Two Western Slope startups sold to industry heavyweights this month, reflecting a win for rural entrepreneurs who have been championing Colorado’s nascent rural startup ecosystem beyond Denver and Boulder.
This week, Eagle e-bike pioneer QuietKat sold to outdoor conglomerate Vista Outdoor Inc., which owns brands like CamelBak, Bell, Giro and Camp Chef. Vista Outdoor announced the acquisition during an investor presentation on Wednesday. Details of the deal were not announced.
This story first appeared in The Outsider, the premium outdoor newsletter by Jason Blevins.
Montrose’s Nomad Reservations was acquired by publicly-traded Camping World Holdings, the country’s largest retailer of RVs. Nomad Reservations, launched in 2016 by tech-savvy RVers who struggled to book campgrounds during their prolonged travels, offers online reservations for travelers as well as a property management system for campground owners. Nomad’s CampgroundBooking.com site works for both owners and travelers. The company is planning to remain in Montrose.
These are the first rural startups to be acquired in recent months. Eagle-based motorcycling app REVER was acquired in November by Comoto Holdings, the parent company of motorcycle retail brands like Revzilla and Cycle Gear. That deal also left REVER in Eagle.
And these won’t be the last deals for Western Slope startups, said Jamie and Cory Finney, whose $17.5 million Greater Colorado Venture Fund has invested in 21 rural Colorado companies in recent years.
The brothers have been beating the drum for rural entrepreneurs for several years, seeding innovators and their ideas beyond the Front Range while encouraging larger investors to expand their search for opportunities beyond metro areas.
Colorado startups on the Western Slope have trumpeted their mountain-town headquarters as a competitive advantage “and now the people who are buying them are agreeing with them,” Cory said.
“That’s one of the theories we have promoted for years. Live where you want and do what you want,” Jamie said.
Justin and Jake Roach founded QuietKat in 2012 as a tool for deer hunters to more swiftly and quietly reach their favorite locations. By 2014, as Americans began to embrace e-bikes, the Roach brothers began catering to all types of hunters and eventually all types of bike riders. Today, they are one of the country’s top e-bike brands with 47 employees in Eagle. And the e-bike market is exploding, with sales up 145% in 2020 over 2019, with big cities rolling out fleets of free-to-use electric-powered bikes and federal land managers adjusting policies to accommodate the new types of bikes and riders.
The Roach brothers are remaining at the helm of the company and all the employees are staying onboard as well.
“This is a great opportunity for us to reap the benefits and resources of a publicly-traded company while still maintaining that small-town culture we created within the company,” said Ryan Spinks, the company’s director of product development.
QuietKat has forged partnerships with luxury hotels in Hawaii that offer e-bike excursions as well as a unique deal with Jeep, which featured a QuietKat in its Super Bowl ad earlier this year.
The e-bike designer is now working with Jeep on the launch of its electric Wrangler.
QuietKat is remaining in Eagle.
Having headquarters in a small town on the Western Slope gives the company the ability to attract top workers, Spinks said. That’s a mantra from the champions of Colorado’s rural startups: The mountain lifestyle is just as much an employee draw as a fancy office in a big city.
“Not just entrepreneurs but the guys in our distribution center to our marketing and finance people to product development and our executive and sales team. They all want to be here,” Spinks said. “There’s a lot of value in having those passionate people.”
Nomad Reservations won big at last summer’s Greater Colorado Venture Fund’s pitch series, collecting $375,000 in venture capital with a plan to expand the company’s reservation system from 150 RV parks to more than 1,000 by 2022.
Jamie and Cory Finney helped support QuietKat, REVER and Nomad Reservations. The two have promoted the idea that investors will soon care little where nascent companies are located and cities don’t have to be ground-zero for innovation.
The coronavirus pandemic supported their rural-friendly concepts and upended the traditional American path to success that prioritizes a career above choosing where to live. Typically the job dictates location and then the family and house follow.
“Now 2020 showed us that quality of life is on par with careers and jobs. COVID threw us a decade ahead in our thinking about the American dream,” Jaime said.
That urban-to-rural migration is challenging communities as they grapple with affordable housing during an unprecedented migration of new arrivals.The wealthier new arrivals are spending big and setting record real estate prices, which prices out less-affluent locals. Communities that have spent years wooing location-neutral workers have landed them and now there’s a scramble to fit everyone in constricted mountain valleys.
“All roads lead back to affordable housing,” Jamie said.
The two expect to see more big companies acquiring rural startups as investors warm to remote work and highly skilled employees move to far flung communities.
“It’s wild. Venture doesn’t offer a lot of feedback so it’s nice to point to some early wins like this and say, ‘The model works,’” Jamie said. “At least the things we said would happen are proving possible and are not just living in a spreadsheet now.”