The pandemic has began during the electric bicycle boom. But like many other pandemic-related trends, this boom didn’t last long.
Last 12 months, electric bike startups VanMoof and Cake filed for bankruptcy amid doom and gloom in the micromobility space. Tier and Dott merged. Superpedy closed the store. Bird also needed to undergo restructuring.
All these startups may have had different goals, but their problems were quite similar. Bloom, a recent company based in Detroit activationthinks it knows the answer: care for all the labor behind the scenes and let startups focus on the exciting stuff like product design and branding.
It’s an concept that fascinated founders Chris Nolte and Justin Kosmides so much that they packed up and moved to Detroit to build it – Nolte with his 1-year-old child and spouse on the side, and Kosmides with his four-legged companion, Artie.
This is also proving popular; their customer list is so long as a CVS receipt.
“Everyone is trying to reinvent the wheel,” Nolte tells TechCrunch in a recent interview. “But the reality is that there are proven systems in place and people waste a lot of money making mistakes and making bad decisions.”
The “stupid and terrifying” flood of VC money into the space over the past few years has caused a lot of waste and collateral damage, Kosmides tells TechCrunch. Bloom is this couple’s answer to cleansing all of it up.
Founded last 12 months, Flower plans to supply several basic services: contract manufacturing, assembly, shipping, and logistics and service. Each of those tasks are tasks for which startups would have to seek out individual partners in advance or undertake them themselves, which increases costs and puts pressure on financial results. It is these additional ventures that may destroy a startup.
“I remember saying, ‘Who’s crazy enough to listen to this crazy idea I have?'” Kosmides exclaimed. “I went to Chris and challenged him and he said, ‘Oh, I’ve been pondering about this for so long.’
It may have seemed crazy at the time, but Nolte says about 30 corporations will start working with Bloom in the near future. Kosmides says there are greater than 100 in the pipeline, ranging from startups that have just passed the prototyping stage to “very mature” players.
Much of this can happen in the Michigan manufacturing space, although the duo plans to work with partners in California, Ohio, South Carolina and New York. The goal is to launch a 200,000-square-foot facility in Detroit with distribution and assembly capabilities.
They did this with a small footprint and a team of about 10 people, although they plan to roughly double that number once the first round of funding closes.
If all goes well, Nolte and Kosmides hope to not only help these corporations build higher businesses, but also set more standards for an industry that is currently highly fragmented.
Shared passion
Nolte is an e-bike veteran. He actually took an interest in electric bikes when Barack Obama was still president.
He is also a true veteran. Nolte served a tour with the U.S. Army in Iraq, where he drove fuel trucks. Then, after a back injury, he learned about pedal-assist electric bikes. He loved the technology and the idea of helping the country get off its oil addiction.
“We are constantly dependent on foreign oil,” he says. “I actually began to buy into this concept that using transportation on a larger than human scale could help alleviate the must participate in these [conflicts]”
Nolte began as an early leader in a space called Powered bicycles. He also began a YouTube channel in 2019 to coach people about the industry.
“I ended up doing a lot of factory tours” for the channel, he says. “I thought to myself, well, why are there so many bicycle factories in Europe and micromobility factories in the U.S. and actually virtually none in the U.S.?”
Kosmides also co-founded an electric bicycle company called Vela in 2020, after almost 10 years at Barclays Investment Bank. He remembers looking at the micromobility industry and pondering, “We’re not properly funding these companies and these vehicles.” (Vela is now operated by a recent group that is trying to take advantage of Bloom’s network, he says.)
The industry was “over-funding companies that maybe had really good Instagrams and were really good at marketing, but their product, development and sales just weren’t there,” he says.
Last 12 months, the two realized they were looking for ways to unravel the problems that had begun to plague some of the most well-known micromobility corporations.
The duo found a base at Newlab in Detroit’s recent mobility innovation district Center Michigan.
It’s only been a 12 months, but there has been bloodshed since they decided to found Bloom. One of the most notable failures occurred at premium electric bike manufacturer VanMoof. It filed for bankruptcy last July, leaving 1000’s of consumers uncertain about the operation of their connected bike. Bird, a scooter-sharing company once valued at greater than $2 billion, filed for bankruptcy in December. (Both corporations eventually emerged from bankruptcy under recent ownership.)
The troubles continued into early 2024, when boutique electric motorcycle and bicycle store Cake filed for bankruptcy so suddenly that it sold its U.S. inventory to a Florida mobile device store owner. (This man is now one of Bloom’s clients.)
