The leisure bike market is leaving high-speed bikes in the dust.
Total U.S. sales of leisure bikes shot up nearly 20 percent during the 12 months ending March 31, 2014, while racing bike sales fell 3 percent during the same period, according to data from market research firm NPD Group. With U.S. cities adding more bike lanes and consumers shifting to more environmentally-friendly transportation, the growing popularity of recreational bikes is expected to continue. Cashing in on this trend are companies selling simple, stylish and affordable bikes, primarily online.
So who is leading the pack in the bicycle market? Here are three fast-growing startups proving that the e-commerce model is gaining traction with bike-lovers.
1. Solé Bicycles. Founded in 2009 by a group of college students, Venice, California-based Solé Bicycles sells fixed-gear and single-speed bikes for $399. Annual sales have grown from $650,000 in 2012 to $2.1 million in 2014, according to the company. Solé co-founder Brian Ruben says he was fortunate to launch the startup right when fixed-gear bikes started growing in popularity, but that Solé was among the first startups to offer the bikes for less than $1,000.
How does the company turn a profit at such a reduced price point? Solé's direct-to-consumer model allows it to cut out retailers that act as middlemen and mark up the price. The company has a retail location in Venice but generates about 85 percent of its sales through online orders. Solé's bikes are 90 percent assembled upon arriving at consumers' front doors. Aside from a $15,000 small business grant from the University of Southern California and a $10,000 loan from the founders' parents, Solé has yet to take outside investment.
2. Priority Bicycles. The winner of Inc.'s most recent Best in Class Design award in the personal transport category, Priority Bicycles was founded in July 2014 by Dave Weiner, a former software consulting firm CEO. Weiner launched the New York-based company via a Kickstarter campaign that raised more than $550,000 on just a $30,000 target. What's his marketing secret?
Weiner focused on creating a low-maintenance bike by using puncture-resistant tires that almost never go flat and a chainless belt that doesn't rust. A lightweight aluminum frame also makes the bikes easy to carry up stairs. Assembly takes about five minutes, according to the company, and like like Solé, Priority sells its bikes online for $399. The company generated half a million dollars in sales during its first six months in business.
3. Villy Custom. Former fashion designer Fleetwood Hicks founded Dallas-based custom bicycle company Villy Customs in 2009. Three years later, with $250,000 in annual sales, Hicks pitched his business on ABC's Shark Tank and landed a $500,000 investment from Mark Cuban and Barbara Corcoran. Sales reached roughly half a million dollars in 2014 and are projected to hit $2 million in 2015.
Villy Custom makes classic "cruiser" bikes that only come in one speed. The company lets consumers pick either a men's or women's bike frame online, and then choose custom colors for everything from tires and wheels to pedals and grips. Orders typically take between two and three weeks to ship, and the bikes cost between $500 and $600. Villy's corporate program has made bikes for brands including Pepsi and energy drink Monster, and the company has celebrity customers in Aerosmith's Steven Tyler and British pop group One Direction.