The Cowboy Cruiser.
Cowboy, the Belgian electric bike maker, is expecting to hit full-year profitability in 2024 even as some of its market rivals are facing financial hardship.
Adrien Roose, Cowboy’s CEO and co-founder, told CNBC that he expects the company to reach profitability on an EBITDA basis by the end of the second quarter and then sustain this through the third quarter. EBITDA refers to earnings before interest, taxes, depreciation and amortization.
By the third quarter, Cowboy would then have reached profitability on a full-year basis, according to the firm’s boss.
“There is some seasonality in this business,” Roose said in an interview. “Essentially, people like buying a lot of bikes in the summer, and not nearly as much in the winter.”
However, he added, “We have a high degree of confidence that, by 2024, we’ll be EBITDA profitable and cash flow positive on a full-year basis.”
EBITDA is a traditional measure of profitability for many technology companies.
Cowboy is a startup that designs electric bikes. It’s been termed the “Apple of e-bikes” in the past due to its integration of software smarts in its bikes.
Cowboy links its bikes with an app that allows users to lock them when they’re not in use, track their location, predict battery depletion and get weather updates.
Cowboy also serves as the designer of the bikes rather than the manufacturer — it gets other firms to handle the making of its bikes, similar to how Apple relies on contract manufacturers like Foxconn to make its iPhones.
But e-bikes have had a rough time in the market lately.
A shift in supply chain dynamics has led to a situation where e-bike stock levels are now in abundance at many manufacturers but demand has fallen significantly from the pandemic boom.
That’s different to when e-bike firms were scrambling for more units in 2021 when consumers were itching for alternative, sustainable modes of transport and a way to get outside during the Covid lockdowns.
In that period, customers were often faced with huge delays to their orders as companies couldn’t keep up.
“By the time that this traffic jam started normalizing, the world was already shifting to get in quite a different place,” Roose said. “Towards 2022 and 2023, there was an overall slowdown in demand.”
“This created the perfect storm for companies which have massively over-ordered and now are facing demand that is slightly lower than hoped so or expected, and that translated immediately to very high inventory levels, a lack of cash, and a lack of liquidity.”
The e-bike industry has been plagued by recent bankruptcies of major players in the space. In July, Dutch e-bike firm VanMoof filed for protection from creditors. Administrators overseeing the bankruptcy process are exploring a number of options for VanMoof, including a potential asset sale to a third party so it can continue operations.
Revonte, a Finnish e-bike firm, also filed for bankruptcy and said it is selling its intellectual property.
Roose said that his firm is unlike competitors in that it doesn’t manufacture bikes itself and therefore has a slimmer cost line.
With some competing e-bike firms, “their cost base was way too high for their size,” Roose said, adding that VanMoof operated with far more employees than Cowboy despite boasting similar rates of revenue.
Cowboy launched its new Cruiser e-bike with an upright seating position — known as the “Dutch” riding position — earlier this year.
The bike is intended to provide riders with “improved posture and increased visibility on the road,” according to the firm.
But at an “introductory” price of $3,490, Cowboy’s e-bikes don’t come cheap. And on Aug. 1, the company raised prices of its belt-driven “Performance” configuration bikes to $3,790 from $3,490.
E-bike firms have had to get more aggressive on pricing as the tide of venture capital that buoyed the industry in 2020 and 2021 has seeped out of the market with interest rates climbing higher.
Still, though, Roose said he’s keeping his eye squarely focused on the long-term potential of e-bikes — driving sustainability with less cars on the street — rather than the short-term market outlook.
“The demand for e-bikes in general is really strong and it’s been growing year-on-year,” Roose said. “In 2023, there’s been a bit of a slowdown, but the mid to long-term demand for micro mobility in general is as strong as it’s ever been and we’re super bullish.”
Revenues have risen by 38% year-over-year for Cowboy’s best-selling models, while its operating costs have fallen 19% year-to-date.
Roose said the company has also increased its margin to 40% — no mean feat for a hardware company — and has reduced its losses by 83% this year.
The company secured 13 million euros ($14.1 million) in additional funding from its existing institutional backers and crowdfunding investors in April.
The e-bike market is expected to reach $119.7 billion by 2030 at a compound annual growth rate of 15.6% from 2023, fueled by rising prices of crude oil and a move toward economical and environmentally friendly modes of transport, according to Fortune Business Insights.
Crypto execs says the bull run is underway and could lead to $100,000 bitcoin in 2024
Yuichiro Chino | Moment | Getty Images
Executives in the cryptocurrency industry called the start of a new bull run with a growing number of voices calling for fresh all-time highs for bitcoin in 2024 above $100,000.
