Rad Power Bikes reaches deal to sell itself for $13.2 million

Rad Power Bikes, a prominent player in the electric bike sector, has struck a deal to sell its assets to Life Electric Vehicles Holdings (Life EV) for approximately $13.2 million. This agreement comes just over a month after Rad Power initiated bankruptcy proceedings. Based in Florida, Life EV is positioned as a developer, manufacturer, and distributor within the light electric vehicle market. While the company features several electric bikes on its website, many of these products were marked as 'sold out' at the time of reporting. Recent court documents reveal that an auction for Rad Power's assets took place on January 22, involving five different bidders. The auction commenced with an opening offer of $8 million, ultimately leading to Life EV securing the winning bid. When factoring in Rad Power’s liabilities, the bid's total value rises to $14.9 million. Another electric bike manufacturer, Retrospec, placed the second-highest bid at $13 million and is designated as the backup bidder if the transaction with Life EV does not proceed. This acquisition represents a significant decline from Rad Power’s peak valuation of $1.65 billion, achieved in October 2021, according to PitchBook. The company has garnered a total of $329.2 million in funding over its operational history. Before finalizing, the sale must receive approval from a bankruptcy judge. Rad Power is not alone in facing financial challenges; other companies in the micromobility sector, such as VanMoof and Cake, have also undergone restructuring and changed ownership. The scooter firm Bird has similarly navigated bankruptcy. The future direction of Rad Power under Life EV remains uncertain, as Life EV CEO Robert Provost directed inquiries back to Rad Power. He mentioned, "There is still a process underway and there is an exciting future being planned for Rad Power." Rad Power experienced a surge in sales during the pandemic but has struggled to maintain that momentum post-pandemic. The company has undergone several layoffs, faced leadership changes, and recently dealt with safety concerns linked to its older battery models, which were associated with 31 reported fires. Rad Power has publicly defended its battery safety, expressing disagreement with the Consumer Product Safety Commission’s assessment of its products.