Smart navigation for bicycles, made simple. Plus a community to improve cycling for everyone
- London, United Kingdom
Categories: Automotive & Transport Mixed Digital/Non-Digital B2C
- Social Media
- Investment sought:
- Equity offered:
BeeLine is a beautifully designed, affordable piece of connected navigation hardware for urban cyclists, making it easier, safer and more enjoyable to get around by bicycle.
In little over a year the BeeLine team have built prototypes, proved traction with over 4,000 preorders in >40 countries, received international press coverage and are now in the final stages of setting up mass manufacture in China. The next step is to scale up fast once in full production.
Any urban cyclist will recognise the current problems with navigation. Stopping to check Google maps, or worse riding with a phone in your hand is at best frustrating, at worst dangerous. Compounding this, the routes offered tend to be optimised for cars, using major, "fast" roads which are often in fact the least pleasant and most dangerous for cyclists.
BeeLine solves these through stripped back navigation that elegantly leverages the user's smartphone, for a low cost and a wonderfully intuitive navigation experience.
BeeLine intends to revolutionise navigation by making it accessible to the mass market and by making it much more enjoyable. In the long term we aim to do this for more activities but our immediate focus is on cycling, where ultimately we want to enable more people to take up cycling, with BeeLine as their guide.
MASS MARKET SOLUTION: Through offering the product at a fraction of the cost of traditional SatNav, we hope to disrupt the market and make navigation devices accessible to all. Not the preserve of serious enthusiasts but something you would expect to see on every bicycle, just like lights and locks.
FUN, ENGAGING & SAFE: Traditionally, navigation is extremely prescriptive, leaving the user a passenger to instructions. BeeLine uses what we call "fuzzy navigation", giving a general direction to head in and the distance to get there, leaving the exact route decision making down to the user. It allows the user to choose which turns to take, allowing them to avoid busy, major roads, sticking to the pleasant, quiet back roads which can often be quicker by bike anyway.
We believe this is much more in tune with our instinctive way of navigating and makes riding more fun and engaging. We've heard fantastic feedback to confirm this, both from people who've actually tested it and people who've seen the concept and can't wait to use it. Because BeeLine requires just the occasional glance rather than extended focus on instructions, it allows the rider to keep their eyes on the road. Combined with the freedom to choose quieter streets, we believe this means BeeLine can keep cyclists much safer.
COMMUNITY & SHARING: behind the hardware lies software. On the surface this drives the app and will allow riders to track, share, and play with each other. In the background we will learn from how people ride and the feedback they share, allowing us to provide better routing in future and to help city planners. We believe that together we can make cycling better for everyone!
Substantial accomplishments to date
- Ran a hugely successful KICKSTARTER campaign in late 2015, hitting our target of £60k in 3 days, going on to raise £150k and sell 3,500 BeeLine devices. This puts BeeLine in the top 0.2% of Kickstarter projects ever (by funds raised).
- Received INTERNATIONAL PRESS COVERAGE, including mainstream (e.g The Guardian), cycling (e.g. Cycling Weekly), Tech (e.g. Engadget) and Design (e.g. Wired). Wired named BeeLine as one of their "Top 20 most cleverly designed objects of 2015".
- Built a great TEAM, with backgrounds in big business, startups, design, engineering, app development and manufacturing.
- Stayed on course for MANUFACTURE in August this year, delivering on our Kickstarter ambition with a proven manufacturing partner in China.
- Accepted into SEEDCAMP and HARDWARE CLUB, arguably one of the world's top early stage funds and the world's top hardware startup community respectively.
- Established RETAIL relationships in key mainstream online and cycling
There are 3 strands to BeeLine's monetisation strategy:
1) DEVICE SALES: we will sell our hardware devices directly through our own website, through retailers and via distributors to achieve maximum reach. Our expected RRP of the first product is £60 with a target gross margin of >60% to accommodate retail. We have already begun direct marketing tests for preorders and are achieving a CAC of below £10 which will allow us to scale up fast. In future we will develop further hardware products and accessories to create a full range.
2) PREMIUM APP FEATURES: v1 of the app will have basic navigation features and will be completely free. After launch we will develop richer feature sets (while maintaining the BeeLine ethos of simplicity), unlocking functionality of the app and device. Many of these will be offered for free, to engage users, build a strong community and develop the network effect that will defend us against competitors. Others will be paid, premium features, providing a recurring revenue stream to the business from those users who choose to opt in.
3) ROUTING DATA; as we build a large community of users we will learn from the way they ride and the feedback they provide. This will allow us to better understand cities from a cyclist's point of view and to build what we hope will be the world's best cycle routing resource. In the long term we'll be able to monetise this by licensing it to other routing providers, to businesses that use bicycles for delivery in the growing on-demand economy and to cities looking to improve cycling infrastructure. In time we expect this data to be a large part of our appeal and valuation driver to potential acquirers.
Use of proceeds
The funds raised through Seedrs will be used in 3 key areas:
1) TEAM: we currently have a great team of mainly part timers and freelancers. These funds will allow us to bring top talent in house and really turbocharge our growth. This will mainly be technical talent to build new product features and manage data, but will also include marketing and community roles.
2) MARKETING, BRAND BUILDING: to drive demand. We're already running small tests on paid marketing which we will optimise and expand on, as well as content marketing and more innovative ways to reach our target market. (See 'Marketing Strategy'.