Bitcoin has rallied more than 120% this year, with many optimistic about the surge continuing into 2024.
“It feels that was a year to get ready for the bull run that is yet to come. But the sentiment is very hopeful for  and 25,” Pascal Gauthier, CEO of Ledger, told CNBC last week in an interview.
The digital currency’s last record high of nearly $69,00 was hit in November 2021.
Since then, the crypto industry has been hit with a litany of issues from the collapse of coins and projects to bankruptcies and criminal trials. FTX, once one of the world’s biggest exchanges, collapsed with its founder Sam Bankman-Fried facing over 100 years in prison after he was found guilty on seven counts of criminal fraud.
Meanwhile, Binance chief Changpeng Zhao pleaded guilty to criminal charges and stepped down as the company’s CEO as part of a $4.3 billion settlement with the U.S. Department of Justice.
Many in the industry see the two cases concluding as a line being drawn under issues that have plagued the crypto market.
“I think that once you get the speculative phase out of the way, which I think we’re almost done with, probably not yet completely done, then you can get real builders focusing on the technology and the problems that can solve in the world, rather than just having a giant digital casino for people to trade,” David Marcus, CEO of Lightspark, told CNBC last week in an interview.
Marcus, the former leader of Facebook’s failed Diem stablecoin project, is now working on technology to improve bitcoin as a payments network.
Now that those issues are out the way, investors are focused on what the industry sees as positive developments. The first is the growing excitement that a bitcoin exchange-traded fund, or ETF, might be approved soon. This could bring in larger traditional investors who previously did not want to touch crypto.
“I think what the ETF means really is that bitcoin is going mainstream, and that’s what people were waiting for,” Gauthier said.
The second development is the bitcoin halving, which takes place every four years and is scheduled for May 2024. Halving is when miners, which are entities who uphold the bitcoin network, see the rewards for their work cut in half. This keeps a cap on the supply of bitcoin — of which there will ever only be 21 million coins — and often is a factor behind a new rally.
“A number of market participants are expecting a bull run some time after the halving, but given the ETF news, we could very well have a run before that leaving most investors on the sidelines. That could cause a massive upward run in the price,” Vijay Ayyar, vice president of international markets at cryptocurrency exchange CoinDCX, told CNBC.
There have already been some bold calls for bitcoin in 2024.
It began with Standard Chartered last week which reiterated an April price call that bitcoin would hit $100,000 by end of 2024. The bank said this will be driven by the approvals of numerous ETFs.
That would mean a roughly 160% rally from Friday’s price of around $38,413, according to CoinDesk data.
Matrixport, which bills itself as a crypto financial services firm, released a note last week projecting bitcoin would reach $63,140 by April 2024 and $125,000 by the end of next year.
“Based on our inflation model, the macro environment is expected to remain a robust tailwind for crypto. Another decline in inflation is anticipated, prompting the Federal Reserve to likely initiate interest rate cuts,” Matrixport said in its report.
“Combined with geopolitical crosscurrents, this healthy dose of monetary support should push Bitcoin to new highs in 2024.”
Many commentators see easing monetary policy as supportive for bitcoin which is viewed as a risky asset. Meanwhile, some see bitcoin as a sort of “safe haven” asset to pour money into in times of geopolitical strife.
When asked if bitcoin would hit $100,000 in 2024, Gauthier said “maybe,” but declined to give a price prediction.
“What we see is strong fundamentals,” he said.
Ayyar said that the price of bitcoin is “consolidating” below a “key level” of $38,000, which is bullish for bitcoin. Once this level is broke, bitcoin could rally to between $45,000 and $48,000 next, he said.
However, he warned the rally, which is in large part built on expectations of an ETF approval, could fail if the product is rejected by regulators again.
“An all out ETF rejection could play havoc to this run as well, hence definitely something to be mindful of,” he said.
Meta’s AI chief doesn’t think AI super intelligence is coming anytime soon, and is skeptical on quantum computing
Yann LeCun, chief AI scientist at Meta, speaks at the Viva Tech conference in Paris, June 13, 2023.
Chesnot | Getty Images News | Getty Images
Meta’s chief scientist and deep learning pioneer Yann LeCun said he believes that current AI systems are decades away from reaching some semblance of sentience, equipped with common sense that can push their abilities beyond merely summarizing mountains of text in creative ways.
His point of view stands in contrast to that of Nvidia CEO Jensen Huang, who recently said AI will be “fairly competitive” with humans in less than five years, besting people at a multitude of mentally intensive tasks.
“I know Jensen,” LeCun said at a recent event highlighting the Facebook parent company’s 10-year anniversary of its Fundamental AI Research team. LeCun said the Nvidia CEO has much to gain from the AI craze. “There is an AI war, and he’s supplying the weapons.”
