It's been 3 months now since the BikeExchange Ltd (ASX: BEX) initial public offering (IPO) on 9 February.

The company, which provides an online cycling market place, connecting brands, retailers and distributors to customers across the globe, has been around as a private entity far longer than 3 months. It was founded in Melbourne back in 2007 by Sam Salter and Jason Wyatt.

Today BikeExchange hosts more than 1,500 brands, 1,640 retailers and 900,000 products globally. The latest figures indicate it attracts 28 million customers annually.

According to BikeExchange's Global CEO Mark Watkin, "Our purpose is to make it easy for customers to buy and sell all things bike."

Earlier today the Motely Fool reached out to Watkin to get his take on how the company's been tracking so far, and what he sees ahead.

Growth across all revenue sources

"We were very pleased to get to that quarterly set of results. That's a milestone for us," Watkin said, referring to BikeExchange's first quarter results (Q3 FY21) as a listed company.

The company reported solid growth across all its sources of revenue, along with record look-through total transaction value, which increased 220% over the prior corresponding period.

Noting that BikeExchange maintained a net cash position of $18.9 million, as of 31 March, Watkin said:

The highlight there is we achieved that growth without having to deploy the capital raised in the IPO. We take a lot of confidence from that. We're in a phase now of strategically planning ahead, particularly for FY22 – growing subscriptions, growing ecommerce transactions and so forth.

All markets are not created equal

Not every geographic market BikeExchange operates in has grown equally fast.

"Europe has been a standout," Watkin told us.

Indeed, revenue in Q3 from its European operations grew by 134% over the prior corresponding period, with growth across all categories. E-commerce was particularly strong, reflecting strong demand for bikes in Europe. Revenue growth in Australia and New Zealand came in at 19%.

According to Watkin:

A lot of that relates to cultural aspects for Europe, where cycling is a mode of transport versus the performance end of the category and sports. There are a lot of insights in that. The use of e-bikes is growing alongside the infrastructure and environmental debates, which have become global debates.

The uptake in Australia has been slower, but the barriers are being broken down. I'm very excited about this next 10 years. Cycling is 100% part of the solution to many of these bigger debates around the environment, transportation, infrastructure, health and convenience.

While COVID lockdowns and social distancing ushered in a rapid uptake in online shopping Down Under, Australia still lags Europe in e-commerce.

Watkin told us:

In Europe 90% plus of transactions are happening online through the platform. And 40-50% of those transactions are e-bikes. Europe has up to 30% of e-commerce as a total of retail where in Australia it's single digits still. But those barriers are being broken down, the online influence is there now.

As for Australia's stringent bicycle helmet laws, Watkin said it remains a big debate. "For some people it can be a barrier."

He added, "In Europe you can argue it's safer because the infrastructure supports bikes. Infrastructure is a key component for the everyday use of a bike. Personally, I believe helmets are important."

The bank account is full…what now?

Bringing the conversation back to BikeExchange's $18.9 million in net cash, we asked what the company's plans are to deploy the IPO capital.

Watkin said that sales and marketing were core focus areas.

"Marketing, particularly in some of the regions, will be very important. SEO [search engine optimisation] and SEM [search engine marketing] has always been an important part."

The company is also looking to add key staff.

"We've been a very lean, capital light business. So, there'll be some key hires that we'll make in key function areas… not tied to any geography."

BikeExchange will also look at enhancing its technology.

Our core platform is Marketplacer, a robust engine. But I think there are opportunities for us to enhance things, particularly on the front end… Personalisation for the consumer is a really important area. We've started that process now.

Watkin added that the company is interested in pursuing, "Anything that helps us enable the retailer and the brands to sell more products and reach more people, and for the consumer to find what they need."

The bank account is full but we need to deploy it appropriately. In this, core areas are the key ones. The EU and the US are the big markets where we've got significant runways, so we have a big focus on those regions.

How quality can drive growth

BikeExchange's growth figures for Q3 FY21 were impressive. The Motley Fool wanted to know if that level of growth is sustainable.

According to Watkin, "We're confident we can keep up the growth rates. Whether that's a mirror of the growth we had in the past quarter is hard to say."

We think the growth patterns are sustainable, but it's going to come in a slightly different way as we scale out the businesses. A lot of market places get 80% of their volume from 20% of their customer base. That comes down to quality product, quality retailers, etc.

