Problem Definition
Pedalia is a Berlin-based e-bike subscription service founded in 2021. Customers pay a monthly fee and get an e-bike with repairs, servicing and basic theft cover included. When a bike breaks down, a Pedalia mechanic repairs or swaps it within 24 hours. Customers can cancel with one month's notice. Pedalia operates in five German cities (Berlin, Hamburg, Munich, Cologne and Frankfurt) and has 24,000 active subscribers paying an average of EUR 69 per month. That gives annual revenue of approximately EUR 20M.
Germany is Europe's largest e-bike market. Around 2 million e-bikes are sold there every year, and more than half of all bicycles sold are now electric. Most people still buy their bike outright, or lease one through their employer on a fixed-term company bike scheme. Pedalia's pitch is flexibility: no large upfront cost, no long commitment and no repair worries. The sector has not been easy, though. Well-funded players have struggled with the cost of repairing and replacing bikes, most visibly the Dutch e-bike maker VanMoof, which went bankrupt in 2023.
Pedalia has just raised a EUR 40M Series B. Its investors want the company to reach 75,000 subscribers within three years while showing a clear path to profitability. Management has three ideas on the table: launch in ten more German cities, grow harder in the existing five cities, or sell subscriptions through employers as an employee benefit. The founders have asked you to help them decide how to scale.
How should Pedalia grow from 24,000 to 75,000 subscribers in three years without destroying its unit economics?
Additional InformationAsk for dataInterviewer’s data
Provide only when the candidate asks relevant questions:
- Pedalia buys its e-bikes in bulk from a contract manufacturer at approximately EUR 1,500 each. The average e-bike sold in Germany in 2025 cost approximately EUR 2,550.
- Bikes are used for 4 years and then sold for approximately EUR 300
- Pedalia owns 26,400 bikes (1.1 bikes per subscriber, including spares and bikes in repair)
- Average monthly churn is 3.5%; customer acquisition cost (CAC), mostly digital marketing, is approximately EUR 180
- Approximately 4% of subscribers' bikes are stolen each year. After the customer's theft fee, Pedalia's net loss is approximately EUR 1,200 per stolen bike. For reference, the average insured bicycle theft claim in Germany was approximately EUR 1,270 in 2025.
- Competitor benchmark: Swapfiets, a large Dutch-founded bike subscription service, offers a comparable e-bike in Berlin from approximately EUR 65 per month, with repairs included
- Company bike leasing is widespread in Germany: approximately 2.2 million bikes are on employer leasing schemes, 720,000 new bikes were leased in 2025, and over 60,000 employers started offering it in 2025 alone. Typical contracts run for 36 months, and the employee usually buys the bike at the end.
- The Series B (EUR 40M) is equity. Pedalia has not yet used debt to finance its fleet.
Question 1Structuring
"The founders ask you how you would approach the question of how Pedalia should scale. Walk me through your structure."
Hint · Structuring
Build 3–4 branches that are specific to this client and question, not a generic framework. Check they don't overlap and together cover the problem.
Try it first, then checkCheck my answerModel answer
The analysis should follow three steps:
1. Is the core business healthy? (unit economics today)
- Revenue per subscriber: price, mix of models
- Cost per subscriber: bike depreciation (including spare bikes), servicing and repairs, theft, customer service and payments
- Customer economics: churn, lifetime, CAC, lifetime value (LTV) vs. CAC, payback period
2. Where can Pedalia grow? (growth options)
- Deeper penetration of existing cities: awareness, price points, new models (such as cargo bikes)
- New cities: size of the market, competition, launch costs, whether there are enough subscribers per city for efficient servicing
- New channels: employers (as an employee benefit), partnerships (housing developers, public transport)
For each option: size of the prize, unit economics, speed and capital required.
