Verge navigates financing options in tight market

Electric vehicle OEM Verge Motorcycle aims to expand its premium electric motorcycle business further into international markets with the help of its new chief financial officer, who has 20 years of experience in the luxury car industry. Estonia-based Verge Motorcycle is beginning to expand into the United States and other global markets, with the company looking at funding strategies, Chief Financial Officer Mark Wilson told Auto Finance News . “The first thing is, we're raising a 20-million-euro convertible note, in order to give us an uplift to buy the next batch of components needed for the next batch of bikes,” Wilson said. “We can raise the [$21.7M] convertible, which gives us some real proof points in terms of the next batch of bikes we're able to produce, and we have already customer demand that takes us well into next year.” After attaining the note, the OEM intends to focus on a series A round of funding as it seeks short-term and long-term financing, Wilson said. He said Verge Motorcycle intends to focus its U.S. strategy on California, which he noted leads the world in software, technology and tech adoption, and is a creative hub. The move follows the launch of its San Francisco innovation office in March. Finding a financial partner The company is also working on consumer financing options to increase access to its products, Wilson said. “Verge recognizes that a compelling finance offering from a strong financial partner will be integral to the wider rollout of the range,” he said. “At present Verge is in discussions with a number of household names and expects to be able to announce more by the end of the year.” Affirm , FreedomRoad Financial , Harley-Davidson Financial Services , Klarna , MotoLease and Octane Lending finance electric powersports vehicles in some capacity in the United States. [caption id="attachment_58332661" align="aligncenter" width="1024"] Courtesy of Verge Motorcycle [/caption] Luxury motorcycle market expectations Verge anticipates the market for premium motorcycles to be 1 million to 2 million units globally by 2030, Wilson said. “Verge needs a very small fraction of that in order to be extremely profitable.” The entire motorcycle industry is expected to hit 100 million units by 2030, he said. “The part of the market you really want occupied — the part of the market where all the margin is — is in the luxury space, and that's about supplying, not the mass market,” he said. "It's about supplying the top end in terms of price. “You can only do that if you've got compelling reasons why consumers will pay at the top end … and clearly Verge has technological leadership.” The company’s in-wheel motors are protected by intellectual property regulations, giving it a unique offering that can help it achieve its market share goals, Wilson said. The global electric motorcycle market is anticipated to be valued at $121 billion by 2030, according to a new study by Grand View Research . Expected growth by compound annual growth rate is 19% over that period. Financing in tight environment As the Federal Reserve has continued to raise interest rates , financial markets are tightening and attaining growth funds is more difficult, but experience in tough markets helps, Wilson said. “ I lived through Lehman [Brothers] , and that was a particularly tough time when we were at McLaren , as we were trying to scale a business coming in 2007, just ahead of Lehman,” he said. “That was difficult, but they’re great lessons learned, and there’s no substitute for the experience of having lived through those moments. This is not quite the same as Lehman because there isn't that intrinsic economic shock out there.” The collapse of Lehman Brothers and the Great Recession that followed caused a significant decline in credit availability, but in the current economic climate funds are available for the right companies, Wilson said. While funding is likely to take longer, “we believe Verge’s in that group of high-quality high-value propositions … hence why we're taking this ... phased financing approach.” Powersports Finance Summit, a premier event for companies involved in recreational vehicle financing, returns October 30-31 at the Bellagio Las Vegas and features a fireside chat with Yamaha Financial Services CEO Craig Hewitt. To learn more about the 2023 event and register, visit <a class="fui-Link ___1eya986 f3rmtva f1ewtqcl fyind8e f1k6fduh f1w7gpdv fk6fouc fjoy568 figsok6 f1hu3pq6 f11qmguv f19f4twv f1tyq0we f1g0x7ka fhxju0i f1qch9an f1cnd47f fqv5qza f1vmzxwi f1o700av f13mvf36 f1cmlufx f9n3di6 f1ids18y f1tx3yz7 f1deo86v f1eh06m1 f1iescvh fhgqx19 f1olyrje f1p93eir f1nev41a f1h8hb77 f1x7u7e9 f10aw75t fsle3fq f17ae5zn" title="https://autofinance.live/psfs/" href="https://autofinance.live/psfs/" target="_blank" rel="noreferrer noopener" aria-label="Link autofinance.live/psfs/"> autofinance.live/psfs/ .

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