Bunch Bikes Electric Cargo Bikes For Families
DEAL
EPISODE SUMMARY
🕓 Air Date: March 26, 2021
Asking For:
$250,000 for 10%
Investor:
Barbara Corcoran
Deal:
$250,000 for 15%
PRODUCT SUMMARY
Bunch Bikes offers electric cargo bikes that allow parents to engage with their children while riding, with a spacious front cargo box for family adventures.
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Background Story
Aaron Powell, the founder of Bunch Bikes, embarked on a remarkable journey from being a middle-school band teacher to a thriving entrepreneur. His transformation began when his daughter was born, prompting a shift in priorities. He decided to take a 90-day maternity leave, during which he realized his desire for a business that would grant him the freedom to prioritize family.
His initial foray into entrepreneurship involved an online jewelry business, which he eventually sold for $300,000 after 18 months of relentless effort. With newfound financial stability, he embarked on a family trip to Sweden, where he had a serendipitous encounter with a unique bike design. Intrigued by the concept, he sought to acquire a similar bike upon returning to the U.S. However, he discovered that such bikes were not readily available in the American market.
Seeing a promising opportunity, Aaron invested $85,000 of his own funds to launch Bunch Bikes. His vision was to bring the joy of family biking to a wider audience by offering electric cargo bikes that would allow parents to connect with their children during rides. This entrepreneurial journey was driven by the desire to show his kids that they could tackle problems and achieve their dreams, a legacy that extends beyond the success of Bunch Bikes.
The Product
Bunch Bikes offers a revolutionary product designed to enhance family outdoor experiences – electric cargo bikes. These bikes are meticulously crafted to provide a unique and enjoyable biking experience for parents and their children. At the heart of the product is the spacious front cargo box, strategically positioned to place young riders in direct view of their parents.
This innovative design fosters interaction, allowing parents to converse, share experiences, and create lasting memories while cruising the outdoors. The cargo box is not just child-friendly; it’s also versatile enough to carry all the essentials for family adventures, whether it’s a picnic, groceries, or a cooler for a day at the park.
One standout feature of Bunch Bikes is the electric assist, making biking accessible to riders of varying skill levels. Even those less experienced with biking can effortlessly enjoy the experience thanks to this feature. Additionally, safety is a priority, as demonstrated by the presence of parking brakes.
Bunch Bikes offers two models: a standard version retailing at $4,295 and a premium model priced at $6,000. While these bikes don’t disassemble easily for transport, they are designed to accommodate up to four children, making them ideal for family outings.
With Bunch Bikes, the goal is to transform the way families enjoy outdoor activities, creating opportunities for bonding and adventure while promoting a healthier and more active lifestyle.
How It Went
The company’s position before Shark Tank
Bunch Bikes has demonstrated impressive performance and growth since its inception. Founded by Aaron Powell in Denton, Texas, the company has steadily expanded its reach and sales, making it a standout player in the family biking industry. The company’s journey began in 2018, and their first year of operation saw sales amounting to $285,000. This was just the beginning, as Bunch Bikes quickly gained traction in the market.
In the subsequent year, their sales soared to an impressive $1.1 million, signaling a strong demand for their innovative products. In the current year, they are on track to achieve sales of $2.2 million, a testament to their continued growth and popularity. Bunch Bikes’ success can be attributed to their unique approach to family biking. They have carved a niche in the market by offering electric cargo bikes that enable parents to engage more intimately with their children during rides. This distinctive feature, combined with the spacious cargo box for family essentials, has resonated with customers across the United States.
In terms of financial health, Bunch Bikes has faced challenges, including a significant loan and credit card debt. However, Aaron Powell’s commitment to the business’s financial stability is evident, with all debts consistently met. Moreover, the company has secured investments from family, friends, and angel investors, further fueling their growth. With a lifetime sales figure of $2.7 million and a promising trajectory, Bunch Bikes stands as a thriving business with significant potential for expansion. Their success story on “Shark Tank” with Barbara Corcoran’s investment is a testament to their market appeal and growth prospects.
The Negotiations:
During the negotiations on “Shark Tank,” Aaron Powell faced a rollercoaster of offers and decisions from the sharks.Initially, four sharks expressed concerns about the business model and distribution. Barbara Corcoran made the first offer, proposing $250,000 for 40% equity. Aaron countered with $250,000 for 20%, highlighting the significant reduction in valuation. Barbara, not willing to budge, responded with $250,000 for a third of the company. Kevin O’Leary entered the conversation by exploring the possibility of a loan component.
He was intrigued by Aaron’s financial challenges and offered $250,000 for 15% with a portion of it as a loan. Aaron didn’t dismiss this idea outright, indicating a willingness to consider it. Barbara then revisited her original offer of $250,000 for 40%, but Aaron declined, recognizing that such a deal wouldn’t work for him. Instead, he counter-offered with $250,000 for 20%, emphasizing the better terms. Barbara was open to negotiation, and after some further discussion, they agreed on a deal of $250,000 for 15% equity.
Barbara’s investment marked a significant turning point for Bunch Bikes, securing a partnership that would propel the business forward. Her willingness to provide both capital and expertise resonated with Aaron’s vision for the company. This successful negotiation was a pivotal moment for Bunch Bikes on “Shark Tank,” cementing their place as a promising player in the family biking industry.
