BikeExchange (ASX:BEX) investors are hoping for a smooth ride as the online cycling marketplace makes its debut on the ASX today in the 11th float of the new year.

The 14-year-old company is listing at 11am after an IPO that raised $20 million at 26c a share.

Founded in 2007 by childhood friends Sam Salter and Jason Wyatt in Jason’s parent’s lounge in Melbourne, BikeExchange has grown into what it describes itself as the world’s largest global cycling marketplace, operating in eight countries out of four hubs for Australia and New Zealand, North America, Europe and Latin America.

“We’ve got a good, great foundation around the world, to really build off,” said chief executive Mark Watkin.

In FY2020 the company had $12.3 million in bike sales – $6.2 million in the fourth quarter.

The company has grown without large amounts of capital being invested to date, spending just $15 million since 2014 on its expansion into international markets.

BikeExchange generates most of its revenue through a subscription model, with retailers and brands paying between $100 to $5,000 a month to reach the roughly 39.2 million consumers using the site.

Revenue down in FY2020

Like many companies going public, BikeExchange is not profitable, losing $2.9 million in FY20.

Also, its revenue dipped 6.8 per cent to $3.67 million in the 12 months to June 30, 2020, compared to the year previous, which Watkin attributed to flushing out some of the “more promotional accounts” that were on the platform while forging better brand relationships.

“Sort of getting a database of business customers right, getting that foundation right,” he said.

The company will release its first-half revenue figures on Tuesday morning, non-executive chairman Gregg Taylor said, adding that they’ll be very strong.

“There’s a bit of restructuring in FY20, but the core business of the business are accelerating very, very fast,” he said.

The company saw a huge spike in traffic in the early days of the pandemic, which has increased the popularity of both e-commerce and cycling.

“We see these themes going for years to come, not just short term,” Taylor said.

The company’s prospectus forecasts that the global bicycle market will grow by 4.1 per cent annually to $US80 billion ($104 billion) in 2026.

The e-bike market is growing even faster, at a 9.1 per cent rate.

While e-bikes make up just three per cent of new bike sales in Australia, they’re eight per cent in Europe and up to 20 per cent in some markets there.

A unique opportunity

Consumers are waking up to the health and environmental benefits of cycling and governments around the world are trying to make cities more cycle-friendly, BikeExchange says.

Watkin and Taylor said they are excited about Tuesday’s listing and the prospects for the company.

“It’s very unique opportunity – the global cycling industry’s an $85 billion industry – and a lot of value has been assigned to companies in verticals that can secure first-mover advantage,” Taylor told Stockhead.

“And BikeExchange is extremely well placed to secure that first-mover advantage at the global level. And that’s a very unique investment proposition, from an Australian listed perspective.

“There’s almost without nothing in the Australian market to invest in something of that scale and opportunity, and that’s what’s resonated.”