We find that very much. The quality product retailer that we're working with, the availability of that product, drives good demand and awareness. This has definitely been part of our strategy.

He pointed to the US and the EU as being the primary drivers for growth in the medium term.

If you take America, there are probably 4,500 to 5,000 [cycling] retailers in the country. The objective is not to get all of them. The objective is 1,500-2,000 quality retailers that are good operators with good products on the platform, which makes the destination compelling for the consumer.

We're [currently] at single digit penetration in the EU and the US. With capital growth coming into the business, we hope we're going to see good growth rates going on quarter on quarter.

Risks and opportunities in the year ahead

The uncertainty that continues to be thrown up by COVID-19 is the only real risk Watkin foresees over the coming year. "But we worked through that whole pandemic and we're still going strong. Productivity went up, the team bonded even more around the world. We've taken a lot of comfort from that," he said.

Aside from the unpredictable nature of the virus, Watkin doesn't foresee any major risks for the company over the coming months.

"We're in a pretty sustainable category," he told us. "We believe cycling is part of the solution to the big macro trends that are happening. Electric cars aren't the sole answer."

Watkin is focusing on the company's existing growth markets before branching into new turf.

We've got first mover advantage, we've got good foundations, and we've got a good runway.

The temptation is to keep expanding into new countries in the short term. But I want us to be 100% focused on what we've got. Two huge regions in the US and EU. Latin America is equally big. Let's just focus on those, and prove the model out.

At the same time, we can get our operational model absolutely solid so we can replicate it more easily into those new markets.

Watkin also said the company will work to further aid consumers with their purchasing decisions.

The average person on the street doesn't know a lot about bikes. Like utility bikes – the cargo bikes where you can carry your children – there's a huge opportunity there. And it's a technical purchase, which can be a little intimidating. If we can be a destination that helps them, that's a great opportunity.

Coupled with that, a category where bikes can be seen as transportation. In Australia this definitely needs a bit of reframing. Getting equality on the roads is a big topic area. Our big opportunity is helping countries across the world establish that even further.

It's a fragmented industry, and we're trying to bring that together.

The post How BikeExchange (ASX:BEX) CEO Mark Watkin plans to deploy $18.9 million appeared first on The Motley Fool Australia.

The BikeExchange Ltd (ASX: BEX) share price has jumped 9.5% higher today as investors react to Wednesday's strong quarterly result.

Why is the BikeExchange share price rocketing higher?

On Wednesday, BikeExchange provided its March quarterly update for the period ended 31 March 2021 (Q3 2021).

The Aussie online cycling marketplace reported net cash of $18.9 million following a successful $20 million initial public offering (IPO). The BikeExchange share price surged 23% higher upon listing after listing at $0.26 per share.

BikeExchange reported "solid growth" across all sources of revenue in the March quarter highlighted by total transaction value (TTV) up 220% compared to the prior corresponding period (pcp).

A record number of consumer transactions helped spark 142% growth in transaction volume compared to Q3 2020. Notably, active retail accounts were also up from December 2020 numbers.

BikeExchange recorded 7.0 million traffic sessions for the March quarter – an 87% increase on pcp. Yet another highlight was annualised sales enquiry value of over $1.6 billion delivered to retailers. The BikeExchange share price has today rocketed 9.5% higher after also gaining 5% on Thursday.

Global CEO Mark Watkin said, "The Q3 growth has been achieved to date without real deployment of the capital raised". "We're now looking forward to further growth, helping us realise our purpose of making it easy for customers to buy and sell all things bike", he added.

BikeExchange reported look through revenue up 54 to $1.4 million with look through e-commerce commission up 847% versus Q3 2020. Subscription revenue grew month on month with March 2021 revenue up 6% on December 2020 figures.

Foolish takeaway

The BikeExchange share price has been on fire today on the back of the high growth figures. It follows a strategic partnership agreement with Auteco, a Colombian motorcycle assembler and electric vehicle distributor.

The Aussie marketplace also added 5 new employees to the company in line with strong growth. BikeExchange shares remain down from the $0.26 per share listing price despite Friday's gains.

The post The BikeExchange (ASX:BEX) share price is surging. Here's why. appeared first on The Motley Fool Australia.

