Why Swytch doesn’t need VC funding
The era of the pandemic taught many of us that bikes are a great way to get around cities. Doubly so if it’s e-bikes, packed with batteries to help reduce the amount of sweat needed to get somewhere. Swytch Technology, a startup that builds e-bike conversion kits, isn’t targeting your average rider in the US or Europe, however. Instead, the UK-based startup is offering regular cyclists a way to turn their existing bike into something with a bit more punch.
Swytch’s conversion kit is one of the lightest and smallest on the market, similar in size to a large smartphone and weighing just 1.5 pounds. It charges in an hour, has a range of 10 miles, and can easily be installed on bikes by anyone “who knows how to use an Allen key and has assembled an Ikea piece of furniture,” co-founder and CEO Oliver Montague told TechCrunch+ .
Oh, and if you pre-order, it’s only about $500.
Swytch was launched in 2017 via an Indiegogo campaign, during which Montague discovered the benefits of crowdfunding when launching a new product.
Crowdfunding eventually gave way to crowdshopping, which involves asking customers to put down a deposit on a kit to be delivered at a later date. This, Montague says, helped Swytch scale quickly for a small company without major venture capital funding by eliminating the need to hold too much inventory. Instead, Swytch uses deposit money to fund near-pay-per-view production.
To date, Swytch has shipped over 70,000 kits worldwide. There is a waiting list of over 1.5 million customers who have shown interest in the next release; Swytch recently had to close pre-orders as it sold out until May and is busy processing more than 5,000 orders per month to customers today. Its next batch of stock will be available for delivery in June, and pre-orders will reopen next month.
The company is no exception. Swytch is moving into its next phase of growth, which could involve new product offerings and new partnerships. So we sat down with Montague to discuss the pitfalls of venture capital funding, why keeping inventory on hand exposes you to risk, and how Swytch moved so quickly without raising much equity.
(Editor’s note: The following interview, part of an ongoing series with founders building transportation companies, has been edited for length and clarity.)
Swytch was able to scale fairly quickly without relying on much or no venture capital funding. You say it’s because of your “crowdshopping” model. Can you explain how this differs from crowdfunding?
Crowdfunding is when lots of people get together and get big discounts to support a new product that will be released in the future. Maybe. And that’s the big thing about crowdfunding: the big “maybe” at the end. Many crowdfunding projects never deliver. Or they deliver something, but it doesn’t work. Or it works, but there’s no customer service, and the company folds a year later.
Leave a Reply