Rad Power Bikes’ Journey from Success to Bankruptcy: A Seattle E-Bike Pioneer Fights for Survival
In a significant turn of events for the electric bicycle industry, Seattle-based Rad Power Bikes has filed for Chapter 11 bankruptcy protection while simultaneously working toward a potential sale to preserve the brand. The once-thriving e-bike manufacturer, which rose to prominence during the pandemic’s cycling boom, now faces financial turmoil with liabilities of nearly $73 million far exceeding its assets of $32 million. The bankruptcy filing reveals a concerning downward trajectory in gross revenue—from $129.8 million in 2023 to $103.8 million in 2024, with only $63.3 million generated so far this year. Despite these challenges, the company remains committed to continuing operations while seeking a buyer within the next 45-60 days, hoping to maintain relationships with riders, vendors, suppliers, and partners who have supported the brand throughout its journey.
The bankruptcy filing comes at a particularly difficult moment for Rad, arriving just three weeks after the Consumer Product Safety Commission (CPSC) issued a warning advising consumers to stop using certain Rad bikes due to potential dangers posed by their lithium-ion batteries. The CPSC’s November 24th safety alert identified various Rad bike and battery models that “can unexpectedly ignite and explode, posing a fire hazard to consumers, especially when the battery or the harness has been exposed to water and debris.” Rad has vigorously disputed these findings, stating they “strongly disagree with the CPSC’s characterization of certain Rad batteries as defective or unsafe.” The company further claimed that meeting the CPSC’s “all-or-nothing recall demand” would force an immediate shutdown, leaving riders and employees without support—a scenario they’re desperately trying to avoid through the bankruptcy protection process.
The company’s founding story represents a classic entrepreneurial tale of passion and innovation. Conceived in 2007 by Mike Radenbaugh and Ty Collins while they were students at Humboldt State University in Northern California, the pair began by creating custom conversions of traditional bicycles to electric power. After years of custom work, they launched Rad Power Bikes as a direct-to-consumer brand in 2015, pioneering a business model that would eventually transform the e-bike industry. The bankruptcy filing reveals that founder Mike Radenbaugh still holds the largest individual stake at more than 41%, while institutional investors including VCVC V LLC (6.55%) and Durable Capital Master Fund LP (5.79%) maintain significant minority positions. Co-founder Collins retains a 4.23% stake in the company they built together.
Rad’s meteoric rise occurred during the COVID-19 pandemic when demand for e-bikes surged as people sought alternative transportation and outdoor recreation options. The company’s workforce and sales expanded dramatically during this period, culminating in more than $300 million raised from investors in 2021 when the company achieved a valuation of $1.65 billion according to PitchBook—establishing it as one of the few “unicorn” startups in the Seattle region. Currently headquartered in Seattle’s Ballard neighborhood, Rad operates under CEO Kathi Lentzsch, who previously led Bartell Drugs before its sale to Rite-Aid in 2020. Lentzsch, who brings extensive retail leadership experience from companies including Gump’s, Elephant Pharmacy, Enesco, Pottery Barn, and World Market, replaced Phil Molyneux earlier this year after his two-year tenure as CEO.
The financial details revealed in the bankruptcy filing paint a picture of a company struggling with substantial obligations. Rad’s largest unsecured debts include nearly $8.4 million owed to U.S. Customs and Border Protection for tariffs and more than $8 million due to overseas manufacturers—likely reflecting the company’s reliance on global supply chains for its product components. Additionally, insurance companies and individuals seeking to recover payouts related to Rad bikes are collectively owed approximately $4.3 million, with two individuals each owed $1 million for damages, presumably from lawsuits. The company previously filed notice with the Washington state Employment Security Department indicating a potential shutdown as early as January 2024, with 64 jobs potentially affected—highlighting the human cost of the company’s financial struggles.
Despite the grim financial picture and regulatory challenges, Rad Power Bikes maintains a determined outlook. In a statement provided to GeekWire, a company spokesperson acknowledged they were “navigating an extraordinary period of challenge and change” but emphasized they were “not giving up” and remained “focused on doing everything we can to strengthen the future of the Rad brand.” The Chapter 11 filing represents a strategic move to keep the company operating while pursuing what they describe as “the best possible outcome for the people who rely on Rad every day.” The next 45-60 days will prove critical for the e-bike pioneer as it works to secure a buyer who can preserve the brand that helped revolutionize electric transportation accessibility in North America—potentially writing either a comeback story for the ages or the final chapter of a once-promising industry leader whose rapid expansion ultimately proved unsustainable.