The Bikeexchange Ltd Fully Paid Ord. Shrs (ASX: BEX) share price stormed higher in late trade today as the company released its half-yearly report.

The BikeExchange share price closed 6.67% higher today at 24 cents.

What did BikeExchange report?

BikeExchange, which only listed on the ASX earlier this month, reported revenue of $2.005 million for H1 Fy21.

The company reported a loss of $79,100 for the half-year ending 31 December 2020, a drop from the $165,522 profit achieved for the same period in 2019. The company attributed the loss largely to initial public offering (IPO) costs.

BikeExchange advised that operations progressed well during the period as the company raised $20 million in new capital.

Furthermore, trading in the second half of FY21 has started well with January e-commerce transactions showing strong growth on the prior corresponding period (pcp). Overall the group expects the second half of FY21 to demonstrate meaningful total transaction value and revenue growth on that recorded by the BikeExchange Group for the first half of FY21.

The subscription revenue run rate was positive entering the third quarter with increases across retailer sign-ups providing an increasing contribution. In the coming half, the group expects to interact closely with its retail and brand customer base. This will assist and enable them further with consumer engagement and organic growth.

Outlook

Looking ahead, BikeExchange expects continued strong growth in e-commerce. The company is also looking to improve its conversion and commission rates with a boost from increased marketing.

Also aiding to growth, revitalised media partnerships are expected to contribute uplift to media revenues from the 4th quarter of FY21. BikeExchange also noted that there will be new products launching in the next financial year.

About the BikeExchange share price

BikeExchange is an online global marketplace exclusively dealing with bikes and all things related. Operating in 8 countries, the marketplace aims to provide an efficient, technology-driven platform to connect consumers with retailers of bicycle products and accessories.

Since listing on 9 February this year, the BikeExchange share price has lost 7.69%, falling from 26 to 24 cents.

The post Why the BikeExchange (ASX:BEX) share price is up 7% appeared first on The Motley Fool Australia.

Last week on Tuesday 9 February, Bikeexchange Ltd (ASX: BEX) listed on the ASX for the first time.

The company reaches 29 million consumers each year. It provides a global online cycling marketplace, allowing brands, retailers and distributors to connect with their customers worldwide.

BikeExchange had raised $20 million at 26 cents per share as part of its initial public offering (IPO), and the BikeExchange share price reached 28 cents on its first day. Shares closed yesterday's trade at 26 cents per share, up 4% for the day.

With the company now 1 week into its publicly listed status, the Motley Fool reached out to Mark Watkin, Global CEO of BikeExchange.

Read on for the full interview…

BikeExchange one week in…

What are your thoughts following the first week of trading as an ASX listed company?

We have been very excited to reach the milestone of listing on the ASX, after raising $20 million at the issue price of 26 cents. Up until this point, we had been building our global marketplace on a capital-light basis, and the IPO was an opportunity to scale and build off the strong foundations we have created over the past 13 years.

Our significant shareholders include the BikeExchange founders, Gerry Ryan (JAYCO founder) and high-quality institutional investors such as Bombora and SG Hiscock & Company.

The growth opportunity is significant for BikeExchange and the ASX listing provides a great growth platform, though the hard work starts now. We are committed to a transparent and regular dialogue with our shareholders on this journey and excited about the possibilities.

You currently operate in Australia, Europe, North America and Latin America. Are there expansion plans into Asia or elsewhere?

The business is currently focused on the significant runways we have already established in the key regions of North and South America, the EU, Australia and New Zealand. We will consider appropriate country market expansion, predominantly building in the regions we are already currently present. Such as entering more hubs/countries in Latin America.

Making the best use of the footprint we have created at this time is key and we see great opportunity to increase our market share through strategic partnerships, such as our recent partnership with Trek, one of the largest bike brands in the US and the world.

Competitive advantage

What types of 'moats' or barriers to entry are there with would-be competitors?

BikeExchange considers that it has a competitive advantage in being the leading bicycle marketplace in the industry. The online marketplace model is difficult to replicate and requires a lot of time and investment, creating a high barrier to entry for competition.

To put it into context, after establishing the business in Australia, BikeExchange has spent the last 6 plus years creating and scaling a single category marketplace in multiple countries to lay the foundations for the business as it is today. It is not a business model you can simply "turn the lights on" to in a new country.

