Rad Power Bikes filed for Chapter 11 bankruptcy protection even as the Seattle-based company said it’s working toward a sale to keep the popular electric bike brand alive.
In a bankruptcy petition, filed Monday in federal court in Spokane, the company reported total liabilities of nearly $73 million, more than double its assets of $32 million. The filing also revealed a steady drop in gross revenue — from $129.8 million in 2023 to $103.8 million in 2024, and $63.3 million so far this year.
The filing comes three weeks after the Consumer Product Safety Commission (CPSC) issued a warning to consumers to stop using some of the Seattle-based company’s bikes because of danger posed by their lithium-ion batteries.
It follows the revelation, in early November, that the once hard-charging startup was fighting for survival as it faced “significant financial challenges.”
A Rad spokesperson said in a statement provided to GeekWire on Tuesday that the company was navigating an extraordinary period of challenge and change.
“As we work to secure a sustainable future for the Rad brand, Rad has filed for Chapter 11 protection as part of a process to complete a sale of the company within the next 45–60 days,” the statement said. “This step allows us to keep operating in the ordinary course of business while we pursue the best possible outcome for the people who rely on Rad every day.”
Rad said its goal is to keep the company intact and preserve relationships it has built with riders, vendors, suppliers, and partners.
RELATED: The rise and fall of Rad Power Bikes: From breakout success to the brink of shutdown
Rad previously filed notice with the Washington state Employment Security Department in which it said the company could shut down as early as January, and that 64 jobs would be impacted.
The filing shows that the company remains primarily controlled by its founder, Mike Radenbaugh, who holds the largest individual stake, more than 41%.
Institutional investors hold significant minority positions, including VCVC V LLC (6.55%), an investment vehicle associated with Cercano Management, and Durable Capital Master Fund LP (5.79%). Co-founder Ty Collins retains a 4.23% stake.
The company’s largest unsecured debts include nearly $8.4 million owed to U.S. Customs and Border Protection for tariffs, and more than $8 million to overseas manufacturers. Insurance companies and individuals seeking to recover payouts related to Rad bikes are owed about $4.3 million, and two people are each owed $1 million for damages, likely from lawsuits.
Rad was conceived in 2007 by Radenbaugh and Collins, who met as students at Humboldt State University in Northern California and built their first e-bike together. After years of doing custom conversions of traditional bikes to electric, they launched their company as a direct-to-consumer brand in 2015.
Rad saw big demand amid the pandemic as more people bought e-bikes. Its sales and workforce surged and it raised more than $300 million from investors in 2021. The company was valued at $1.65 billion that year, according to PitchBook, making it one of a handful of “unicorn” startups in the Seattle region at the time.
Rad operates out of a headquarters and flagship retail location on NW 52nd Street in Seattle’s Ballard neighborhood.
The company is currently led by CEO Kathi Lentzsch, who previously ran Bartell Drugs as CEO before the company sold to Rite-Aid in 2020. She also led companies including Gump’s and Elephant Pharmacy, and held exec roles at Enesco, Pottery Barn and World Market.
Lentzsch replaced Phil Molyneux, the former Sony president who stepped down earlier this year after leading Rad for more than two years.
The CPSC’s Nov. 24 product safety warning, which listed a variety of Rad bikes and battery models, urged consumers to immediately remove and dispose of hazardous batteries that “can unexpectedly ignite and explode, posing a fire hazard to consumers, especially when the battery or the harness has been exposed to water and debris.”
Rad disputed the CPSC’s findings, saying at the time that the company “firmly stands behind our batteries and our reputation as leaders in the e-bike industry, and strongly disagrees with the CPSC’s characterization of certain Rad batteries as defective or unsafe.”
Rad said the significant cost of CPSC’s all-or-nothing recall demand would force Rad to shut down immediately with no way to support its riders or employees.
On Tuesday, Rad said it was “not giving up” and that it was “focused on doing everything we can to strengthen the future of the Rad brand.”
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