BOULDER — The Pro’s Closet LLC — a 9-year-old Boulder business that touts itself as the largest used-bike store in the world — has raised $2.5 million in new equity funding as the company looks to expand its physical footprint nationally.
Range Light LLC, an investment firm with offices in Chicago and Boulder, was the sole investor, purchasing a minority stake in the company.
The Pro’s Closet founder Nick Martin said Thursday that the funds will be used largely build out the customer software needed to scale the business, which handles 100 percent of its sales online.
Over the past eight months, The Pro’s Closet has been prototyping a trade-up program, where bike owners receive an appraisal of their used bikes and a voucher from the company in that amount that they can use toward the purchase of a new bike at a partnering bike shop in town. The Pro’s Closet then reimburses those bike shops for the vouchers in exchange for the used bikes, which the company then sells or disassembles to sell the parts.
The Pro’s Closet moved its headquarters and processing center from north Broadway to new, larger digs at 2845 29th St. in February. The company, which saw sales just shy of $8 million in 2015, also has a warehouse in Denver.
Martin said the plan is to add warehouses in other cities where it can then strike up local partnerships with bike shops on the trade-up program, build community relationships, and gain access to more used-bike inventory.
“It’s been really successful, so we’re building out the plan to scale that out nationally,” Martin said.
He said the hope is to begin adding cities within the next year. Specific cities haven’t yet been determined, though he said likely targets would be other bike-friendly locales such as Portland, Ore.; Austin, Texas; and San Francisco, with California likely to come first.
The out-of-state locations will be lean operations with three people each that will gather bikes and send them back to the processing center in Boulder.
“We’re just going to test out and see what markets work best,” Martin said.
While The Pro’s Closet does sell some bikes, parting them out is the company’s core business model because much of their revenue comes from oversees and it’s easier to ship parts rather than whole bikes.
The company is already using about 10,000 square feet of space at its new location and is in the process of building out another 12,000. He said the hope is that the space will give the company room to grow for at least the next six years.
Founded in 2007, The Pro’s Closet now employs 33 people. Martin said that number won’t grow much in the short term, though more marketing and corporate functions will be added in Boulder as the business continues to ramp up in other markets.