Erik Buell Racing raises $20 million

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L1005297

Hot of the wires this morning is news that Erik Buell Racing has just secured $20 million in foreign capital. ”The funding will allow the motorcycle company to design and produce additional models of street bikes and to expand its exports,” stated FirstPathway, the investment bank which handled the funding. ”The next step is to build a much more affordable motorcycle,” states Erik.

Photo: Grant Ray

“It’s very exciting actually to start over again,” continues Erik. “I really appreciate the opportunity we had with the old company because we got a lot of fans, made quite a few motorcycles, sold them worldwide, and we also learned a lot. Now, getting a fresh start where we can be kind of independent and very much focused on the sport bike customer is a real breakthrough for me and the team here.”

According to reports, EBR will expand its existing production facility and create up to 200 new jobs. The company’s sole model, the EBR 1190RS, costs over $40,000. EBR is now going to aim to create new products in the $20,000 price range, taking rivals like the Ducati 1199 Panigale head on.

That $20 million may sound like a lot to you and me, but increasing staff to 200 and ramping up production is going to cost far more in the long run. We’ve heard through anonymous sources that EBR is already seeking additional financing.

  • noone1569

    Pretty excited about this. That amount of funding should certainly help. They are expanding to a 54000sq ft factory now, and producing the rotax cases in house.

    • smoke4ndmears

      Cases in house? That is interesting news.

      • noone1569

        Yep. I thought so. Read some good info about it on badweatherbikers.org

        • smoke4ndmears

          got a specific link? i love my buell, but unfortunately the buell community on the internet is stuck with that ugly dinosaur of a message board that is badweb for the bulk of its info.

          • moshaholic2

            buellxb.com – more friendly, has some squids. But, cooler none the less.

            • noone1569

              80% of buellxb.com is pretty awesome. 20% is full of flat billed douchekids. . .that is no fun.

              I agree that badweb has a shitastic layout and some ridiculous political talk, but it is the go to for technical information and EBR insite.

              As for a direct link, let me see if I can find it again for you.

          • Scott-jay

            FoxNews may be a BadWeb sponsor.

  • Jerry Guy

    New street bikes next year? Sounds ambitious

    • http://worldof2.com/ jpenney

      What about EBR isn’t ambitious? What was it 1.5 years from H-D to the 1190RS?

      • joshua

        Well and going from a high functioning, but expensive race bike to a cheaper(but still far from cheap) road bike should be far easier than going from blank paper to a working street bike. For all we know, just producing more of them will drive the per motorcycle price down. The biggest question I have is what are the government requirements? Are Epa problems likely?

        • http://worldof2.com/ jpenney

          There look to be quite a few places on the 1190 where costs could be saved and still have a good bike. Staying with the 1125 engine instead of rebuilding each one to and 1190 would be a start. The suspension could be knocked down a tier or two. Move some of the body work from carbon fiber to plastic and so on.

          Yeah, it will be cheaper, but it will also be cheaper.

          • smoke4ndmears

            seems more likely that 1190 will be the initial displacement. there can’t be that many 1125R engines left.

            • moshaholic2

              the 1190′s are punched out 1125′s. 1125 is the base engine as it comes from Rotax. So there is essentially and “endless” supply of 1125′s

              • smoke4ndmears

                I know this, but what I’m saying is that the additional machining that EBR is doing in-house to the heads, installing the carillo rods and custom pistons will all be done at the source.

                • moshaholic2

                  Ok I’m with you now… At the 20k pricepoint they would have to be 1190′s.

                  Once they roll out the 15k models, those will likely be 1125′s. Which they can easily tune to 160hp or so from the factory.

                  Either way, I’m stoked and cant wait!!!

  • moshaholic2

    Fucking awesome!!!!! Go EBR!!!

    • Bronson

      +1

  • JTB

    Suhweet. Way to go!

  • http://www.faster-faster.com fasterfaster

    Big congrats to Erik – you just can’t keep this guy from building motorcycles. Can’t wait to see what they come up with next.

  • rohorn

    And what did Wandell spend to shut him down?

  • http://twitter.com/metabomber Jesse

    Two fists in the air, cheering.

  • Johndo

    Good news. Would be interested in seeing them build a re-interpretation of the Buell XB1200. I just bought an MT-01 and I must say putting a cruiser engine in a “sport”bike package totally makes sens to me. I can now have fun at somewhat legal speeds :)

  • Roman

    If EBR can pull off a sub-$20k competitive superbike, that would be HUGE!!! Wonder why they haven’t tried Kickstarter to raise some capital, if a video game can pull in 7 figures, I’m sure EBR could too.

    • Kevin

      About 1%-2% of the population of Western countries ride motorcycles, versus lord knows what percentage play video games. Also, a video game costs $25-$60 versus a high end motorcycle at $20K. So no, I don’t really see Kickstarter working as a funding mechanism for motorcycle platform development. Maybe for lower ticket items, but even then I think the donor/investor base is probably just too small.

      • Roman

        You’re probably right, but no way of knowing till you try. Lotta people wanna see EBR succeed but can’t shell out $20k for a new bike. I know I’d gladly fork out $100 for a limited edition widget, if I knew the money was going toward developing an American superbike. Are there 20,000 people like me? I dunno, it’d be a good way to find out.

        • jp182

          agreed, there are quite a few items that have raised a TON of money from a relatively small number of people on Kickstarter and they’re not all video games or consoles.

