French startup Upway, which sells refurbished e-bikes, has raised a $30m Series B — a fresh injection of cash that comes even as some better-funded players in the micromobility sector are facing a tough year.
The round, led by Korelya Capital — which also counts mobility app Bolt among its portfolio companies — included returning investors Sequoia, Exor Ventures and European climate fund Transition. It brings total funding for Upway to $60m since the startup launched two years ago.
Upway buys second-hand electric bikes from retailers, manufacturers and users and refurbishes them in its own warehouses before selling them to consumers with a one-year warranty.
It acts as a trusted intermediary for buyers who would otherwise be reluctant to purchase an electric bike through second-hand marketplaces.
“If the battery and the engine turn out to be defective after a couple of weeks and you paid €2,000 for the bike, that’s a real issue,” says Toussaint Wattinne, cofounder of Upway. “We created Upway to bring more trust to the e-bike second-hand market.”
Wattinne says that 5.5m new electric bikes are sold in Europe every year and 1m in the US, making second-hand electric bikes a “colossal market”.
“The yearly growth is fairly strong and we are slowly evolving towards numbers that are similar to those of cars,” he says. “That is, in about a decade, 10-13m new electric bikes will be sold every year in Europe.”
According to the company’s own estimates, this could represent between 12-20m second-hand e-bikes sold on the market annually.
The micromobility market has recently been making headlines as formerly well-capitalised startups in the sector struggle to make ends meet.
Earlier this year, e-bike startup VanMoof — which had raised close to $200m from investors including Balderton and Felix Capital — was declared bankrupt. The company has since been acquired by British technology company McLaren Applied.
German e-scooter company Tier has also been struggling to turn a profit and is reported to be in acquisition talks.
Wattinne says that as demand for mobility services like e-bikes exploded during the pandemic, some businesses overstocked products — burning cash and relying on business models that didn’t work when demand returned to normal and investor money became scarcer.
Upway’s business model enables the company to withstand these variations in demand, according to the founder. Bikes spend only about a couple of weeks in the warehouse while they are being refurbished — meaning that stock levels can be planned from one month to the next, where traditional manufacturers typically need to order components up to a year in advance.
“We have a healthy financial equation,” says Wattinne. “And this last round of fundraising in the current VC market demonstrates that.”
Heading to the US
With the new funds, Upway is planning to increase the number of bikes it can refurbish. The company has opened three warehouses to date — in Paris, Berlin and New York — where it has refurbished 20k bikes over the past two years. In the next five to ten years, Wattinne says, the objective is to get to a million bikes a year.
To do so, the team is planning to double the size of the Paris-based warehouse and open a second US warehouse in Los Angeles.
The US has turned out to be a promising market for Upway and the company is determined to strengthen its footprint across the Atlantic.
“The US was our most successful launch,” says Wattinne. “We carried out more refurbishings and sales in the first nine months of launching in the US than we did when we launched in France and Germany respectively. There is clearly huge appetite for e-bikes there.”
Upway is hoping to double the number of staff who are based in the US, with the addition of a 15-strong team in Los Angeles to complete the team of 15 people currently based in New York.