, and other companies started doing it,” says Ties. “I do not believe it really works anymore.” His bro Taco, nevertheless, is less convinced: “It could be a cool idea to try to do some A/B testing and put the tv back on package to see if it works.”
For the time being, VanMoof began strengthening the smaller boxes to make them stronger while including foam back to the product packaging to safeguard the bike tubes. Up until now, the change looks appealing, leading to less damage during shipment, states Ties.
The other complication, unsurprisingly, was attempting to launch the brand-new VanMoof electrical bikes in the middle of a pandemic. VanMoof’s supply chain of customized components was great, humming along while its rivals were required to close down due to an absence of parts. However unexpectedly, everybody who ever bought a VanMoof bike in the last 11 years began calling client assistance as bike usage skyrocketed around the globe. “In April, or the end March, when the crisis started, at first it was 3 weeks of total silence, and after that it went all insane,” remembers Taco. “Countless individuals began emailing and calling and it overwhelmed consumer assistance.” Preorders for the S3 and X3 started in early April prior to the bikes began delivering in May.
The company has been scaling customer assistance since, however it’s needed to do so within the restrictions of a COVID lockdown, with people working from home and having to be worked with and trained remotely.
It’s simple to say with the aid of hindsight, however all of the signs were there that bikes, electric bikes, and VanMoof e-bikes, in specific, were in uncommonly high demand even prior to the less pricey, however more feature-packed, S3 and X3 bikes went on sale. Even VanMoof was stating as much in a blog site post from March 20 th, talking about the sales jump the business had actually seen because February.
VanMoof is now reaching the backlog while improving the initial quality of its bikes, but the business’s not out of the woods yet. The Brothers Carlier now yield that they have actually outgrown their existing assistance design that often needs bikes to be reboxed and delivered backward and forward for repair work.
” We had some huge issues in the previous four months with our service platform,” says Taco. “And I think this is a big chance not only to fix those issues, however transform how a bike must be serviced in the future.”
A WORLDWIDE MOBILE SERVICE NETWORK
” Our next frontier is to change our company by building a full assistance ecosystem around every rider,” stated Ties in today’s financing statement. The business is targeting a rollout in the next six to 12 months constructed around 4 primary components:
- An international mobile service network, called the Bike Physician Network
- More intuitive app support
- Smarter software with remote diagnostic solutions
- More proactive consumer support
That initially bullet is the most noteworthy. Rivals like Cowboy in Europe, and Rad Power in the United States, also use mobile service networks, whereby parts are shipped to a client’s house where a licensed technician is dispatched to carry out repairs beyond the province of the customer or local bike shop. Rad Power significantly partners with Velofix to expand its assistance network to more cities.
The Carliers, in traditional VanMoof style, think the best approach is to build their own mobile service network, as it does nearly every element on the S3 and X3 bikes. The Bike Medical professional Network will be staffed by both full-time VanMoof staff members and freelancers, trained to just fix and maintain VanMoof bikes.
80 to 90 percent of our bikes are shipped to 50 cities around the world,” says Ties. From there, it ought to be easy to take the model and broaden it to more cities as needed, or so the thinking goes.
More particularly, VanMoof will introduce the Bike Physician Network in beta later on this year in Amsterdam, Rotterdam, and Berlin, before getting here in more than 40 worldwide cities by the end of 2021.
When asked if VanMoof would ever partner with a third-party bike-service business to enhance VanMoof’s own mobile service network, Taco, the ever-pragmatic company executive, responded as expected: “Never ever say never ever,” he said.
Ties states that constructing VanMoof’s mobile service network on an international scale just recently ended up being possible. Initially, they needed to start shipping in the kind of volume seen with the S3 and X3, which is only expected to grow in the years ahead– in May, the business claimed to have “over 120,000 riders.” Second, VanMoof needed to take control of the supply chain to ensure it had prepared access to the parts required for repair, something they’ve slowly been doing considering that their very first electric bike launched four years earlier. Finally, VanMoof required to accomplish the type of modularity and OTA update capabilities discovered in the S3 and X3 bikes so that an experienced professional– not an expensive bike mechanic– might be cost-effectively dispatched to a client’s office or home for service.
The brand-new VanMoof Bike Medical professional Network is not the like the $340 Comfort: Upkeep subscriptions that VanMoof offers in 21 cities today. POM, as Ties calls it, sends VanMoof’s Bike Medical professionals to your home or office to replace used tires, oil the drivetrain, and carry out other regular upkeep tasks at specified periods. The mobile service network kicks into action as concerns emerge and will be readily available to all VanMoof customers who require help in the cities supported. Rates for the brand-new mobile service network hasn’t been settled.
WAIT, THERE’S MORE?
As to the other three elements of the brand-new assistance environment– more intuitive app assistance, smarter software application with remote diagnostic options, and more proactive consumer assistance– the VanMoof founders discussed their strategies for those.
Ties says to expect the VanMoof app to provide better support, potentially using an utility that can be operated on the bike to diagnose a problem instead of needing a call to customer support. It may even buy the part immediately after confirmation from the owner.
VanMoof bikes currently receive software application updates a couple of times each year, maybe once every 3 months by Ties’ price quote. This brand-new round of funding will assist accelerate that. “Tesla automobiles, for instance, where you get a weekly software application upgrade that adds functions however likewise repairs a great deal of bugs– I think that’s where we really want to be.” Ties states it’s likewise crucial to continuously upgrade older bikes to keep them on the roadway longer, keeping in mind that VanMoof still maintains a software application team dedicated to the S1, VanMoof’s first electric bike released in 2016.
VanMoof is working to make its bikes so wise, so complete of sensing units, that they’ll be able to detect a problem before the consumer does and then proactively take actions to solve it. Ties visualizes a bike that can spot a worn brake pad, for example, prior to the owner even notifications, triggering VanMoof to send a replacement part directly to the person’s home.
VanMoof would not be the first to carry out remote diagnostics in the mobility area.
But just a third of that $40 million financial investment VanMoof revealed today is earmarked for improving after-sales assistance. According to Taco, the other two-thirds will be equally assigned to R&D and to increase production capacity.
” We have selected two financiers, NVP and Felix Capital that know everything about scaling brand names. We deliberately chose a financier in the American market due to the fact that I still think that’s our greatest potential,” states Taco, who describes the US as VanMoof’s third-fastest growth market. “We also picked an investor– Balderton– with a deep knowledge of tech and especially software that can bring our software application platforms to the next level.”
VanMoof’s rivals are raising capital too. Rad Power raised $25 million in February while Cowboy raised $23 million in July. And with VanMoof raising $535 million in brand-new investment since May, 2 things are now abundantly clear: VanMoof is no longer a startup, and investors are now betting on electric bikes as the next frontier in mobility.
It’s money that offers VanMoof a lot of runway to accomplish its goal of getting the next billion on bikes, simply as cities around the globe are finally getting up to the concept
Update September 16 th, 6: 40 AM ET: Included specific reference of the Bike Physician Network and dates.