The sale of new and used bicycles boomed in 2020. As this demand returns to normal, a Louisville-based bicycle marketplace raised capital to tap into the overflow of inventory and continue funding its operations.
Bicycle marketplace The Pro’s Closet recently raised $5.5 million, which newly appointed CEO Jonathan Czaja said is a “modest Series C.”
The Pro’s Closet, or TPC, purchases used bikes from consumers and new ones from manufacturers or bike shops. The used bikes it purchases are cleaned, tested, inspected and repaired as needed by in-house mechanics before being sold on TPC’s online marketplace or in its retail store in Louisville.
“There was tremendous demand for bikes during Covid because everyone was eager to get outside,” said Czaja, who was appointed as TPC’s CEO in September. “Some of those tailwinds have diminished and now bike sales are coming back down to normal levels. ... There’s just a tremendous amount of inventory in bike shops right now because a lot of manufacturers manufactured to meet [the] Covid demand but because of supply chain issues, those bikes didn’t actually arrive until after the demand was already gone.”
Last year, TPC sold 10,000 bikes and shipped 65,000 orders, which included accessories and parts. It has customers in all 50 U.S. states and recently completed its first overseas bike sale to someone in Europe. The company typically has 500 bikes in its inventory and sells out of that inventory in 30 days, on average.
Czaja said the company’s revenue has returned to pre-Covid levels but that he expects to grow by at least 40% over the next two years.
“Our inventory position is the healthiest it’s ever been,” he said. “We can be much more selective about the type of inventory we carry than your typical bike shop.”
TPC raised $20 million in equity, according to a Form D with the U.S. Securities and Exchange Commission on Jan. 19. According to the filing, $14.5 million from this round comes as a convertible note that was recently turned into equity. Czaja said this note was raised in November 2022. It, plus accrued interest, was converted to equity as part of the company’s Series C raise.
The remaining $5.5 million in this round comes from TPC’s existing investors, Edison Partners, The Chernin Group and Foundry Group. (Foundry Group announced last week that its current $500 million fund will be its last.)
The Series C round brings TPC’s total capital raised to date to $90.2 million, including a $40 million Series B raised in May 2021.
In addition to funding operations, TPC plans to grow its 76-person team.
“We intend to hire ... but modestly because we’re unclear on when the broader bike market will recover,” Czaja said.
The company operates out of a 137,000-square-foot facility in Louisville and opened a retail store in front of the warehouse in August 2022.
TPC was founded in 2006 by former professional mountain bike racer Nick Martin. The company operated exclusively on eBay until 2017. Martin served as the company’s CEO until 2020; he remains listed as a director, per SEC documents.
