The founders of music streaming service SoundCloud, Eric Quidenus-Wahlforss and Alexander Ljung, have launched a new electric bike subscription start-up called "Dance" with their friend Christian Springub.
The Berlin-based founders are the latest entrepreneurs to try and capitalize on trendy e-bikes, which have soared in popularity during the coronavirus pandemic as city dwellers look for an alternative to public transport.
Instead of selling e-bikes outright like Belgian firm Cowboy and Dutch firm VanMoof, Dance wants to create a community of subscribers around the world. With e-bikes often selling for well over $2000, the SoundCloud founders believe that people will be more inclined to pay a monthly subscription fee via an app than to buy an e-bike outright.
For €59 ($68) a month, Dance customers get an "urban" e-bike that can reach speeds of 15mph (25kph) and free repairs. If the bike is lost or stolen, Dance will replace it "immediately" for free. The e-bikes are manufactured in mainland China and Taiwan.
Dance will start by rolling out around 200 e-bikes in Berlin on an invite-only basis over the next couple of weeks, Dance CEO Quidenus-Wahlforss told CNBC.
"Buying and owning an e-bike is a hassle," he said. "That is why we set out to create a frictionless e-bike subscription service with no upfront costs and all-inclusive services. Dance is the perfect solution for those who are looking for a healthy, environmentally friendly, time-saving and joyful form of mobility."
The company has been backed with an undisclosed amount of funding by venture capital firm BlueYard, as well as individuals like: Ilkka Paananen, founder and CEO of mobile gaming firm Supercell; Neil Parikh founder and chief strategy officer of mattress retailer Casper; and Bjarke Ingels, the founder and chief executive of BIG Architects.
Ljung, who is Dance's chairman, pointed out that music was one of the first industries to witness a shift from ownership to subscription. "At SoundCloud we helped usher in this transformation and established the world's largest and most passionate music community," he said. "Now we want to transfer this experience to the mobility space and start a movement that will ultimately make our cities more livable."
Beyond the subscription model, SoundCloud and Dance have little else in common.
The music-streaming service, which allows people to upload, promote and share audio, has had a bumpy ride over the last few years.
Founded in 2007, SoundCloud became one of Europe's best-known start-ups. However, the company has always faced stiff competition from Apple and Spotify. In July 2017, SoundCloud was on the brink of extinction, but it managed to raise $170 million from investors the following month to help it stay afloat.
In February, shortly before the pandemic hit hard in Europe, SoundCloud announced it had raised an additional $75 million from satellite radio giant Sirius. Ljung will stay on as SoundCloud's chairman.