Dat Bike, a startup brainchild of Nguyen Ba Canh Son, a former Silicon Valley developer, got a shot in its arm in 2018 by raising $2.6 million in seed funding from a group of investors led by Singapore venture capital firm Jungle Ventures.
Jungle Ventures rarely invests in premature projects like Dat Bike, so the decision was described as “exceptional.” This is true, considering that Son and his Dat Bike were firmly rejected until then.
“You should never dive into electric bike making,” an investor told Son bluntly a few years ago.
“You are gifted, but you sell what no one wants. This is not the right time for electric bikes in the market. I will consider an investment if you come up with another project,” the investor added.
Son also believed then that the market was not ready for him. He saw that the way brands advertised electric bikes usually disappointed the customers as the real life performance failed to match the marketing hype.
Electric bikes these days can only cover just half the range and power of their petrol-fueled rivals. Currently, the electric bike owners are mostly young students, who are not allowed to ride powerful motorcycles.
The rejections did not deter Son, who constantly kept in mind the motivation that made him take the plunge. When Son was a developer in Silicon Valley, he became bored with the job at a property management agency. The workload was heavy but meaningless and the handsome remuneration did not stop him from quitting his job and looking for a new path that would deliver value and convenience to people.
Around this time, the production of electric vehicles was an emerging, attractive business in the U.S. However, startups often failed due because they were premature for the market. Son believed he had a better chance making electric bikes for Vietnam.
He returned to Vietnam in 2018 with all his money and loans, pouring everything into his dream project, Dat Bike.
Son wanted his bikes to have the ability to replace petrol-fueled ones that were polluting the local air. He wanted that buyers not have to compromise neither power nor convenience when using the greener alternatives.
Starting with roughly $1 million, Son invested in a factory and then opened a flagship store in HCMC. The number of buyers was relatively modest at a few hundred, a month, but since November 2020, things have been looking up with revenues rising 35 percent a month since November 2020.
Dat Bike has been recognized by the Ministry of Transport as Vietnam’s first domestic electric bike manufacturer that sources parts locally. Standing out from other competitors was a factor that influenced Jungle Ventures to invest in Dat Bike.
Amit Anand, founding partner with Jungle Ventures, said it was noteworthy that public awareness of the need to preserve and protect the natural environment has been rising.
Consumers are more and more likely to switch to greener products, but they are not ready to compromise the convenience of regular vehicles.
“It is just something most brands don’t pursue right now. They mostly import finished units or assemble parts. This lack of core development and control results in the market lagging behind in power and design, making it difficult for people to make the switch. Dat Bike offers the customer a better option,” Anand said.
A Dat Bike representative affirmed Anand’s statement, saying they believe that they are a game changer in the market. Dat Bike is focused on high-end quality, which is expected to help the startup convince bike buyers to switch to greener alternatives.
Dat Bike claims that its first generation products rival petrol bikes in power and range. Its 5,000W motor helps accelerate from 0-50 km/h in just three seconds, three times more powerful than other electric bikes in the market. One full charge can help maintain the power enough for 100km, roughly double the capacity of other competitors.
Dat Bike currently uses the lithium-ion batteries, the same one used by the latest Tesla models. The battery has a life expectancy of 10 years.
Lithium-ion is one of the safest battery chemistries available and can be dumped at recycling yards.
The startup claims that its batteries get fully charged in roughly three hours, 100 percent faster than other contenders in the Vietnam market. It aims to shorten the charging time to just one hour in near future.
“I heard doubts expressed when people first saw our latest model, but I’m not worried at all,” said Son. “The design is not one size fits all. And this is the just the first step of many to come.”
He said the design can be easily tailored to a variety of customer tastes. Developing new designs is much less challenging than ensuring the electric engines will rival or even surpass that of petrol engines, which is Dat Bike’s focus right now.
Since its entry into the market, Dat Bike’s supply has fallen short of demand due to limited budget and small production capacity. The investment from Jungle Ventures is slated to help the startup complete orders from Vietnam and other countries in the region.
Dat Bike plans to expand by building its supply chain in Southeast Asia, where the vast majority of households own two-wheeled vehicles. Trade within Southeast Asia is tariff-free, compared to huge taxes for imported bikes in Thailand, Indonesia, Malaysia and the Philippines. The tariff scheme grants local companies huge advantages compared to outsiders and that may help Vietnam’s electric bike makers become a regional powerhouse.
China, India and Southeast Asia are the three largest bike markets in the world. While the first two have been almost occupied by domestic manufacturers, Dat Bike is probably the first local maker in the region. The startup’s pioneering position is another main factor that has influenced Jungle Ventures.
“Dat Bike is exceptional among our projects, one of the few that we decided to invest in at a very early stage. We want to back Son and help him make his dream to be the ‘Elon Musk’ of bike industry come true,” said Anand.