The pandemic began in an e-bike boom. But like so many other pandemic trends, this boom didn’t last.
Last year, e-bike startups VanMoof and Cake filed for bankruptcy amid the dire micromobility crisis. Tier and Dott merged. Superpedestrian has closed shop. Bird also had to go through a restructuring.
All of these startups may have had different goals, but their problems were pretty similar. Bloom, a new startup based in Detroit, thinks it has the answer: do all the hard work behind the scenes and let these startups focus on the exciting stuff like product design and branding.
It’s an idea so dear to founders Chris Nolte and Justin Kosmides that they packed up and moved to Detroit to build it – Nolte with his one-year-old child and spouse in tow, and Kosmides with his four-pawed companion Artie .
It’s also proving popular; Your customer list is as long as a CVS receipt.
“Everyone is trying to reinvent the wheel,” Nolte said in a recent interview with TechCrunch. “But the reality is that there are proven systems in place and people waste a lot of money by making mistakes and making bad decisions.”
The “silly and scary” flood of VC money in this space in recent years has caused a lot of waste and collateral damage, Kosmides tells TechCrunch. Bloom is the couple’s answer to fixing some of this.
Founded last year, Bloom plans to offer some core services: contract manufacturing, assembly, shipping, and logistics and service. These are tasks for which startups previously had to find individual partners or take them on internally, both of which increase costs and put pressure on the bottom line. It’s these additional ventures that can doom a startup.
“I remember saying, ‘Who’s crazy enough to listen to this crazy idea I have?’ exclaimed Kosmides. “And I went to Chris and talked to him, and he said, ‘Oh, I’ve been thinking about this for so long.’
It might seem crazy at the time, but Nolte says around 30 companies will be working with Bloom in the near future. According to Kosmides, there are more than 100 companies in the pipeline, ranging from startups just past the prototyping stage to “very mature” companies.
Much of this will take place at a manufacturing facility in Michigan, but the duo plans to work with partners in California, Ohio, South Carolina and New York. The goal is to open a 200,000 square meter facility in Detroit with sales and assembly capabilities.
They’ve achieved this with little reach and a team of only about 10 people – although they plan to roughly double that headcount when they close their first round of funding.
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 started using e-bikes when Barack Obama was still president.
He is also a true veteran. Nolte did a tour in the U.S. Army in Iraq, where he drove fuel trucks. After a back injury, he got to know pedal-assist e-bikes. He loved technology and the idea of freeing the country from oil dependence.
“We are constantly dependent on foreign oil,” he says. “I really started to believe in the idea that using human-scale transportation could help reduce the need to participate in such transportation [conflicts].”
Nolte started out as one of the first market leaders in the Propel Bikes sector. 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 station,” he says. “I asked myself: Why are there so many factories in Europe, but there are practically none in the US for bicycles and micromobility?”
Kosmides also co-founded an e-bike company called Vela in 2020 after working at Barclays Investment Bank for almost a decade. He remembers looking at the micromobility industry and thinking, “We’re all misfunding these companies and these vehicles.” (Vela is now run by a new group that’s trying to leverage Bloom’s network, he says.)
The industry has “overfunded companies whose Instagrams were maybe really good and they were really good at marketing, but their product, their development and their sales just weren’t there,” he says.
Last year, the pair realized they were both looking for ways to solve the problems that were beginning to plague some of the most well-known micromobility companies.
The duo found a home base at Newlab in the new mobility innovation district in Detroit’s Michigan Central neighborhood.
It’s only been a year, but there’s been a lot of bloodshed since Bloom’s founding. One of the most notable failures occurred at premium e-bike manufacturer VanMoof. The company filed for bankruptcy last July, leaving thousands of customers uncertain about the functionality 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 owners.)
The trouble continued until early 2024, when boutique motorcycle and bicycle maker Cake filed for bankruptcy so suddenly that it sold its U.S. inventory to an electric mobility store owner in Florida. (This man is now one of Bloom’s clients.)
All this devastation meant the timing was perfect for Bloom.
“Two or three years ago this wasn’t possible. “Everyone was anxious to get the products off the shelves as quickly as possible,” says Kosmides. “But now we’re having this moment where everyone’s asking, ‘How can we not make the same mistakes?'”
