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2023 Brompton C Line Explore - riding 4.jpgBrompton confirms £19 million investment in first equity capital raise for 35 years
Brompton has partnered with capital investors BGF to confirm the folding bike manufacturer's first equity capital raise for 35 years, totalling £19 million of investment.
The move sees BGF, one of the UK and Ireland's "most experienced growth capital investors", with £3.5 billion invested in over 500 companies since 2011, take a minority stake "to support Brompton's ambition to create urban freedom for happier lives".
> Would you spend £25,000 on a secondhand Brompton?
Speaking about the investment, Brompton CEO Will Butler-Adams said it is important the brand "moves faster" to help reduce carbon emissions in cities.
"Over the last two decades, Brompton has grown organically at circa 20 per cent a year, funded by reinvesting our profits," he explained. "For the year ended March 2023, turnover grew 21 per cent to £130m, supported by the launch of the Superlight T Line and Electric P Line products.
"We export 80 per cent of our bikes to 46 countries, and in November 2022 made our one-millionth bike, a great achievement. But this is not enough, we need to move faster.
"The impact of climate change is being felt by us all and the greatest carbon emissions come from our cities where most of the world’s population now lives. Our team at Brompton are brimming with ideas to accelerate our growth through product innovation, storytelling, outstanding stores and having fun with our amazing community. But if we are really going to go for it, we need to strengthen our balance sheet to give us the confidence to be more ambitious."
Adding to Butler-Adams' comments, Daina Spedding of BGF said they are "incredibly excited to be backing an iconic British brand that is rich in heritage and engineering prowess".
"From the outset, there has been a clear synergy between Brompton and BGF, with shared long-term goals and a focus on sustainable growth that is good for both people and planet," she said.
"We look forward to supporting the business as it continues to expand into new markets and invest in new technologies and manufacturing capabilities to meet ever-growing demand for its revolutionary cycling range."
In February, Butler-Adams bemoaned "bloody Brexit" among other challenges for the ongoing problems within the bike industry. Noting the hit on the company's pre-tax profit for the year ending March 2022, down 24 per cent to £7.3 million despite revenues rising 40 per cent year-on-year, he put the fall down to wage inflation and a rise in the cost of materials.
Dan is the road.cc news editor and joined in 2020 having previously written about nearly every other sport under the sun for the Express, and the weird and wonderful world of non-league football for The Non-League Paper. Dan has been at road.cc for four years and mainly writes news and tech articles as well as the occasional feature. He has hopefully kept you entertained on the live blog too.
Never fast enough to take things on the bike too seriously, when he's not working you'll find him exploring the south of England by two wheels at a leisurely weekend pace, or enjoying his favourite Scottish roads when visiting family. Sometimes he'll even load up the bags and ride up the whole way, he's a bit strange like that.
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11 comments
I v much doubt that this investment will go into cheaper Brommies
Everyone has their eye on the electric market these days - and that requires investment in order to scale up. Quite frankly, everyone who wants a normal Brompton has probably already got one.
But as cycling provision in cities improves, and car access becomes less prevalant, and subsidies/incentives for electric transport ramp up I expect there will be a gap in the market to fill.
Once you've bitten the bullet on the cost of an electric bike, it's not much more to go "well, I'll spend a bit extra for the convenience & secrurity of a Brompton".
I note that the Turnover is mentioned for the year to 31st March 2023 as having increased but there is no indication of the last year's profit in any of the announcements of the equity investment. It'll be sometime before they are required to file at Companies House (last was in Jan 2023). To keep growing they are seeking a new factory in Kent to be up and running by 2027 so definitely have a positive plan for the future.
My first thought is that this is a bad sign. Circa 20% growth for 20 years and they need capital?! Do they expect to be 100% of all bicycles sold in another 20 years of growth?
My first thought is that if he is serious about getting Bromptons into more hands to combat climate change he needs to make a £500 model.
I'm willing to bet that's not something he want to do though...
He talks a good game but......
Bromptons are fantastic bikes. But they are very expensive and a bit niche. Would a €500 Brompton be any good? The most basic Brompton is a frame and a 2 speed hub. And that's about 1K. I suppose you could remove the hub and make it a single speed but that would make the bike good for only short, flat journeys. (Which is what is does most of the time - train station to office)
I think you have fallen for the hype. Bromptoms are expensive for 4 reasons in rough order of cause.
1. They chose them to be - my guess is their margins are well above bike industry norms, and they are frightened of undercutting their money making models.
2. Volumes - PR aside they dont want to be a volume manufacturer.
3. Insistence on custom parts, custom hubs derailluer, brakes, shifters etc.
4. UK Manufacturing.
Imagine a Decathlon X Brompton model.....
(Dont get me wrong I think they are a fantastic bike and a brilliant example of a British firm but this is a classic case of watching what they do not what Butler-Adams says)
Regarding No3, I presume that the fold sets constraints for the width of the dropouts and hubs. This hobbles the design somewhat. I'd like to see some of the money spent on what got Brompton started, but which has been conspicuously missing ever since - innovation. Innovation to overcome the design constraints imposed by the fold, without compromising the benefits of the fold. Hopefully thereby opening the way to multispeed hub gears, belt drive, disc brakes, etc. Something like the Tern Verge S8i, but à la Brompton.
There are third-party conversions available for disc brakes, Rohloff hubs, belt drive, etc, for example https://www.kinetics-online.co.uk/folding-bikes/brompton/ although you're getting what you pay for, it's not cheap. So I think these options are possible without compromising the fold and the Brompton-ness, but I guess Brompton choose not to do it.
Update : Whoops Mark1a beat me to it.
Correct on the lack of innovation - for instnance you can get aftermarket rear triangles with standard spacing or even a disc conversion - see
https://www.kinetics-online.co.uk/folding-bikes/brompton/
Agree with Squirrel, climate change needs masses of people cycling and Xiaomi makes a e-folder at the same price of the intro Brompton and other manufacturers make quality geared options at €500.
I expect from this Brombton investment to see more virgin cow leather handlebar grips and titanium stands.
I reckon there's room for both. It seems their business model works well enough for them so whatever they say I'd be surprised if they also started churning out tens of thousands of sub-200 quid folders.
It might not be entirely marketing guff though. Are there not cases where the existence of some notable premium brands and models in limited numbers was part of the motivation for many more folks to go out and buy said objects? Normally from various other concerns manufacturing much cheaper "look-alike" versions. I'm thinking of cars some decades back here but I imagine you can think of other examples.