“[If] you think AGI is in, the more GPUs you have to buy,” LeCun said, about technologists attempting to develop artificial general intelligence, the kind of AI on par with human-level intelligence. As long as researchers at firms such as OpenAI continue their pursuit of AGI, they will need more of Nvidia’s computer chips.
Society is more likely to get “cat-level” or “dog-level” AI years before human-level AI, LeCun said. And the technology industry’s current focus on language models and text data will not be enough to create the kinds of advanced human-like AI systems that researchers have been dreaming about for decades.
“Text is a very poor source of information,” LeCun said, explaining that it would likely take 20,000 years for a human to read the amount of text that has been used to train modern language models. “Train a system on the equivalent of 20,000 years of reading material, and they still don’t understand that if A is the same as B, then B is the same as A.”
“There’s a lot of really basic things about the world that they just don’t get through this kind of training,” LeCun said.
Hence, LeCun and other Meta AI executives have been heavily researching how the so-called transformer models used to create apps such as ChatGPT could be tailored to work with a variety of data, including audio, image and video information. The more these AI systems can discover the likely billions of hidden correlations between these various kinds of data, the more they could potentially perform more fantastical feats, the thinking goes.
Some of Meta’s research includes software that can help teach people how to play tennis better while wearing the company’s Project Aria augmented reality glasses, which blend digital graphics into the real world. Executives showed a demo in which a person wearing the AR glasses while playing tennis was able to see visual cues teaching them how to properly hold their tennis rackets and swing their arms in perfect form. The kinds of AI models needed to power this type of digital tennis assistant require a blend of three-dimensional visual data in addition to text and audio, in case the digital assistant needs to speak.
These so-called multimodal AI systems represent the next frontier, but their development won’t come cheap. And as more companies such as Meta and Google parent Alphabet research more advanced AI models, Nvidia could stand to gain even more of an edge, particularly if no other competition emerges.
Nvidia has been the biggest benefactor of generative AI, with its pricey graphics processing units becoming the standard tool used to train massive language models. Meta relied on 16,000 Nvidia A100 GPUs to train its Llama AI software.
CNBC asked if the tech industry will need more hardware providers as Meta and other researchers continue their work developing these kinds of sophisticated AI models.
“It doesn’t require it, but it would be nice,” LeCun said, adding that the GPU technology is still the gold standard when it comes to AI.
Still, the computer chips of the future may not be called GPUs, he said.
“What you’re going to see hopefully emerging are new chips that are not graphical processing units, they are just neural, deep learning accelerators,” LeCun said.
LeCun is also somewhat skeptical about quantum computing, which tech giants such as Microsoft, IBM, and Google have all poured resources into. Many researchers outside Meta believe quantum computing machines could supercharge advancements in data-intensive fields such as drug discovery, as they’re able to perform multiple calculations with so-called quantum bits as opposed to conventional binary bits used in modern computing.
But LeCun has his doubts.
“The number of problems you can solve with quantum computing, you can solve way more efficiently with classical computers,” LeCun said.
“Quantum computing is a fascinating scientific topic,” LeCun said. It’s less clear about the “practical relevance and the possibility of actually fabricating quantum computers that are actually useful.”
Meta senior fellow and former tech chief Mike Schroepfer concurred, saying that he evaluates quantum technology every few years and believes that useful quantum machines “may come at some point, but it’s got such a long time horizon that it’s irrelevant to what we’re doing.”
“The reason we started an AI lab a decade ago was that it was very obvious that this technology is going to be commercializable within the next years’ time frame,” Schroepfer said.
How $100 billion mining giant Rio Tinto is poised to benefit from the EV boom
Global demand for copper, a major component of electric vehicles, is expected to grow from 25 million metric tons to nearly 49 million metric tons by 2035, according to S&P Global.
But miners face a multitude of issues as they ramp up production, including addressing the concerns of local stakeholders, mitigating environmental damage and operating in remote regions of the world.
“There’s going to be a real problem with this transition over the next ten years,” said Tyler Broda, metals and mining analyst for RBC Capital Markets. “It is very, very hard for these companies to even maintain the level of production that they have at the moment.”
Jointly based in Australia and the UK, Rio Tinto is one of the world’s largest mining companies with projects in 35 countries. It has 17 iron ore mines in Western Australia that produce material used in steel, as well as mines that produce aluminum, diamonds, and boron, a component used in smartphones.
So what is Rio Tinto doing to ramp up production of its critical minerals business? CNBC got a behind the scenes look at Rio Tinto’s Utah operation to find out.
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