Startups & Funding
Rad Power Bikes sold to Life Electric Vehicles for $13.2M
Rad Power Bikes has agreed to sell itself to Life Electric Vehicles Holdings for around $13.2 million, following a bankruptcy process that wiped out its previous $1.65 billion valuation.
Electric bike company Rad Power Bikes has reached a deal to sell itself to Florida-based Life Electric Vehicles Holdings for around $13.2 million. The agreement comes a little more than a month after Rad Power Bikes entered the bankruptcy process. Life Electric Vehicles Holdings, which operates as a developer, manufacturer, and distributor in the light electric vehicle industry, emerged as the winning bidder following an auction process.
According to a bankruptcy docket filing, five entities participated in an auction for Rad Power assets on January 22. The financial details of the auction include:
- Winning bid: Life Electric Vehicles Holdings agreed to a purchase price of around $13.2 million. When accounting for liabilities, the total value of the winning bid is $14.9 million.
- Backup bid: Retrospec, another e-bike company, submitted a backup bid of $13 million.
This transaction represents a steep decline for Rad Power. According to data from PitchBook, the company reached a peak valuation of $1.65 billion in October 2021 and has raised a total of $329.2 million.
The acquisition follows a period of operational and regulatory difficulties for Rad Power, including issues with some of its older batteries catching fire. The Consumer Product Safety Commission (the US safety regulator) investigated battery safety and found 31 reported fires tied to Rad Power batteries. Rad Power strongly disagreed with the regulator’s findings, stating that it “firmly stands behind our batteries and our reputation as leaders in the e-bike industry, and strongly disagrees with the CPSC’s characterization of certain Rad batteries as defective or unsafe.”
Rad Power’s restructuring is part of a broader downturn in the micromobility sector. Other peer companies in the industry have faced similar financial struggles in recent years. For example, VanMoof and Cake both underwent restructuring and found new owners, while scooter company Bird also went through the bankruptcy process.
While the acquisition awaits approval from the bankruptcy judge, the future direction of the brand remains transitionary. Robert Provost, the CEO of Life Electric Vehicles Holdings, stated that a process is still underway and an exciting future is being planned for Rad Power.
Why it matters
The sale highlights the brutal correction in the micromobility sector, where once-high-flying startups are now being sold for pennies on the dollar following bankruptcy restructurings. It underscores how rapidly capital-intensive hardware startups can collapse when pandemic-era demand dries up and regulatory pressures mount.