The company that supplies high-end exercise bikes to Team GB athletes and other elite sports men and women, is scrambling to find new backers as part of a desperate bid to avert a serious cash crunch.
The owners of Wattbike, producer of the world’s first ever indoor smart bike, are preparing it for sale in the face of a possible funding shortfall.
The company has been surviving on short-term financing ever since the post-Covid cycling boom ground to a halt. Turnover at Wattbike slumped from £32.2m in 2021 to £20.5m in 2022, then £13.7m last year. Losses have totalled more than £16m over the last two years and the company has repeatedly been propped up with emergency loans, accounts filed at Companies House reveal.
Shareholders stepped in with a £1.1m loan in March 2023, then a further £500,000 a year later. Management also persuaded the main lender to push out the repayment date on a £3.4m lending facility for a further 12 months until the end of next month.
With the deadline looming, the company is understood to be in talks about another stay of execution. Under the terms of the agreement, the deadline can be extended in monthly increments until the end of June, subject to certain conditions.
Wattbike’s chief backers are the private equity firm Piper. Piper’s other investments include the upmarket florist Bloom and Wild, fledgling stake restaurant chain Flat Iron, and skin care brand Neom. Piper injected £11.5m into Wattbike in 2022.
Corporate financiers at Ashcombe Advisers have been drafted in to lead the hunt for possible suitors for a business. Wattbike claims its bikes are used by more than 1,000 elite sports team around the globe, including the men and women’s England international football teams, every Six Nations rugby team and over 500 Olympic medallists.
A spokesman for Wattbike said its fortunes had experienced a marked improvement and it was always the company’s intention to “secure long-term funding to support continued growth”.
They added: “The company has seen significant improvements in financial performance over the past year … with sales up more than 35pc year-on-year since September. Our shareholders and lender continue to fully support the business.”
Wattbike makes digitally connected static training bikes that allow people to measure a range of performance indicators from their rides. Like Peloton, it also offers digital training classes that can be accessed after purchasing one of its bikes, which start from £1,795.
Demand for products like this surged during lockdown as people sought out ways to keep fit during lockdowns. However, sales have since slumped to a more normal level, creating significant headaches for businesses. Peloton has seen its share price collapse by more than 90pc from the heights reached in December 2020, forcing it to undertake a painful restructuring.
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