December 29, 2025
Rad Power Bikes filed for Chapter 11 bankruptcy on December 15, 2025. The Seattle company once stood as North America’s leading e-bike seller, a pandemic-era unicorn valued at over $1 billion. Now it reports assets of $32 million against liabilities of $73 million, with U.S. Customs and Border Protection as its largest creditor—owed $8.4 million in unpaid tariffs.
The obituaries will blame the post-pandemic demand crash, or the tariffs, or bad management. But Rad Power’s death certificate should read differently: killed by the venture capital playbook in an industry that was never built for it.
The cycling industry has now watched multiple VC-backed companies flame out spectacularly. The pattern is consistent enough to be a lesson. High-growth venture models and cycling don’t mesh—and the e-bike boom made that truth impossible to ignore.
Venture capital has a specific logic. Invest in companies that can scale exponentially. Accept losses in the short term to capture market share. Grow fast, raise more, grow faster. The payoff comes from massive exits—IPOs or acquisitions at 10x, 50x, 100x the investment.
This playbook transformed software, social media, and e-commerce. It works brilliantly for products with near-zero marginal costs, network effects, and winner-take-all dynamics.
Bicycles have none of these characteristics.
Yet Rad Power raised $329 million playing the venture game. A $154 million round in October 2021 valued the company at unicorn status. Investors included Durable Capital Partners, Vulcan Capital, and other funds expecting venture-scale returns.
To justify that valuation, Rad needed to become enormous. So it scaled—aggressively. The workforce grew past 1,000 employees. The company expanded into Europe. Retail stores opened. Mobile service vans rolled out. Inventory piled up in anticipation of endless growth.
Then the pandemic boom ended, and Rad Power discovered what the cycling industry has always known: bikes are a slow, steady, margin-tight business that punishes overextension.
Rad Power’s revenue trajectory tells the whole story:
That’s an 80% collapse from peak. No business carrying venture-scale overhead can survive that drop. Rad couldn’t cut fast enough—seven-plus rounds of layoffs reduced headcount from over 1,000 to around 64, but the debt and obligations remained.
The bankruptcy filing lists creditors that reveal the scale of the overshoot: $5.35 million owed to Bangkok Cycle Industrial, $1.4 million to Jinhua Vision Industry, $1.2 million to Fuji-TA Fushida Group. These are manufacturing partners who tooled up for volumes that never materialized.
Rad also owes $8.4 million in tariffs—a bill that accumulated because the company imported at scale expecting to sell at scale. When demand cratered, the tariff obligations didn’t.
The cycling industry operates on fundamentals that venture capital doesn’t want to hear.
Margins are thin. Unlike software, every bike sold requires materials, manufacturing, and shipping. There’s no leveraging server capacity. No zero-marginal-cost distribution. Each unit costs real money to produce.
Growth is linear, not exponential. You can’t “go viral” with bicycles. Market expansion happens gradually through demographic shifts, infrastructure investment, and cultural change. The pandemic was an anomaly—a one-time demand shock, not a new growth curve.
Service is local and labor-intensive. E-bikes need mechanics. They need physical locations or mobile technicians. This infrastructure scales expensively and slowly, not cheaply and fast.
Customers buy infrequently. A bike isn’t a subscription. People buy one every few years, maybe every decade. Customer lifetime value is fundamentally limited compared to SaaS or consumer apps.
The market has a ceiling. There are only so many people who will buy e-bikes in any given year. Unlike social networks, you can’t manufacture demand by making the product free or viral.
Rad Power tried to force venture economics onto this reality. It didn’t work.
Rad isn’t the first venture-backed bike company to hit this wall. Dutch e-bike maker VanMoof declared bankruptcy in July 2023 after burning through over $200 million in funding. Same pattern: massive fundraising, aggressive scaling, pandemic-fueled optimism, post-pandemic collapse.
VanMoof was eventually acquired out of bankruptcy by Lavoie for a fraction of its peak valuation. The new owners immediately abandoned the pure direct-to-consumer model and shifted to third-party service networks.
The lesson was available. Rad Power didn’t—or couldn’t—learn it in time.
Not every e-bike company is failing. The ones that survive share a common trait: they never bought into the venture playbook.
Lectric eBikes, based in Phoenix, has thrived selling affordable e-bikes direct to consumers. The difference? Lectric was profitable from nearly day one. The founders—two friends who started in a garage—took a single private equity investment and kept headcount lean. They didn’t chase unicorn status. They built a sustainable business.
Traditional cycling brands like Trek, Specialized, and Giant have added e-bikes to their lineups without existential drama. They already had dealer networks, service infrastructure, and realistic growth expectations. They didn’t need to invent a new distribution model or scale overnight to satisfy investors.
The cycling industry has always rewarded patience, quality, and relationships. Venture capital rewards speed, scale, and disruption. These values don’t align.
Rad Power’s bankruptcy is part of a broader reckoning. The 2010s and early 2020s saw venture capital flood into categories it didn’t understand, chasing “disruption” in industries with entrenched economics.
Peloton followed a similar arc—pandemic darling to financial crisis. Bird, the scooter company, went bankrupt. WeWork became a cautionary tale. The pattern repeats: massive fundraising, unsustainable growth, inevitable collapse.
Cycling isn’t immune to innovation. E-bikes genuinely expand who can ride and how far. The technology matters. But technology doesn’t change the fundamental economics of manufacturing, distributing, and servicing physical products.
Venture investors wanted Rad Power to be the Tesla of e-bikes—a category-defining company that would dominate a new market. But Tesla succeeded (to the extent it has) by building factories, service networks, and charging infrastructure over many years, funded partly by government subsidies and a founder willing to accept near-bankruptcy multiple times.
Rad Power didn’t have that runway. Venture timelines demanded returns faster than the cycling market could deliver them.
Rad Power is seeking a buyer, hoping to complete a sale within 45-60 days of the bankruptcy filing. The company still has brand equity, customer loyalty, and bikes on the road. Someone may see value worth acquiring.
But any buyer will face the same fundamental question: can you build a sustainable e-bike business without venture-scale expectations?
The answer is almost certainly yes—but it requires accepting cycling-industry economics. Modest growth. Tight margins. Real service networks. Patient capital.
Rad Power’s final CEO, Kathi Lentzsch, had already begun pivoting toward brick-and-mortar retail partnerships before the bankruptcy. That was the right instinct, just too late. The company had already burned through its runway trying to be something the cycling industry couldn’t support.
For entrepreneurs, investors, and industry observers, Rad Power’s bankruptcy offers a clear message: not every industry is venture-backable.
Cycling has supported successful businesses for over a century. It will continue to do so. E-bikes are a genuine growth category with real consumer demand. But the path to success runs through sustainable margins, local relationships, and patient growth—not blitzscaling funded by hundreds of millions in venture capital.
Rad Power raised $329 million and couldn’t make it work. Lectric started in a garage and turned a profit. The difference wasn’t the product or the market. It was the model.
High-growth venture capital needs exponential returns. Cycling delivers linear ones. Until investors accept that mismatch, we’ll keep watching promising bike companies burn through cash and collapse—leaving customers with orphaned products and employees with severance packages.
The bike business has survived world wars, depressions, and the automobile. It will survive venture capital too.
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