The pandemic ushered in an e-bike boom. But like so many other pandemic trends, that boom didn’t last.
The last year has seen e-bike startups VanMoof and Cake file for bankruptcy amid a backdrop of micromobility doom and gloom. Tier and Dott merged. Superpedestrian closed up shop. Bird also had to go through a restructuring.
All of those startups might have had different goals, but their problems were fairly similar. Bloom, a new Detroit-based startup, thinks it has the answer: take on all the hard, behind-the-scenes work and let these startups focus on the exciting stuff, like product design and branding.
It’s an idea that founders Chris Nolte and Justin Kosmides are so passionate about that they packed up and moved to Detroit to build it — Nolte with his 1-year old child and spouse in tow, and Kosmides with his four-pawed companion Artie.
It’s proving popular, too; their customer list is as long as a CVS receipt.
“Everybody’s trying to reinvent the wheel,” Nolte tells TechCrunch in a recent interview. “But the reality is there are proven systems, and people waste a lot of money on making mistakes, making the wrong decisions.”
The “silly and scary” flood of VC money into the space over the last few years caused a lot of waste and collateral damage, Kosmides tells TechCrunch. Bloom is the pair’s answer to cleaning some of that up.
Founded last year, Bloom plans to offer a few core services: contract manufacturing, assembly, shipping and logistics and service. Each of these are tasks that startups would previously have to find individual partners for or take on in house, both of which increase costs and put pressure on the bottom lines. It’s those extra undertakings that can doom a startup.
“I remember saying, ‘who’s crazy enough to listen to this crazy idea that I have,” Kosmides exclaimed. “And I went to Chris, and I pitched him, and he was like: ‘Oh, I’ve been thinking about this for so long.”
It may have seemed crazy at the time, but Nolte says around 30 companies are set to start working with Bloom in the near-term. Kosmides says there are more than 100 in the pipeline ranging from startups that are just past the prototyping stage to “very mature” players.
A lot of this will happen at a production space in Michigan, though 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’ve accomplished this with little outreach, and a team of just about 10 people — though they plan to roughly double that headcount as they close their first funding round.
If all goes well, Nolte and Kosmides hope to not only help these companies build better businesses, but also establish more standards for an industry that is currently very scattered.
A shared passion
Nolte is an e-bike veteran. In fact, he got into e-bikes when Barack Obama was still president.
He’s also an actual veteran. Nolte did a tour in the U.S. Army in Iraq where he drove fuel trucks. He then learned about pedal-assist e-bikes after a back injury. He loved the tech and the idea of helping wrestle the country away from oil dependency.
“We’re continually dependent on foreign oil,” he says. “I really started to believe in this idea that using more human-scale transportation could help to mitigate the need to participate in these [conflicts].”
Nolte started as an early leader in the space called Propel Bikes. He also started a YouTube channel in 2019 to educate people about the industry.
“I ended up doing a lot of factory tours” for the channel, he says.”I was like, well, why are there so many factories in Europe, but there are really practically none in the U.S. for bikes and micromobility?”
Kosmides also co-founded an e-bike company called Vela in 2020, after nearly 10 years at Barclays Investment Bank. He remembers looking at the micromobility industry and thinking: “We’re financing these companies and these vehicles all incorrectly.” (Vela is now operated by a new group that is trying to leverage Bloom’s network, he says.)
The industry was “over-funding companies that, maybe their Instagrams were really good, and they were really good at marketing, but their product and their development and their sales just wasn’t there,” he says.
Last year, the two realized they were both looking for ways to solve the problems that were starting to plague some of the best-known micromobility companies.
The duo found a home base with Newlab at the new mobility innovation district in Detroit’s Michigan Central.
It’s only been a year, but there has been a lot of bloodshed from the time they set out to start Bloom. One of the most notable failures happened at premium e-bike maker VanMoof. It filed for bankruptcy last July, leaving thousands of customers uncertain about the operability of their connected bike. Scooter-sharing company Bird, once valued at more than $ 2 billion, filed for bankruptcy in December. (Both companies ultimately emerged from bankruptcy under new ownership.)
The trouble continued into early 2024, when boutique electric motorcycle and bike outfit Cake filed for bankruptcy so suddenly that it sold its US inventory to a mobility shop owner in Florida. (That man is now one of Bloom’s customers.)
All this devastation meant the timing was perfect for Bloom.
