Online cycling marketplace BikeExchange has acquired US-based bike delivery service Kitzuma for $3.375 million (£2.5 million).
Australian firm BikeExchange said it made the acquisition to help drive its e-commerce-first strategy, with the aim of improving both seller and customer experience.
Kitzuma specialises in delivering fully-built bikes tailored to suit manufacturers, retailers, individuals, and teams, and also offers additional services like logistical support for demo events.
BikeExchange’s global CEO, Mark Watkin, said: “Kitzuma’s purpose-built logistics platform, which allows bikes to be transported box-free and fully-built, will eliminate a significant barrier for many customers purchasing a bike online – having to unpack and assemble it. Kitzuma will be a compelling white-glove service for retailers and brands using the BikeExchange marketplace and broader.
“From the early meetings with the Kitzuma team there was clear chemistry and alignment on the synergies and opportunities for the collective business. The Kitzuma acquisition is transformative for BikeExchange and will be a significant driver for our e-Commerce first strategy and enhancing both the seller and customer journeys for buying and selling bikes. In a short space of time, Kitzuma is now delivering across the entire US and we aim to replicate the business in Australia and Europe in time.”
BikeExchange said the majority of the cash for the Kitzuma acquisition is equity funded, through the deferred shares at an issue price of $0.157, totalling 19.93 million shares, worth $2.25 million. There is also a cash component of $1.113 million paid out of existing cash reserves.
The company said the acquisition will add over $1 million in revenue to the group in the second half of FY22.
Kitzuma CEO and Founder Taylor Essick said: “We are clearly delighted with the acquisition announcement. Since the initial meetings with Mark and the team at BikeExchange we could see the significant opportunity and potential to create a strong end to end process for buying, selling and shipping bikes.
“The Kitzuma service is already providing a unique service with the ‘Ready to Ride’ bike deliveries. We want to see this model grow and expand in North America and around the world. The breadth of choice across retailers and brands and the regional footprint of BikeExchange is an excellent foundation to build from with the Kitzuma model. Chris, Tony and myself are excited for the transition and growth to come.”