Cycling kit brand Prendas Ciclismo and Shutt Velo Rapide are looking for more than £75,000 in crowdfunding, as the manufacturer seeks to improve its financing.
The company behind the two brands, Cycling Brands, has launched the crowdfunding campaign through Seedrs, in an attempt to grow both Prendas and Shutt. Potential investors might have their interest piqued by the fact that buying shares - as little as £10 worth - nets the investor 20% off for life.
Justin Belcher, the managing director of Cycling Brands, explained to Cycling Weekly that crowdfunding was the right move so they can get "money through the door", and also gives the company new "brand ambassadors".
"We thought crowdfunding was the perfect thing to do, because firstly it gets money through the door, so we can start rebuilding the inventory of the brand," Belcher said.
"Because at the moment we have a big selection of retro jerseys, but we've only got a couple in each size on the shelf. We're almost manufacturing to order. But also, with a crowdfund, if we get 500 investors, we get 500 of the best brand ambassadors you can get. They will be amazing people to be brand ambassadors. We just need financing.
"We're 90% funded, but only to a fairly modest target," he continued. "We'd like to raise a lot more than £75,000, but first we have to hit our target, because otherwise we don't get anything.
"The main investor perk is that you get 20% off for life, and you can invest for a tenner so you basically get a return on your investment straight away."
Prendas faced going out of business during the pandemic, before it was saved by Cycling Brands. Belcher attributed the company's troubles to Brexit.
"In the middle of 2021, we saw that Andy Storey had decided to wind Prendas down," he explained. "It had been screwed by Brexit, because 75% of its customers were in Europe. The company was in serious difficulty because of that."
The problem Cycling Brands and Prendas face now is different to most of the cycling industry - it is not oversupply, but undersupply.
"At that point he [Storey] had sold most of the inventory, so he basically had a warehouse full of caps." Belcher said. "We bought the website and the mailing list, and we relaunched it. We are trying to get Prendas back to where it was. We've got the opposite problem to everyone else in the cycling industry, in that everyone is suffering with over supply, and we've got a massive mailing list of 60,000 customers, but we don't have enough stuff to sell to them.
"We don't have the cashflow to get stock in. I'm getting calls from distributors and manufacturers offering to sell us stuff, incredible opportunities, but we can't take advantage of it because we don't have the finances to do it."
Hence the crowdfunding, which the company has explained in a blog on its site. In a year where other kit companies like Presca and Milltag have disappeared, and Wiggle went into administration, Cycling Brands, Prendas and Shutt are looking to be a good news story.
"There has been a dip in demand across the industry," Belcher said. "We just haven't suffered from the massive overstocking problem that other people have had, because we haven't got there. Our sales are pretty much the same this year, as they were last year. I think everybody can see the light at the end of the tunnel now."