3. Can Pedalia fund it and execute it? (constraints)
- Fleet capital: the bikes needed for new subscribers, and how to finance them (equity vs. asset-backed debt)
- Operational capacity: mechanics, hubs, spare-parts logistics
- Risks: theft, repair costs, competitor pricing, higher churn in new segments
Bonus (case leadership): "Let me first check whether a subscriber is profitable today. If the core economics don't work, adding more subscribers makes the problem bigger, not smaller. Then I'll compare the three growth options using the same metrics."
What the interviewer is looking forInterviewer’s viewInterviewer’s view
This is a candidate-led case: let the candidate drive and ask for data. Share information from the Additional Information list only when asked.
Good: The candidate splits the problem into growth options (existing cities, new cities, new customer segments) and evaluates each on market size and cost.
Strong: The candidate builds the structure around unit economics per subscriber (monthly contribution, churn, CAC, lifetime value) and recognises that an asset-heavy subscription business can grow itself into bankruptcy if each new subscriber loses money. They evaluate each growth option on (1) size of the prize, (2) unit economics, (3) capital needs and (4) execution risk.
Excellent: The candidate first asks whether today's core business makes money per subscriber, before choosing where to grow. They note that the target (75,000) and the constraint (a path to profitability) may conflict, point to the capital needed for the fleet (each new subscriber means buying more than one bike), and bring up the VanMoof lesson that repair and replacement costs can sink an e-bike business.
Question 2Numeracy
"Using the data we have, calculate the monthly contribution per subscriber, the customer lifetime value and the CAC payback period for Pedalia's current business."
Hint · Numeracy
Write the formula before you plug in numbers, keep units and zeros explicit, and sanity-check the order of magnitude at the end.
Additional InformationAsk for dataInterviewer’s data
Share if the candidate asks for the cost breakdown:
| Cost item (per subscriber per month) | Amount |
|---|---|
| Servicing and repairs (mechanics, parts, swaps) | EUR 16 |
| Customer service, payments and insurance | EUR 6 |
| Bike depreciation | Calculate from the fleet data |
| Theft losses | Calculate from the theft data |
Try it first, then checkCheck my answerModel answer
Step 1: Bike depreciation per subscriber
- Depreciation per bike: (EUR 1,500 − EUR 300) / 48 months = EUR 25.00 per month
- Per subscriber (1.1 bikes each): EUR 25.00 × 1.1 = EUR 27.50 per month
Step 2: Theft cost per subscriber
- 4% of bikes stolen per year × EUR 1,200 net loss = EUR 48 per subscriber per year
- Per month: EUR 48 / 12 = EUR 4.00
Step 3: Monthly contribution per subscriber
| Item | EUR per month |
|---|---|
| Subscription revenue | 69.00 |
| Bike depreciation | −27.50 |
| Servicing and repairs | −16.00 |
| Theft losses | −4.00 |
| Customer service, payments, insurance | −6.00 |
| Contribution | 15.50 |
Contribution margin: 15.50 / 69 = approx. 22%
Step 4: Lifetime value, LTV/CAC and payback
- Average lifetime: 1 / 3.5% = approx. 28.6 months
- LTV: EUR 15.50 / 0.035 = approx. EUR 443
- LTV / CAC: 443 / 180 = approx. 2.5x
- CAC payback: EUR 180 / EUR 15.50 = approx. 11.6 months
So-What Cascade:
- Level 1 (surface): Each subscriber contributes EUR 15.50 a month and is worth approximately EUR 443 over their lifetime.
- Level 2 (implication): At 2.5x, LTV/CAC is below the usual 3x benchmark, and the margin is thin. EUR 5 more in repair costs per month would cut contribution by about a third, and matching Swapfiets' price (approx. EUR 65) would cost EUR 4 of the EUR 15.50. This is how VanMoof-style problems start.
- Level 3 (actionable): Pedalia should grow first in channels where the economics are better than today's (lower churn, lower CAC, lower service cost per bike), not simply copy today's model into more places.
