Ukraine war: The Electric Bikes Facing Off Against Russia's War Machine | Tech News

Ukraine war: The Electric Bikes Facing Off Against Russia's War Machine

Delfast founder and CEO Daniel Tonkopi talks e-bikes in Ukraine and managing remotely during a military invasion.

| Updated on: Aug 22 2022, 13:09 IST
Delfast bikes
In May, Tonkopi made headlines when he shared images on Facebook of Ukrainian fighters using Delfast bikes to carry anti-tank weapons to the front.  (Delfast)

When Daniel Tonkopi founded Delfast in Kyiv, Ukraine, in 2014, he had no intention of building and selling electric bikes. He also never anticipated that his company would be caught up in a war with Russia or that his bikes would become military vehicles. But at 43, Tonkopi, a native of Almaty, Kazakhstan, now finds himself living in Los Angeles, running an e-bike company and remotely managing dozens of employees living in a war zone. In May, Tonkopi made headlines when he shared images on Facebook of Ukrainian fighters using Delfast bikes to carry anti-tank weapons to the front, demonstrating yet another use case for electrified two-wheelers.

“Our bikes are still working despite damages,” he told me on a video call earlier this month.

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Tonkopi moved to Ukraine from Kazakhstan in 2009. He'd been working for KazMunayGas, the state-owned oil and gas company, as a project manager building gas stations when he decided to head to Kyiv to try his hand as an entrepreneur. The vogue at the time was to build clones of successful U.S. tech companies, so Tonkopi made a version of Yelp for Eastern Europe. It was, by his own admission, a flop, as were several attempts that came after. “I became an expert in all the possible mistakes and how to not make a startup,” he says.

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Delfast began as a one-hour delivery company. (The name is short for “we deliver fast.”) Tonkopi wanted to use e-bikes for the service because they were cheap, quick, zero-emissions and didn't require couriers to pedal for hours on end. When he couldn't find bikes with long enough battery life to work all day, he decided to try building his own. His Frankenstein creations turned heads. “We heard a lot of asks from random people. ‘Hey, are you selling these bikes?'” he says. So, in 2017, Delfast launched a crowdfunding campaign, raised $165,000 and sold 44 e-bikes.

Over the next three years, Delfast functioned both as a courier company and an online e-bike shop. In 2020, a few days after Covid lockdowns began, Tonkopi sold the delivery business to a direct-to-consumer meat vendor in Ukraine. Delfast now sells a single e-bike model, the Top 3.0, via its website and a small network of independent bike shops. It has a top speed of 50 miles per hour, a range of up to 200 miles and a sticker price of $6,999. Last year, Delfast sold about 200 units, mostly to customers in the US. So far this year, says Tonkopi, sales are running at triple that pace.

Last fall, after realizing that 80% of the company's customers were in the US, Delfast opened an office in Whittier, California, outside Los Angeles, where Tonkopi and a few others work. The remaining 30 employees are still in Ukraine. Tonkopi spoke with Bloomberg about e-bikes as weapons, managing a startup through war, and the Delfast product pipeline. The conversation has been edited for clarity and length. You've got 30 or so people in Ukraine. How have you managed that workforce since the war began? Starting from February 24th, those were tough weeks, especially the first week, when we didn't know what was happening and what to do. We had some financial reserves, enough for three months of salary for all our personnel, so we told everybody, ‘You don't have to worry, you will have your salary no matter what, at least for three months.'

And we provided some of them with support to relocate. We found some houses and apartments in safer places. For example, one woman used to live in Kherson, a city fully occupied by Russia. At one point, Russian police or military forces came to her house. They asked her to show them her smartphone, her laptop and so on. They found anti-Russian messages and memes in her phone. So they deleted all the information in her phone and said, ‘Okay, now your smartphone will have a new life. And you will come to our police station tomorrow at 11 a.m. And you will have new life as well.' That was really scary. She didn't want to have any kind of new life with Russia. So one of our sales manager helped to find her a car in Kherson and to escape. She left to Odessa that night. Odessa is under attack as well. There is no safe place in Ukraine, but it's relatively safer. Are people now able to do their jobs? Yes. That was the first weeks. People are still sitting in bomb shelters. They live in their apartments or houses but when they hear air-raid sirens, they have to go into bomb shelters. It is constant bombing. Every Monday starts with a Zoom call with everyone, we ask them how they are, if they are safe, what's going on, and then we move on to our usual business issues.

What is crazy is that during the war, our engineers have developed a totally new product. They were tired of sitting in the basement and tired of being afraid, and they wanted to move their energy and inspiration into something new. And they created a new model for the US market, which we are going to unveil in the beginning of August. Do you have a name for it? We do, but it is still under consideration. It has a smaller battery and lower speed than our Top bike. We will do our best to make it affordable so more people will be able to use it. How did some of your e-bikes wind up in the war? When the war began, we decided that we are going to help the people of Ukraine and we are going to donate 5% of all our sales revenue as a company. And we've donated three e-bikes — two of our Top 3.0 bikes to Ukrainian military forces and one prototype to the volunteer division. They are using this prototype for their medical staff. Three bikes are what we had in our facilities at the beginning of the war. We deliver parts and semi-assembled bikes from China to California. And we have our stock here in Los Angeles. We have just an R&D center in Ukraine. We didn't have many spare parts in Kyiv.

The military adjusted them. They made an additional rear trunk for holding rocket launchers. They say it works well. According to their feedback, our bike is maneuverable, it is quiet and it cannot be spotted by heat sensors. So they can come to a position, do whatever they need to do, and then immediately leave without being spotted. They have a tough situation. Russian troops are attacking our army. It's hot. It's really hot. Our Ukrainian soldiers, sometimes they come back wounded and with some damages on their cars and vehicles. Our bikes are still working despite damages. It operates well in the hottest conditions. And you are also fundraising now? Yes, about a year ago, in the beginning of 2021, we did an equity crowdfunding round at People from Ukraine believed in our company. Three hundred of them invested. The average check was about $10,000. So we raised $3.4 million. That helped us to create our R&D center in Ukraine, to move our headquarters to California and to create a stock of bikes. We invested a lot into our supply chain, into logistics, and we decreased our lead time from four months, one year ago, to two weeks today.

Then we launched a Series A venture round at the beginning of this year. We paused at the end of February, but now I am back at it. The goal for the round is $20 million. We've received $2 million and right now I'm in negotiation for another $5 million. We have a product, we have a product plan, we have a platform, we have proprietary technologies, we have sales, and we are growing, even without outside investment. We need investment to make the growth faster. We are growing at 3x. We want to grow 20x. I'm building a multibillion-dollar company here.

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First Published Date: 19 Jun, 20:08 IST