Building a marketplace also requires two sides – attracting business customers and consumers. The marketplace needs to be ready to offer the right products and importantly ensure there is the breadth of choice. So you really need to get that right through building strong customer relationships with retailers and brands around the world.

Looking ahead

What's the biggest risk for BikeExchange in the year ahead?

In the short term, the biggest risk would be global stock pressures fuelled by demand during the coronavirus pandemic. We are confident that all the hard work we did pre-COVID on enhancing the quality of our offering to the market will stand us in good stead, supported by the breadth of choice we offer to help consumers navigate the market. This is coupled with the continuation of trends favouring cycling that we have seen through FY20.

For example, site traffic increased by more than 77% and e-commerce transactions increased 154% globally on BikeExchange sites across the first half of FY21 against the previous corresponding period. While the pandemic accelerated growth in the market due to increased leisure and exercise cycling, we are seeing strong trends continue.

Having covered the risk, what's the most significant opportunity ahead for BikeExchange?

The marketplace generated over $1.5 billion in sales leads and enquiries value, annualised from H1 FY21 – all off product listings on the sites. We see a significant opportunity to convert the number of sales leads into transactions on-site through full e-commerce, deposit payments and click and collect in the retailers.

This is one of the growth initiatives planned for the second half of FY21. We are currently running global trials around targeting and converting existing audiences on-site across multiple channels, such as Google and Facebook, with positive results.

Another focus area is growing the number of retailers on the marketplace through strategic partnerships in key regions, such as the US and Europe. We see a significant opportunity in increasing market coverage from less than 10% in both regions to 60% and 40% respectively in each market in the short-medium term.

The post Bikeexchange (ASX:BEX) CEO Mark Watkin on the risks and opportunities ahead appeared first on The Motley Fool Australia.

On its first day of listing on the ASX, BikeExchange Ptd Ltd (ASX: BEX) shares jumped 23.1% to a high of 32 cents. However, at the time of writing, the BikeExchange share price has retreated to 26.75 cents, up 2.9% for the day so far.

The company raised $20 million at an issue price of 26 cents per share as part of its initial public offering (IPO). The raising valued the company at a market capitalisation of $76.9 million.

BikeExchange bills itself as a global marketplace for all things bike. Its online cycling marketplace enables brands, retailers and distributors to connect with customers around the world.

And this morning's BikeExchange share price action, at a time when the All Ordinaries Index (ASX: XAO) is down 0.6% for the day, implies many investors believe in the potential of the newly listed company.

Growth potential in global cycling

BikeExchange operates across eight markets in Australia, Europe, North America and Latin America. According to the company, its addressable global market is over $83 billion.

BikeExchange hosts more 1,500 brands, 1,450 retailers and 600,000 products. It reaches 29 million consumers each year. Globally, the company reported that its marketplace generated over $1.5 billion in sales leads and enquiries value (annualised) in the first half of the 2021 financial year.

Commenting on today's ASX listing, global CEO Mark Watkin said:

Today marks a significant milestone for our business, from its humble beginnings as a concept 14 years ago, to now being a leading global marketplace for all things bike. Our initial public offering will help us to scale our business and support future growth. Cycling, in addition to sport and recreation, is playing an increasing role in mobility and transport globally, as infrastructure and behaviours change…

The funds raised from our initial public offering will be invested in growth initiatives, such as: strategies to convert existing sales leads on our site to e-commerce transactions, increasing the retailer, brand accounts and key partnerships on site, and improving the customer experience through technology and products.

New strategic partnership for BikeExchange

In a busy day for the newly listed BikeExchange, the company also announced a strategic partnership with Latin America-based Auteco Mobility. Auteco is the leading Colombian motorcycle assembler and electric vehicle distributor.

BikeExchange says Auteco's knowledge and network will help scale its business in Colombia and other Latin American countries. BikeExchange has been operating in Columbia since 2017.

Addressing the new strategic partnership, Auteco Mobility board member Daniel Vásquez said:

We believe bicycles will continue to grow in relevance and revolutionise urban transportation as cities world-wide realize the benefits of favouring bicycles over other means of transport, and BikeExchange is uniquely positioned to capture the growth in this trend.

The post BikeExchange (ASX:BEX) share price jumps 23% on ASX IPO appeared first on The Motley Fool Australia.