Start-up Fund Joensuu invests in electric bike manufacturer eBike Finland

ebike Finland organised a share issue at the end of 2021. Business Joensuu’s Start Up Fund Joensuu participated in the funding round with EUR 112,500, for which it received 22.5% of the company’s shareholding. Through the issue of shares, the company collected EUR 187,500, plus a loan that is 70% guaranteed by the European Central Bank. A total of more than half a million euros of growth funds will be allocated to starting and running production.

“The electric bicycles market has a lot of potential for growth, as electric bicycling is an upward trend. It is really great that a North Karelian company has noticed the opportunities for growth and started creating industrial production,” says Business Joensuu’s Kari Pulkkinen. “The investment decision was easy to make against this background.”

eBike Finland’s Chair of the Board Jarno Surakka and CEO Marno Miettinen established the company and the NIEKKA brand in October 2020. The company’s first extended financial period ended at the end of December 2021. The founders’ goal is to steadily increase the extent of their operations during the first five years.

“The aim is to increase turnover to EUR 8 million by 2026. This requires steady growth, but it is a realistic goal,” Surakka says. “We are now looking to on-board professionals: people with a start-up background who will make our operations snappier and support the export of the brand to the world.

Custom bikes and improved customer experience

“The bicycle parts are our heel of Achilles,” says Surakka. The delivery and ordering times of parts are very long, and the global shortage of components makes it even worse: as a result, the availability of spare parts is often poor. According to Surakka, the prices of high-quality models start from EUR 2,000. It is unfortunate for the buyer to invest several thousand euros in a bicycle whose maintenance can easily become impossible. The NIEKKA bikes aim for this market opportunity.

“We assemble the bike for the customer with the parts and adjustments they want, the body colour included. Service and parts sales are also part of our concept, unlike many competitors. The aim is to have a good customer experience in which the electric bike does not become useless when it first breaks down and the lifecycle of a valuable product is not excessively fast.

The team’s strong approach to customer experience also convinced the decision-makers of the Start-up Fund Joensuu,” says Kari Pulkkinen.

“eBike Finland is aware of the opportunities offered by the market potential and the aftermarket, and has carefully considered its customer group in order to enter the market with a high-quality product. The management of the company has strong evidence of previous business activities, so their competence did not come as a surprise,” says Pulkkinen.

The target is 2,000 bikes by 2026

NIEKKA has already raised interest around the world, but the founders want to focus on Finland for the time being. Surakka estimates the sales to fall between EUR 350,000 and EUR 500,000 this year. About 5% of this goes to the rest of the EU. In 2024, the company aims to increase its EU exports to 10%, mainly in Central and Southern Europe.

The company’s Patikko electric bikes can already be ordered. During the coming summer, NIEKKA will also make their Kura and Polku models available. According to Surakka, the price of the models will be between EUR 4,000 and EUR 9,000. Surakka believes that people are willing to pay for quality and good customer experience.

“This year we will produce a maximum of one hundred bikes, but by 2026, the goal is to increase production to 2,000 bikes. Not every component can be obtained from a domestic manufacturer, but we aim to utilise as much Finnish and North Karelian expertise and parts as possible.”

Photo: eBike Finland

Further information:

Jarno Surakka, Chair of the Board, eBike Finland
jarno@ebikefinland.com
+358 50 5661706

NIEKKA Bicycles
NIEKKA electric bikes clear obstacles on the road to the joy of cycling. In Outokumpu, we manufacture Finnish electric bicycles that are suitable for different needs and that provide an enjoyable riding experience. We make the ownership and maintenance of electric bicycles carefree with our services that cover the entire life cycle of the bicycle. The joy of cycling is a uniquely liberating experience and, best of all, it is just a ride away.

Start-up Fund Joensuu helps start-up companies to grow, employ people and internationalise. The Fund obtains its capital from the City of Joensuu and private investors. The fund is managed by Joensuun Startup Kehitys Oy, a subsidiary of Business Joensuu. The Fund’s capital is EUR 2.5 million and its typical investment is EUR 50,000 – 200,000. Together with the Business Joensuu’s Business Accelerator and internationalisation services, the Fund supports the domestic and international growth of its target companies. The Fund is an avenue for companies’ second phase funding round. While the Fund is not subject to any field-specific restrictions, its main focus is on companies that specialise in digitalisation, the forest bioeconomy, and materials and innovative technology. Target companies must operate in Joensuu, want to be located in Joensuu or have a connection with the Joensuu region at the level of operative activities.