Photo credit: Dust Moto
Bloom customers
One of the first companies to take the plunge with Bloom is, perhaps unsurprisingly, a startup that wants to make products for the adventurous.
Colin Godby founded Dust Moto in 2023 with the goal of not only contributing to the electrification of dirt bikes, but also filling a gap by creating an American brand in this space – something that hasn’t really existed thanks to the dominance of Japanese brands like Honda and Yamaha.
So far, Dust has only produced a few initial prototypes. However, they strike a deal with Bloom to use its production space in Detroit to build the next group of production motorcycles. Dust will also use Bloom for final assembly, quality control and fulfillment.
The difference between having Bloom help with all of these parts of the process and doing it alone or finding individual partners can be measured in millions of dollars, according to Godby.
“Instead of having to raise $40 million to build our first dirt bike, it’s about $5 million [million] “We raised $10 million to bring this great product to market,” he says.
It’s also less stressful.
“If we sort this out, it’s all our responsibility, you know what I mean? I have to hire more people, we have to work more hours,” says Godby. “When it’s shared with Bloom… as if the success of their company depends on them being able to nail it.”
This trust was not immediate. The dust-up started before Bloom had really come into contact with many potential customers. After meeting with them late last year, Godby said he was wary of piling on “startup risk on top of startup risk.” But the idea came about when he realized how other industries rely on this type of intermediary company.
“Honestly, when I think about the most fun way to spend my time at Dust, it’s not building a production environment, you know?” he says. “And if you look at the different mature industries, be it aerospace or automotive, Tier 1 suppliers and all of those things, that’s how the game works.”
As far as Bloom’s early partners go, Scott Colosimo is on the opposite end of the spectrum. He spent more than a decade as CEO of a global motorcycle company called Cleveland CycleWerks. Colosimo tells TechCrunch that he tried to “smoothly” transition from a gas vehicle company to an electric vehicle company.
“It became clear very quickly that this was like taking a baker and turning him into a surgeon,” he says. “It’s just different.”
He left the gasoline motorcycle business entirely and founded Land, which is nominally an electric motorcycle company. But it’s also, somewhat sneakily, an energy company based on the connected, replaceable battery that powers the bikes.
Land is heading in this direction because Colosimo says there’s a huge opportunity, especially given the often dismal state of e-bike batteries. And Bloom, he says, makes it much easier to try.
Colosimo says he’s talking to Bloom about making future bikes, especially because Land already has a space in his hometown of Cleveland, Ohio, equipped and ready to build the first run. So what he really wants to do with Bloom is scale the battery platform developed at Land and make it available to other companies.
“If we lived in a perfect world, I would like to put $100 million in a bank account and just focus on the batteries so that we have a viable product in three years,” he says. “VCs aren’t willing to spend $100 million on the hope that you’ll become a unicorn in three years. So the vehicles we’re currently making are largely our own VC. The vehicles currently generate a small margin. It helps advance the battery platform.”
“Right now with e-bikes, if the batteries die, you throw the whole damn thing away. That’s not sustainable,” he says.
Colosimo, for his part, says he has referred a number of other potential clients to Bloom. “I just started saying, ‘Hey, if you don’t have your manufacturing under control, there’s Justin and Chris, and there’s this team – they’ll do what you need,'” he says. “If that wasn’t an option, then: They’ll all go to China.”
Photo credit: Country Moto
UNITED STATES! UNITED STATES!
Although it’s a tempting narrative, Nolte and Kosmides say Bloom isn’t just some nationalistic production play. Rather, it’s about meeting the obvious need when companies like the ones they’ve already run will succeed on a large scale – or have the chance to try something new on a smaller scale.
“It’s not a whole like, ‘Let’s do it in America because America is the best,'” Nolte says. “So many companies would like to have domestic assembly and manufacturing options. But there’s very little out there.”
Kosmides, who says he was touring European bicycle factories when this whole “crazy” idea first occurred to him, says he remembers thinking, “Why don’t we do some of this in the U.S.?”
Now the hard work begins.
“We’re not trying to compete with Asia,” says Nolte. “But I think we have to do our best to be competitive with these different places. And if we want to do that, we really have to do our best.”