All this destruction meant the moment was perfect for Bloom.
“We couldn’t do this two or three years ago. Everyone wanted to get products off the shelves as quickly as possible,” says Kosmides. “But now we have a moment where everyone is asking: ‘How can we avoid making the same mistakes?’
Image credits: Moto dust
Bloom’s clients
One of the first to come to a decision to cooperate with Bloom is a startup that desires to create products for thrill seekers.
Co-founder Colin Godby Moto dust in 2023 in an try to not only help usher in the electrification of off-road motorcycles, but also bridge the gap by creating an American brand in the space — something that did not really exist because of the dominance of Japanese brands like Honda and Yamaha.
So far, Dust has only created a few initial prototypes. But they do sign a deal with Bloom to make use of production space in Detroit to build the next batch of production bikes. Dust may even use Bloom for final assembly, quality control and order achievement.
The difference between using Bloom for all these parts of the process and doing it yourself or finding individual partners, Godby says, might be measured in hundreds of thousands of dollars.
“Instead of us having to raise $40 million to build our first dirt bike, it will cost about $5 [million] $10 million was raised to bring this amazing product to market,” he says.
It is also less burdensome.
“If we take care of it, it’s all up to us, you know what I mean? For example, I need to hire more people and work more hours,” Godby says. “If you share this with Bloom… the success of their company depends on whether they can achieve this.”
This trust was not immediate. Dust began before Bloom had actually made contact with many potential customers. After meeting with them late last 12 months, Godby said he was concerned about mixing “startup risk with launch risk.” However, the idea caught on when he realized how other industries rely on all these intermediary corporations.
“Honestly, if I mean the most fun way to spend time in Dust, it’s not building a production environment, you know?” He says. “When you look at different mature industries, whether it’s aerospace, automotive, tier one suppliers and things like that, that’s how the game works.”
When it involves Bloom’s first partners, Scott Colosimo is on the other end of the spectrum. He spent greater than a decade as CEO of a global motorcycle company called Cleveland CycleWerks. Colosimo tells TechCrunch that it was attempting to make a “soft transition” from a gas-powered vehicle company to an electric vehicle company.
“It became clear very quickly that it was like turning a baker into a surgeon,” he says. “It’s just different.”
He completely moved away from the gas motorcycle industry and founded Land, which is nominally an electric motorcycle company. But it is also, in a barely sneaky way, an energy company built around a connected, swappable battery that powers bikes.
Land is moving in this direction as Colosimo says there is a huge opportunity, especially given the often sad state of e-bike batteries. And Bloom, he says, makes it a lot easier.
Colosimo says he’s in talks with Bloom about producing future bikes, mainly because Land already has a space in his hometown of Cleveland, Ohio, equipped and able to build the first example. So what he really wants with Bloom is to scale the battery platform designed at Land and make it available to other corporations.
“If we lived in an ideal world, I would like to put $100 million into the bank account and focus only on batteries so that in three years I would have a profitable product,” he says. “VCs are not willing to take a position $100 million in the hope that you’re going to turn into a unicorn in three years. So the vehicles we produce today are largely our own VC. Vehicles currently have a slim margin. Helps push the battery platform.
“Right now with e-bikes, if the batteries are bad, you throw all of it away. It’s not sustainable,” he says.
In turn, Colosimo says it refers many other potential clients to Bloom. “I just started saying, ‘Hey, if you don’t know your production, there’s Justin and Chris and there’s this band – they do whatever you need,'” he says. “If that wasn’t an option, it would be: everyone will go to China.”
Image credits: Land moto
USA! USA!
While this is a tempting narrative, Nolte and Kosmides argue that Bloom is not only a nationalist production game. It’s more about meeting obvious needs if corporations like the ones they were already running succeed on a large scale or have the probability to try something recent on a smaller scale.
“It’s not a whole thing of, ‘Let’s do it in America because America is the best,’” Nolte says. “Many companies would like to be able to assemble and produce at home. But there is very little there.”
Kosmides, who says he was touring European bicycle factories when this whole “crazy” idea first got here to him, says he thought to himself, “Why don’t we make even the basic part of this in the U.S.?”
Now the labor begins.
“We’re not trying to compete with Asia,” Nolte says. “But I think we have to provide our greatest to compete with these different places. And if we’ll do this, we actually have to provide it our all.