Erik Buell Racing Raises $20 Million from Foreign Investors – Plans to Build $20,000 Motorcycle

Google+ Pinterest LinkedIn Tumblr

It has just been announced that Erik Buell Racing has received $20 million in funding from foreign investors. A part of the federal government’s EB-5 program, the deal was brokered by FirstPathway Partners, a company that specializes in facilitating the funding of companies through wealthy individuals that are abroad. The announcement is a boon for EBR, as the company has struggled for financing since it began operations after the closing of Buell Motorcycles by Harley-Davidson.

The $20 million in funding will go towards building more affordable models, says the Milwaukee-based company. In turn, this news means that Erik Buell Racing will need to bring on more staff, and expand its facility for production at a greater volume (54,000 square feet says Buell). Erik Buell Racing hopes to start selling $20,000 street bikes once it gets its business in order for larger volume, with the expectation being that those models will be similar to the EBR 1190RS, though without such high-spec components.

With $100 million generally being the number touted to bring a full-scale motorcycle company into fruition (i.e. one with full-production, distributors dealers, support chains, etc), the $20 million raised by EBR is one step down a much longer road of financing, though a critical piece in the puzzle of finding more funds.

With the investor(s) not being named, one has to wonder about whom it was that invested in Erik Buell Racing. With Hero MotoCorp’s Managing Director Pawan Munjal talking to Bloomberg about his interest in acquiring Erik Buell Racing, India’s largest motorcycle brand certainly seems like a likely suspect for today’s transaction — especially with the partnership already in place between EBR & Hero, as well as Hero’s sponsorship of the Erik Buell Racing’s AMA Superbike racing effort.

Source: BizJournals & FOX 6 Milwaukee; Photo: © 2012 Jensen Beeler / Asphalt & Rubber – Creative Commons – Attribution 3.0