“We couldn’t be doing this two or three years ago. Everyone was concerned about getting products off the shelves as quickly as possible,” Kosmides says. “But now we’re having this moment where everyone’s asking, ‘How do we not make the same mistakes?”
Image Credits: Dust Moto
Bloom customers
One of the first to take the leap with Bloom is, perhaps unsurprisingly, a startup that wants to make products for thrill-seekers.
Colin Godby co-founded Dust Moto in 2023 in an attempt to not only help bring electrification to dirt bikes, but also fill a gap by creating an American brand in the space — something that hasn’t really existed thanks to the dominance of Japanese brands like Honda and Yamaha.
Until now, Dust has only made a few initial prototypes. But they are contracting with Bloom to use its production space in Detroit to build the next group of production-intent bikes. Dust will also leverage Bloom for final assembly, quality control, and fulfillment.
The difference of having Bloom help with all those parts of the process versus doing it alone or finding individual partners, Godby says, can be measured in millions of dollars.
“Instead of needing to raise $ 40 million for us to build our first dirt bike, it’s on the order of sort of $ 5 [million] to $ 10 million raised to be able to bring this awesome product to market,” he says.
It’s also less burdensome.
“If it’s us handling it, everything is on us, you know what I mean? Like, I gotta hire more people, we’ve got to work more hours,” Godby says. “If it’s shared with Bloom… like the success of their company depends on them being able to nail this.”
That trust wasn’t immediate. Dust got started before Bloom had really engaged with many prospective customers. After meeting with them late last year, Godby says he was wary of stacking “startup risk on top of startup risk.” But the idea clicked when he realized how other industries rely on these types of intermediary companies.
“Honestly, if I’m thinking about the most fun way to spend my time at Dust, it’s not building a production environment, you know?” he says. “And you look at the various mature industries, whether it’s aerospace or automotive, tier one suppliers and all these sorts of things, that is how the game works.”
Scott Colosimo is on the other end of the spectrum, as far as Bloom’s early partners go. He spent more than a decade as CEO of a global motorcycle company called Cleveland CycleWerks. Colosimo tells TechCrunch he was trying to “transition softly” from a gas vehicle company to an electric one.
“It became very apparent, very quickly, that that’s like taking a baker and turning them into a surgeon,” he says. “It’s just different.”
He walked away from the gas motorcycle business entirely and started up Land, which is nominally an electric motorcycle company. But it’s also, somewhat sneakily, an energy company as well, built around the connected, removable battery that powers the bikes.
Land is headed in this direction because Colosimo says there’s a massive opportunity, especially given the often sad state of e-bike batteries. And Bloom, he says, makes it that much easier to try.
Colosimo says he’s talking with Bloom about manufacturing future bikes, mostly because Land already has a space in his hometown of Cleveland, Ohio that’s tooled up and ready to build the first run. What he really wants to do with Bloom, then, is scale that battery platform designed at Land and make it available for other companies.
“If we lived in a perfect world, I would love to put $ 100 million into a bank account and just focus on the batteries, so in three years, we have a viable product,” he says. “The VCs aren’t willing to deploy $ 100 million for the hope that you’re going to unicorn in three years. So the vehicles that we’re making right now are very much our own VC. The vehicles currently spin off a small margin. It helps push the battery platform.”
“Right now, for e-bikes, when the batteries are bad, you throw the whole fucking thing away. It’s not sustainable,” he says.
In turn, Colosimo says he’s been referring a bunch of other prospective customers to Bloom. “I just started saying, ‘Hey, if you don’t have your manufacturing figured out, there’s Justin and Chris, and there’s this team — they’re doing what you need,” he says. “If that wasn’t an option, it was: they’re all gonna go to China.”
Image Credits: Land Moto
USA! USA!
While it’s a tempting narrative, Nolte and Kosmides say Bloom is not just some nationalistic manufacturing play. It’s more about filling the obvious needs if companies like the ones they’ve already run are going to succeed at scale — or have a chance at trying something new at smaller scale.
“It’s not a whole, like, ‘let’s do it in America because America is the best’ thing,” Nolte says. “So many companies would love to have options for domestic assembly and manufacturing. But there’s there’s very little out there.”
Kosmides, who says he was touring European bicycle factories when this whole “crazy” idea first hit him, says he remembers thinking: “Why aren’t we even doing a basic amount of this in the U.S.?”
Now the hard work begins.
“We’re not trying to compete with Asia,” Nolte says. “But I think we do need to make our best shot to be competitive with these different places. And if we’re going to do that, we really have to put our best foot forward.”
