Kiwi electric bike maker raises $A13 million ahead of dual ASX/NZX listing Leave a comment

New Zealand electric bike maker UBCO has closed a $US10 million ($A13 million) investment round as it prepares for a dual listing on both the Australian and New Zealand stock exchanges and gears up for a global expansion focused on the United States market and its commercial subscription service business.

Since it was founded in 2015, UBCO has successfully sold the idea of a rugged Utility Electric Vehicle (UEV) thanks to its 2X2 Work Bike and the 2X2 Adventure Bike. The world’s first production two-wheel drive electric powered vehicle, the UBCO 2X2 has a place not only in off-road adventuring, farms, and national parks, but also on-road as a clean mobility option.

Looking something like a cross between a dirt bike and those annoyingly loud ad-hoc lawn mower engine-powered bicycles, the UBCO 2X2 is anything but annoying or loud, and rides more like a moped.

Now available not only for off-road uses but also fleet enterprise customers, city riders, and gig economy workers, the UBCO 2X2 bikes have become exceedingly popular.

“We’ve always been very strongly global in our outlook,” said Timothy Allan, UBCO CEO and co-founder, speaking to The Australian Financial Review. “We entered the US in 2017 and established a distribution set-up.

“We started out with just off-road bikes in 2016 and went into farming, conservation and tourism, then we went on-road and got freight, postal services, and food delivery.

“We’re onto our fifth-generation product now and it’s gone to a whole other level in terms of product advancement and durability. It has a 40kg pay load, plus a person. You need a decent product to withstand that.”

In addition to its 2X2 electric bikes, UBCO also sells its KXH power supply, the world’s first globally certified portable power supply that also operates a homologated vehicle class. With an IP66 rating the KXH power supply is both fully waterproof and dust resistant and can deliver capacity of up to 3,100Wh.

The company also sells its electric bikes to companies through a vehicle subscription option, allowing industries as diverse as agriculture, food delivery, postal, freight, and even defence the opportunity to defray their costs without the need for a significant upfront cost.

The subscription model, which is rolling out this year in New Zealand, Australia, the UK, Europe, and the United States, will set fleet enterprise customers back between $NZ75 to $NZ85 per week.

“Subscription means we own the vehicle, so we manage the lifecycle,” said Allan, speaking to TechCrunch, who sees subscription models as the future of the EV industry due to its high chance of profitability and environmental sustainability.

“So the first life starts at high intensity, and that might be 60,000 kilometers delivering pizza, or it might be 30,000 kilometers on a farm, which are equally hard for different reasons. Then after, that vehicle will go down to a lower intensity application. After that the battery can then be pulled out, and that might go into passive solar storage or something like that.”

UBCO, which reportedly has 1,500 bikes on the road across New Zealand, Australia, Europe, and the United States, is now looking to expand its international presence, particularly in the US, as well as scale up its commercial subscription service business.

In order to facilitate the company’s growth, UBCO successfully raised $US10 million ($A13 million) in a convertible note from international investors ahead of a dual listing on both the ASX and NZX within the next 12 to 18 months.

New investors include US fund Seven Peak Ventures, New Zealand’s Nuance Capital, and Taiwan’s TPK Holdings.

A convertible note is a type of bond that the holder can convert into a specified number of shares of common stock in the issuing company or cash of equal value. According to The Australian Financial Review, UBCO is also looking to raise $NZ20 million ($A18.5 million) through a Series B capital raise.

Therefore, if all new investors convert the convertible note, the total size of UBCO’s Series B would be around $NZ35 million ($A32.5 million).

“A listing provides shareholders liquidity and also gives us access to capital to scale the growth of the business,” Allan said.

“We want to introduce portable power to the market in the next six months, a new higher speed 2 x 2 vehicle to target postal workers and commuters, and a four-wheel platform for rural, high volume usage.”

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