NZ's Ubco raises $3.95 million to power electric farm bike

Enterprise Angels executive director Bill Murphy said going offshore had been key to obtaining the latest funding.

Ubco, a New Zealand tech company that has designed an electric farm bike, successfully raised $3.95 million in funding in the US, Australia and New Zealand.

US investors Bob and Ethan Ralston and US expansion and acquisition company Spring Capital invested US$1 million in the company and then Ubco raised a further $2.5 million from New Zealand and Australian investors. Ubco has formed a distribution company UBCO US LLC, based in Oregon. Bob Ralston will now join the Ubco board while Ethan Ralston will be a managing member of the LLC.

Enterprise Angels, an early-stage investment group in New Zealand, led a Series A funding round, facilitating the investment of $860,000 in July 2016. Bill Murphy, executive director of Enterprise Angels, said going offshore had been key to obtaining the latest funding.

"It really highlights how for many New Zealand startups the CEO has to leave these shores to put in 'face time' and wear out shoe leather to succeed," he said in a statement. Research earlier this year by Massey University Master of Management student Hattaf Ansari showed entrepreneurs are encouraged to chase global markets if they want to win backing for their early stage ventures, with investors having their eye firmly set on international markets.

"Securing entry into the US market is a real highlight for Ubco and secures us a profile that we will leverage off in other significant markets," said Ubco board chairman Deion Campbell.

The company's Ubco 2x2 is designed in New Zealand and uses advances in electric motor design and battery technology to create a lightweight, versatile utility vehicle. The company has also made inroads in Australia, where it has officially signed Daviesway as its rural distributor.

(BusinessDesk)


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Don't think so. Maybe? I had for many years a half share in a 1000 hectare steep country forest.Possibly on a flat dairy unit. If I was a Dragon I would say No.

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International expansion was the only route for Ubco and one where one or more international financing partners (either VCs or longer-term private investors) with experience in key markets would provide more than just capital. Good work by Enterprise and Snowballeffect - when I saw the offering I liked it immediately as it was industrial tech - this is still where I believe NZ is not active enough from an investor side with too much emphasis on "silicon valley" models. Industrial tech can provide true niche technology that can compete globally. Yes it is in a new and growing sector but so was Segway and it became the de facto product so I believe that Ubco with its unique design, NZ heritage, customisation potential and sector focus will be picked up by international distributors and consumers. Finally I also believe they can scale the production to be cash flow positive at different output levels which means, self-sustaining with new capital used for step functions in production and sales channel development.

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Did you invest?

What did you think of Balex Marine, ticks the same boxes.

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I would have made the comparison with Sealegs rather than Balex as Balex was not a standalone product but an add-on system that requires the buyer to see value in adding on another bit of kit. Both are about the value proposition to an end user but Ubco 2x2 should have more potential but the question in all these cases including Sealegs, is how big is the market, is there any growth at all, what share can I take and is this share profitable.

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Its very easy to scale production on anything. That should be the least of their worries. It will all come down to sales.

Its very cheap to run farm vehicles on petrol as you are able to claim all the tax component back on the petrol.

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Actually its not easy to scale as many component parts have to be bought in minimum quantities that sometimes don't match inventory turns and of course, to reduce costs which were noted below, you need to have higher order volumes. That's why I focus on working capital for manufacturing companies. Agree with everyone on sales, but they are selling which is a start and in Europe there is now a massive increase in electric bikes - the Ubco for example could be used where loads need to be carried for postal and delivery services. Of course there are few barriers so building a brand and selecting international distribution channels will be key...and I wouldn't ignore Europe as a key market. Icebreaker made their first key inroads in the German, French and Swiss markets where customers understood the quality and performance.

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In a May 11 interview with NBR, Ubco CEO Tim Allan said his company could scale through its manufacturing deal with Chinese electric bike maker Yadea (which currently produces 3 million vehicles a year, so his goal of 10,000 a year within four years is small potatoes by Yadea's standards. Allan also addresses an IP protection question in the interview). See - or hear - also Claudia Batten's comments on overcoming the difficulties of scaling in our latest instalment of Sunday Business.

Allan included postal services as a target market for his company's first type-rated bike, due as soon as next month (type-rated = could be registered to ride on public roads).

Ubco's nex bike will also have a more powerful battery (the better to charge other devices and tools and the go) and will release a standalone battery -- which Allan says could be as big a line as business as the bikes.

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In a May 11 interview with NBR, Ubco CEO Tim Allan was asked what problem his bike was trying to solve, given how cheap petrol-powered bikes are to run.

He said a key selling point for his company's bikes was that they run silently. He also said they would be cheaper to maintain -- especially for farming companies in the US that own multiple properties -- because they have fewer moving parts.

He also sees the 2x2 ($NZ6999 or $US5999) as attractively priced vs the competition.

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Hope, the bike come with USB charging slots and Bluetooth

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Not sure about Bluetooth but pretty sure it has USB ports. And normal power point too.

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Ubco's 2x2 has two USB ports and a 12v plug. No Bluetooth. Specs here.

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Show me the sales - opening an office in the US is a highlight give me a break.

The good news - at least they are still alive and giving it a go. Balex Marine had global distribution - just no sales.

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In a May 11 interview with NBR, Ubco CEO Tim Allan said his company had sold 150 bikes since the 2x2 was introduced in early 2016.

He said it was targetting 10,000 sales within four years, in part through its new US partnership.

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I think it is great what they have done and wish them all the best.

My concern is that the product is not defendable. The frame is utilitarian so easily copied. The battery is a battery and the motors and other components probably not that unique. The cost is also too high compared to existing technology and the benifits minimal.

Their main advantage is early mover and the hope other (larger) manufacturers don't decide to copy them into what is (currently) a niche market.

It could be a great business but not the risk reward needed for an angel investment. I wonder it will end up on my list of missed opportunities.

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It is very hard to start a business and scale it up. These guys should be commended. However some serious questions need to be answered.

Who actually needs an electric farm bike?
Are they going to now focus on in town bikes? There are already many established players there
Do they want to sell batteries now? Good luck with that

This is is super high risk investment. I only hope that the tax payer doesn't keep funding it. Via Lotus, via co funded investment. Via NZTE and via Callaghan.

It's now been privately funded and it should remain that way. Let the investors take the risk not the tax payer

I wonder what Vic Crone thinks?

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The improvement of components that make up the bike is moving apace. Smaller, lighter, longer lasting, quicker charging etc. An exciting space but high risk. Good luck to them though.

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Wow, just had a look at the product and man is that a rip off...

Does this actually appeal to farmers?..

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I've ridden the bike briefly and loved it - the 2wd gave tremendous confidence and control on gravel.
As a rider I'm waiting for the commercialisation of road-speed (i.e. 100km+) 2WD ebikes. Th real prize lies with the early adopters of commercial volumes of high performance ebikes. There is a lot of promise but little shipping in this space.

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