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The German direct-sale bike brand aims to significantly boost its US presence and digital capabilities with investment from LRMR Ventures, SC Holdings
Canyon, or to give the company its full name, Canyon Bicycles GmbH, has set its sights clearly on significantly expanding its US offering, after both receiving significant investment from two US-based companies.
The equity investment comes from LRMR Ventures, the office of LeBron James and Maverick Carter, and SC Holdings, a US-based private equity firm ‘focussed on market-leading brands’, according to Canyon.
The investors are described as ‘bike enthusiasts’ by Canyon and its founder Roman Arnold, and the goal is growth in the US market.
“While we were not actively looking for new investors, LRMR and the SC team immediately understood our mission to build the world’s most inspiring and innovative bike company,” comments Arnold. “Their passion for what we are building will make them instrumental members of our team.”
Roman Arnold, founder of Canyon Bicycles
Maverick Carter of LRMR Ventures comments that “as an avid cyclist and storyteller, I’m excited about partnering with Canyon. The quality of the products, the power of the Canyon brand, and the unique distribution model create a lot of compelling opportunities we want to be a part of.”
SC Holdings founder/Managing Partner Jason Stein added: “Canyon has been a leader in cycling and a pioneer in direct-to-consumer e-commerce for over 20 years. From professionals on tour to everyday riders on streets and trails around the world, Canyon’s impact on sports and culture is seen everywhere. We are honored to partner with Canyon, GBL and LRMR, and excited to help capture the growth opportunity in the US.”
Expanding US facilities would require significant financial capital
Canyon has also appointed a new board member in the form of Robert Kyncl, with the goal of ‘strengthening its digital capabilities’.
Kyncl has been Chief Business Officer at YouTube and Vice President of Content at Netflix, so he’s clearly got the business credentials, plus a wealth of experience and contacts outside of cycling. If the goal is to make cycling more mainstream, then he seems like a good person to have on board.
LeBron James, Maverick Carter and LRMR Holdings
LeBron James talk to Maverick Carter (in the hat)
These two individuals surely need no introduction. LeBron James is a basketball player for the Los Angeles Lakers, and considered by many to be one of the greatest players of all time. And yes, he’s also into mountain biking – though at 6’8 off-the-peg bikes aren’t an option. MBR showcased his custom DirtySixer hardtail with 36in (yes, you read that correctly) wheels.
Maverick Carter is a long-time friend and business manager of James, and a sports marketing business man. They formed LRMR Ventures together, which manages a wide portfolio of business ventures around the world, including SpringHill Entertainment, a media company that has produced a number of TV programmes and shows, and was behind the recent SpaceJam reboot that starred James.
What does this mean for Canyon, and for cycling?
First off, it means that these companies see investing in cycling as a good business investment, and likely to grow. And it means that Canyon is also a good prospect, particularly for the US market.
Canyon are looking to significantly expand its US operations
While Canyon does have a presence in the UK, the scale and range of what it can offer is limited. To replicate in the US what it has in Europe, if that’s the goal, would require the construction of a physical manufacturing facility on at least par with the facility it operates out of in Koblenz, Germany. And to build something like that takes a lot of cash.
According to the Financial Times, the investment is to the tune of €30 million, bringing the value of the Canyon brand up to €750 million.
The expertise of the companies and individuals involved also suggests a focus on expanding the reach and awareness of Canyon and its athletes, with its focus on both top-level athletes and grass-roots development.
SC Holdings, who have brands such as Supergoop premium SPF skincare, SpringHill Company (another James/Carter company), and StatusPRO; a sports technology and gaming company that uses augmented reality, plus a number of others.
With digital expertise across these brands, it’s not surprising that another focus will be on refining the online shopping experience for customers, something that’s obviously important for a direct-sales bike brand.
And it’s likely that we’re also going to see more creative content featuring Canyon athletes, given the involvement of Kyncl, and the media expertise of LRMR Ventures.