3) INVENTORY FINANCING: while device sales are profitable, manufacturing lead times and retailer payment terms mean capital is needed to maintain positive cash flow. The funds raised will allow us to order the inventory we need to scale manufacture quickly as we build demand.
Our initial target market is anyone who rides a bike to get around in a city, or would like to. (Later we will target all cyclists and expand into other activities).
Within this group of urban cyclists, our core audience are those for whom cycling is a practical mode of transport and part of everyday life, rather than purely a sport or hobby. These are the people who are most often in need of navigation and are currently vastly underserved. In our experience they tend not to ride extremely expensive bikes, and while the amount they spend on cycling may add up over time, we believe they are less likely to spend vast sums on very high end individual items such as performance cycling computers.
This is the segment of cycling that we believe is growing fastest. This can be illustrated by the rise in city cycle hire schemes around the world, the growing importance of e-bikes which made up 30% of over 130M global bike sales last year and the efforts being made by cities around the world to encourage and accommodate cyclists as the world urbanises. For example, London has a £1B plan to improve it's provision for cyclists.
Initially, while BeeLine will be available to buy anywhere in the world, we will concentrate our marketing efforts on London to build a strong initial community and to focus our data collection to quickly prove how we can use it to create much better routing and guidance. Beyond this we will push into more cities across Europe, the US and Asia, prioritising based on the size of the cycling markets in each.
As we develop our products we will expand beyond urban cycling into all kinds of cycling, and from there into more activities. We believe that BeeLine navigation will be applicable to a multitude of activities outside of driving, but we don't want to dilute our focus on cycling for now.
Characteristics of target market
In London nearly 10% of people (~1M people) ride a bike at least once a week. 2% of all journey are made by bike. In the UK we spend £3B/year on cycling, of which around half is on accessories. We estimate the global cycling accessory market to be $36B p.a.
Cyclists tend to spend a large amount on accessories and upgrades to their bikes. Be these new wheels/saddles, on trend products such as the latest bike lights or, at the top end, devices such as Garmin cycle computers. We have found that cyclists are competitive and enjoy gathering data on their own performance, e.g. see the growth in cycling tracking apps such as Strava.
Cycling is growing at an enormous rate and is being pushed hard by government (London has committed £1B to cycling improvements, e.g. cycle super highways and hire schemes).
In our opinion this growth is driving a shift towards cycling being a lifestyle choice, not a sport, with more focus on design and affordability.
To reach the market, we will use various channels and marketing approaches to sell BeeLine hardware products:
1) Direct sales will be our first channel, selling through our own website, and through the app (free to download and trial BeeLine). This gives us maximum margin to begin with and allows us to hold a close relationship with the customer and understand our early adopters. This has already begun with pre-orders being driven through CPC social media marketing, achieving a CAC of <£10.
2) Retail (traditional and online) will be our second channel, building direct relationships with retailers, this will give us wider reach and a physical presence. We are hoping to test this directly after launch with a trial in Evans' Cycles stores and will look to roll out across more retailers in early 2017.
3) Distributors and sales reps (US) will come later when we have established the brand, are confident in very large scale manufacturing and are ready to go to full mainstream. Distributors will eat into the margin but will help us reach an enormous global retail network.
1) Paid online marketing: Social and Google PPC and retargeting. Early tests are showing a CAC of <£10.
2) Content marketing: Blogs, videos and in app guides.
3) Referrals: Both financial incentives (discount codes) and through building software features that make BeeLine fun to use with others, encouraging "organic" referrals. The standalone BeeLine app combined with in app hardware purchase option will be a key enabler of this.
4) PR and influencers: Particularly for online reviews.
5) Offline marketing, events and creative guerrilla marketing.
As well as BeeLine device sales, we will push for:
- Standalone app downloads: We will aim to convert these to hardware sales but even app only users (including smartwatch) will contribute the the community and data.
- Partnerships: Hardware collaborations with city cycle hire schemes, bike manufacturers, sportswear companies etc.
Our current competitors are:
- dedicated SatNav devices e.g. Garmin (often £200+).
- phone based navigation apps e.g. Google maps (free + mount cost).
- other connected bike navigation startups. e.g. Hammerhead (£70+).
BeeLine distinguishes itself against these competitors on several aspects:
- Price: at an RRP of £60 BeeLine is the more affordable than any other dedicated hardware. While phone based navigation apps are free, they require mounting a ~£500 device vulnerable to damage and theft.
- Type of navigation: BeeLine's fuzzy navigation is completely different to standard turn-by-turn navigation so appeals to a different audience. The feedback we've had so far suggests there is a large market for this more liberal, fun and engaging type of guidance.
- Rich features updates: we will develop and release engaging new features through the app and bluetooth updates to enhance the BeeLine experience beyond navigation.
- Simplicity: everything about BeeLine has been designed with simplicity and ease of use in mind. From the simple, intuitive user interface of the device and the app to the long battery life and clean, elegant attachment solution
- Design and brand: the BeeLine device has been beautifully designed specifically for the target market of urban cyclists rather than competitive sports cyclists. This is also reflected in our brand.
- Battery life: BeeLine is designed to last for around 30 hours of standard use, far longer than any competitor solution.
Going forward, there are 3 layers to BeeLine's defensibility:
1) Patents: we have patents pending on the hardware and navigation method with international priority.
2) Software: the network effect of our software means that if people replicate the hardware, there will still be a compelling reason to be a BeeLine user.
3) Data: as we learn from our community, we will use this to enhance the products. When we can do this it will become very difficult for others to replicate what we can offer.