Rad Power Bikes
From $1.65B Unicorn to $13.2M Garage Sale: The Pandemic E-Bike Bust
Rad Power Bikes, the Seattle-based e-bike maker that became the largest direct-to-consumer electric bike brand in North America during the COVID-19 boom, filed for Chapter 11 bankruptcy in December 2025 and was ultimately sold to Life Electric Vehicles Holdings for just $13.2 million — a fire-sale price for a company that had raised nearly $330 million in venture capital and once commanded a $1.65 billion valuation. The collapse marked the most prominent casualty of a brutal e-bike shakeout that took out nearly a dozen VC-backed micromobility companies as pandemic-era demand evaporated and a fresh round of Trump-era tariffs on Chinese components squeezed already-thin margins.
Key Figures
Timeline
Mike Radenbaugh, then a high schooler, starts Rad Power Bikes in his parents' garage in Seattle, converting bikes to electric.
Radenbaugh's college friend Ty Collins joins as co-founder; company begins scaling direct-to-consumer e-bike sales.
Raises $23M Series A led by Mack Capital, kickstarting the company's hyper-growth phase.
Pandemic-driven e-bike boom: Rad Power raises additional rounds including a $154M Series D led by TPG Growth at a $1.65B valuation. Becomes largest e-bike brand in North America.
Demand collapses as COVID tailwind fades. Multiple rounds of layoffs begin. CEO Mike Radenbaugh steps aside as part of succession planning.
Another round of significant layoffs as cash burn outpaces shrinking revenue.
Founder-CEO Mike Radenbaugh formally steps down. Turnaround executive Kathi Lentzsch appointed CEO; company pivots from DTC to retail-focused model.
Company warns employees it could shut down without new funding. A 'very promising' last-ditch funding deal falls apart.
U.S. Consumer Product Safety Commission issues warning that older Rad Power batteries pose 'a risk of serious injury and death' after 31 fire reports. Rad Power disputes the characterization.
Rad Power Bikes files for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court. Files with $32M in assets and $73M in liabilities, including $8M+ in disputed unpaid tariffs.
Court approves sale of Rad Power Bikes' assets to Life Electric Vehicles Holdings (Life EV) for $13.2 million — a fraction of the company's last private valuation.
Life EV officially completes acquisition of Rad Power Bikes; brand continues under new ownership.
What Caused It
- 1Pandemic demand hangover: 2020-2021 e-bike boom created a one-time inventory bubble that overshot durable demand by 2-3x
- 2Hardware unit economics: gross margins on $1,000-$2,000 e-bikes couldn't absorb the cost of Chinese-sourced components once tariffs and ocean freight spiked
- 3Tariff shock: Trump-era tariffs on Chinese imports created $8M+ in unpaid CBP liabilities that Rad listed as 'disputed' but couldn't ultimately avoid
- 4Direct-to-consumer model collapse: pandemic-era DTC economics relied on cheap Facebook/Google acquisition; CAC inflation post-2022 destroyed the funnel
- 5VC-scale burn on a hardware business: ~$330M raised, but hardware working capital needs and warranty reserves consumed runway faster than revenue could refill it
- 6Quality and safety issues: 31 reported battery fire incidents and a CPSC warning damaged brand trust at the worst possible moment
- 7Competitive squeeze: bootstrapped competitors like Lectric eBikes operated with positive unit economics while Rad was subsidizing growth with venture capital
Lessons Learned
- 💡A pandemic demand surge is not a new baseline — companies that 5-10x'd revenue in 12-18 months should have banked the windfall, not spent it on growth
- 💡Hardware startups need to clear venture-scale hurdle rates that require either category-defining margins or category-defining scale — Rad had neither
- 💡Reliance on a single geopolitical supply chain (Chinese components) is a bankruptcy waiting to happen; tariffs can wipe out years of margin in a single policy change
- 💡Direct-to-consumer economics deteriorate sharply in rising CAC environments; businesses need a retail or wholesale channel as a CAC hedge
- 💡When a company 'pivots to retail' under a turnaround CEO, it's usually a sign the original model is already broken — earlier, smaller pivots preserve optionality
- 💡Battery safety incidents are an existential risk for micromobility companies — single-digit fire reports can trigger recalls and destroy consumer trust overnight