Pedalling faster and smarter towards international success
Enviolo’s impressive growth has been turbocharged by a recent injection of private equity capital with management staying with the business to power it further. CEO David Hancock explains how enviolo will be shifting ratios as they race ahead.
Can you tell us a bit about enviolo’s background?
Our company makes stepless (gearless) shifting hubs and bicycle transmissions and has European roots, but is truly international. We launched within a VC-backed licensing tech company and we are now based in Amsterdam, have a service centre in Zwolle, a US Technical Excellence Center in Texas and clients spanning multiple geographies. The name enviolo stems from the root French word for bicycle (vélo) with the last three letters representing a cyclist’s upright body between two wheels.
I became Executive Vice President of the parent’s cycling division which later became the main part of the business. In 2018 the parent reorganised, with the cycling division rebranding to enviolo and becoming independent.
Ultimately it is an incredible opportunity to take the most meaningful pieces of a tech business and use them in a very specific application. Our parent had 15 years of investment in IP and tech, giving us a big tech and competitive advantage over other start-ups. We took some of the best talent when the parent restructured, including several experienced engineers working on the tech and 200 of the parent’s 800 patents. Our team is on an adventure to create urban communities focused on sustainable, healthy, socially-responsible lifestyles.
What are you most proud of in enviolo’s journey?
The improbable nature of the story has created a very engaged team. enviolo’s independence from its parent in 2018 generated a camaraderie as people rallied round the business together, having seen the parent head in one direction for 15 years before enviolo emerged, pivoted, and was then sold for $250m just three years later. It’s a real global success and based in Amsterdam. To have been an underdog that ultimately succeeded creates a phenomenal mentality and really boosts morale. This team chemistry and enviolo’s resultant resourcefulness and agility are what I’m most proud of, and being part of it has truly been the best time of my professional life. I’m very excited to join this team on the journey with Inflexion.
Why did you choose private equity for the next stage of enviolo’s growth?
Inflexion approached us proactively and we engaged in very productive discussions over several months. This relationship-building gave us comfort that Inflexion wanted our organisational identity, wanted our story, and wanted us relatively unchanged as a company. We are not a platform or roll-up but rather a company Inflexion had seen grow and succeed, and Inflexion want to help us to grow and succeed further. Their geographic footprint is also appealing, as a European firm with an Amsterdam office providing proximity to us. Inflexion’s offices in India and China are also convenient as we do our manufacturing there.
The CEO and senior management rolled a majority of their proceeds into the future of enviolo, closely aligning management to the investors. Inflexion wanted enviolo because management is so invested, and management wanted Inflexion because our identity would stay the same. It’s a real complement to our strategy and team, and a real partnership.
How have the first 100 days been?
100 days in and both sides are very pleased with the decision and equally or even more excited about the future. The Inflexion board members have always been very authentic and both sides are engaged in a lot of active listening. I think that’s a result of them being close by geographically and being genuinely interested in our industry and organisation. The fresh focus and attention are exciting.
What are enviolo’s plans for growth?
Inflexion and management are fully aligned on growing a great organisation with four specific goals:
- Build on the core business. We have great momentum and will build on this; even with our fast growth, we are still only single-digit market share in our main segments. We can and will grow much further. We’re not a software business so it’s not a network effect but rather about building more systems and getting them to more people. With Inflexion accelerating investment into product development, we’ll enhance our IP-rich portfolio to develop and launch new products for broader customer segments and build a more robust organisation.
- Increase customer confidence. This is the last point on getting enviolo’s solutions to more people and that requires changing perceptions in the market. The backing of a strong backer like Inflexion helps give credibility to enviolo – our organisation and brand, while Inflexion’s global presence will help us to build existing relationship and target new ones in Europe, North America and Asia.
- Increasing supply efficiency and capacity. This is something everyone is aiming for now, and we need scale and capacity to grow. Vendor confidence is also as important as customer confidence and again, Inflexion’s backing is very helpful here.
- Building organisational resilience. We are a lean team, but to reach our potential we need to build out our structure and Inflexion is supporting us here to better enable us to scale.
None of these growth pillars are radical – we’re just doing what we have been doing these last few years, but doing them better. That requires wisdom, experience and good problem solving. We (management) could have just sold our stake in the company and been very comfortable. But we believe so firmly in the business, and this industry, that we all wanted to keep going. We have agreed to press forward together, to keep going – faster, stronger, and better.
We now have a backer with resources and great engagement. The Inflexion investment has validated enviolo (our organisation and model) rather than changed it.