Ralf Kindermann: “investors eye the bicycle industry”

Ralf Kindermann
“The growing need for working capital is certainly one of the driving forces for many companies to decide on finding a partner to provide them with the necessary capital,” says Ralf Kindermann. Photo: Kindermann Value Creation

MUNICH, Germany – Dominating headlines in the first half of 2021 were reports on acquisitions, company mergers, the entry of investors from outside the industry, as well as IPOs. For Ralf Kindermann, long-term bicycle industry expert in both trade and manufacturing, this rapidly growing interest of investors in e-bikes and bicycles will have a big impact.

Since early 2019, Kindermann has offered his extensive industry knowledge and experience to other companies through his consultancy, Kindermann Value Creation GmbH.

The bicycle industry and the stock market are moving toward each other. Has the stock market discovered the bicycle industry, or has the bicycle industry discovered the stock market?

The bicycle industry has discovered the stock exchange for itself. Established companies, or those founded in the bicycle industry, have become marketable on the stock exchange.

What do you mean by ‘marketable’?

These companies can deliver steady growth with stable earnings. But, for me, marketability in a traditional sense still has to do with good sales and profits.

On the one hand, we hear that banks are still rather critical regarding provisions and loans in the bicycle industry. But, on the other hand, the number of risk and venture capital providers getting involved in companies within the industry is increasing. How do you make sense of that?

In recent years and following the various stages of the Basel regulations, the banks have increasingly withdrawn from financing SMEs, especially in retail, in the traditional sense. Successful companies were therefore forced to look for alternative financing channels. These include minority or majority participation by private equity funds. Banks invest via private equity funds because such funds deliver very good returns – it is profitable, and investments are paid back at a high interest rate. For this reason, not only the banks’ policies have changed, but also the industry’s financing options.

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