Why Swytch doesn’t need VC funding
The pandemic era taught many of us that bikes are a great way to get around cities. Doubly so if they are e-bikes, replete with batteries to help reduce the amount of sweat required to get somewhere. Swytch Technology, a startup that builds e-bike conversion kits, isn’t targeting your average cyclist in the United States or Europe, however. Instead, the U.K.-based startup offers regular bike riders a way to turn their existing bike into something with a little more oomph.
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 recharges in one hour, provides 10 miles of range and can easily be fitted onto bikes by anyone who “knows how to use an Allen key and has put together a piece of Ikea furniture,” co-founder and CEO Oliver Montague told TechCrunch+.
Oh, and if you preorder, it only costs around $500.
Swytch launched in 2017 via an Indiegogo campaign, during which time Montague learned about the benefits of crowdfunding when launching a new product.
Crowdfunding eventually gave way to crowdshopping, which involves having customers pay a deposit on a kit to be delivered at a future date. This, Montague says, has helped Swytch scale quickly for a small company without major VC funding by eliminating the need to hold onto too much inventory. Instead, Swytch uses the money from deposits to fund production on an almost a la carte basis.
To date, Swytch has shipped over 70,000 kits globally. There’s a waitlist of over 1.5 million customers who have registered interest in the next release; Swytch recently had to close preorders because it is sold out until May and is busy fulfilling over 5,000 orders per month to customers today. Its next batch of stock will be available for delivery in June, and preorders will reopen next month.
The company isn’t sitting still. Swytch is moving onto its next phase of growth, which might involve new product offerings and partnerships. So we sat down with Montague to discuss the pitfalls of VC funding, why keeping stock on hand opens you up to risk and how Swytch scaled so quickly without raising much equity.
(Editor’s note: The following interview, part of an ongoing series with founders who are building transportation companies, has been edited for length and clarity.)
Swytch has been able to scale quite rapidly without relying on much, or any, venture capital funding. You say it’s because of your “crowdshopping” model. Can you explain how that’s different from crowdfunding?
Crowdfunding is when lots of people get together and get big discounts to support a new product that will be delivered in the future. Maybe. And that’s the big thing about crowdfunding: the big “maybe” at the end. Lots of crowdfunding projects never deliver anything. 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.