    • ike6116

      Because it takes real money, a kickstarter wouldn’t do shit.

  • http://www.facebook.com/beastincarnate Ben W

    Bravo, EBR!

  • Robert M

    And KS takes something near 10% off the top up front.

  • Devin

    When I read “affordable motorcycles” I was really hoping for the 10 000$ range. As it is, I wish the guy the best, but 20 000$ bikes are unfortunately out of my reach.

    • http://hellforleathermagazine.com Wes Siler

      Do your realize the efficiencies of scale it takes to deliver a competitive $10,000 motorcycle?

      Honda makes 19 million motorcycles a year…

      • Aaron

        Maybe Bain capital can help?

      • HammSammich

        At this point, for EBR, I think that $20,000 would be a sweet spot that would allow them to remain relatively uncompromised in terms of quality and performance, which is where they need to be to gain a foothold.

        That having been said, you don’t need to make 19M bikes/year to be competive. Triumph makes about 50,000 bikes/year and they have some really great bikes in the $10k range.

        • http://hellforleathermagazine.com Wes Siler

          Triumph may make 50k bikes and Ducati 40k, but EBR makes 4 or 5 bikes a year. This 20mil will help them scale, but don’t look for volume sales anytime soon.

          • http://www.lgdm.fr stempere

            4 or 5‽ Holly shit i knew they didn’t build much but i was expecting the number to be closer to 100~150 a year…

          • Alex

            Not true in the slightest. They built all 100 of the 1190RS in one year I believe. When I was at the factory they were completing about 8 of them simultaneously.

      • http://hivelosangeles.com Sean Smith
        • Campisi

          Watch a few Koreans deliver fried chicken and McDonalds at full throttle on those little things and you’ll consider them full-fledged motorcycles, too.

          • http://hellforleathermagazine.com Grant Ray

            Mmmm, Korean fried chicken….

            • Campisi

              If only the local Okudak delivered…

          • http://rider49er.blogspot.com Mark D [EX500]

            After seeing the Vietnamese carry 400 lbs of hogs, or steel building materials, I consider them more truck than motorcycle.

            • filly-fuzz

              Similar to the CT110

              The moto ute of oz

  • randry

    If only HD would of let him do what he wanted. Instead they kept him on a leash. They would be on podiums instead of moving to India and being in classifieds.

    • Holden and Annette

      “being in classifieds” That is so awesome. I thought I was the only person who noticed this.

  • Triman023

    How about a better stock picture of Erik. This one looks like he is the manager of the Cafe Desmo and thinks you used to many sugar packets in your espresso.

    • smoke4ndmears

      his shirt does say ‘judge’ on the sleeve, so maybe the look is justified.

    • filly-fuzz

      here i was thinking it is charlie sheen

  • RioRanchoNM

    I currently own a XB12Ss and it is my favorite motorcycle in my 25+ years of riding. I bought it new in 09 for $12k. If he can get a new model out at $20k I will definitely buy one. To me that is a very competitive price for a “Made in America” sport bike, and a great way to support our American manufacturers.

    • Kevin

      I buy American cars… I own one GM, one Ford and one Chrysler. There is not an American made motorcycle I would be willing to buy, but at $20K Erik Buell might be making one.

  • Aaron

    I think they’re shooting for

    1. high price, low volume = 1190RS

    2. Mid price, mid volume.

    3. low price, high volume.

    • http://hellforleathermagazine.com Grant Ray

      I highly doubt you’ll ever see “low price” motorcycles from EBR.

      The only reason the Harley- era Buells were as low as they were was because of Harley’s ability to leverage purchase rates with its vendors by the interweaving the Buell BOM into the company’s already enormous scale of manufacturing and purchasing volumes.

      • http://hivelosangeles.com Sean Smith

        Harley also lost money on every Blast they ever sold because they were determined to meet that particular price point.

        • Campisi

          My understanding of the Blast situation was that Buell was required to use money from their own budget to develop and subsequently buy the Blast engines from Harley, thereby largely off-setting other losses Harley experienced on the project.

        • MotoRandom

          My local Harley dealer took down the Buell sign about a year and half before the factory folded. They said that Harley charged them $5k a year just for the franchise. The Buells were expensive to make so they only made a few hundred bucks on each sale. So they had they sell 16 to 18 bikes before they even began to make some money on the deal. Someone figured out they were making way more money on the used bikes they took on trade for HDs. I ended up having to drive to the other side of town to buy my Buell. Awesome bike, so much fun to ride, but no one was making any money on these things.

      • Aaron

        yeah, I think 12-15k would be the sweet spot for “low price”.

        • http://hellforleathermagazine.com Grant Ray

          Seriously, I can’t imagine you’re ever going to see anything below 16-18K from EBR. That’s just not a viable business model for a small manufacturer in the sportbike segment of this industry.

        • Scott-jay

          So, ’08 or ’09 Buell 1125 is a half-price deal.

  • bluemilew

    Hey Mr. Buell, this may sound crazy, but I’m an engineer, so hire me maybe?

    • http://rider49er.blogspot.com Mark D [EX500]

      Bravo

  • filly-fuzz

    news like this makes me happy

  • JC

    EBR FTW

  • donniedarko

    Id consider one…

  • http://www.postpixel.com.au mugget

    That is awesome stuff… gonna be interesting to see what bikes EBR build next…