What the interviewer is looking forInterviewer’s viewInterviewer’s view
The candidate should calculate depreciation per subscriber (including the spare bikes) and the theft cost themselves. Watch for two common mistakes: forgetting the 1.1 bikes per subscriber, and forgetting the residual value. A good candidate gets to the contribution and LTV. A strong candidate calculates the LTV/CAC ratio and payback and compares them with common benchmarks (LTV/CAC of 3x or more is usually considered healthy). An excellent candidate points out that the contribution margin is thin (approximately 22% of revenue) and that small changes in repair costs, theft or price could wipe it out.
Question 3Judgement & Insights
"The team has estimated the economics of each growth option in Exhibit 1. Which option or options would you prioritise, and why?"
Hint · Judgement & Insights
Read the exhibit title, axes and units first. Lead with the ‘so what’, then back it with one or two numbers.
Exhibit 1Unit Economics by Growth Option (per Subscriber)
| Metric | B2C: existing 5 cities | B2C: 10 new cities | B2B: employer subscriptions |
|---|---|---|---|
| Monthly price (EUR) | 69 | 62 | 75 |
| Monthly cost: fleet, service, theft, overhead (EUR) | 53.50 | 57.50 | 50.00 |
| Monthly churn | 3.5% | 4.0% | 1.5% |
| CAC (EUR) | 180 | 260 | 150 |
| Launch cost | None | EUR 1.2M per city | EUR 0.5M (sales team) |
| Additional subscribers possible in 3 years (team estimate) | 15,000 | 25,000 (2,500 per city) | To be sized |
Source: Pedalia case file
Additional InformationAsk for dataInterviewer’s data
- New cities are mid-size German cities (for example Leipzig, Dresden, Hanover, Nuremberg). Each needs a service hub and a local team, costing approximately EUR 1.2M to launch.
- In new cities, Pedalia would have fewer subscribers per square kilometre, so mechanics spend more time travelling
- The employer offer: companies pay for (or co-fund) a monthly subscription for employees. Employees can cancel monthly, unlike a 36-month lease. Bikes are serviced in batches at the workplace.
- Employer sales cycles take 4–9 months
Try it first, then checkCheck my answerModel answer
Calculations
| Metric | B2C: existing cities | B2C: new cities | B2B: employers |
|---|---|---|---|
| Monthly contribution | 69 − 53.50 = EUR 15.50 | 62 − 57.50 = EUR 4.50 | 75 − 50 = EUR 25.00 |
| Average lifetime (1 / churn) | 28.6 months | 25.0 months | 66.7 months |
| LTV (contribution / churn) | approx. EUR 443 | approx. EUR 113 | approx. EUR 1,667 |
| LTV / CAC | approx. 2.5x | approx. 0.4x | approx. 11.1x |
| CAC payback | approx. 11.6 months | approx. 58 months | 6.0 months |
Prioritisation
- B2B employer subscriptions (first priority). Best on every metric: contribution is 60% higher than B2C (25.00 vs. 15.50), churn is less than half, and payback is six months. Employers do much of the marketing, and batch servicing at the workplace lowers cost. This option needs to be sized next.
- Densify existing cities (second priority). Economics are acceptable (2.5x) and will improve as B2B subscribers raise density and bring down service cost per bike.
- New cities (do not launch as B2C). Each subscriber is worth approximately EUR 113 but costs EUR 260 to win. Payback (approx. 58 months) is longer than the average customer lifetime (25 months), so Pedalia would never recover the CAC, and ten launches cost a further EUR 12M. Only consider a new city when an employer contract brings enough subscribers to reach existing-city density.
What the interviewer is looking forInterviewer’s viewInterviewer’s view
Ask the candidate to calculate contribution, LTV and LTV/CAC for each column before giving a view.
Good: The candidate calculates the metrics and prefers B2B because it has the best ratios.
Strong: The candidate spots that new-city B2C destroys value: each subscriber is worth less than it costs to acquire, before counting EUR 12M of launch costs for ten cities. They recommend B2B plus densifying existing cities, and note that B2B has not been sized yet.
Excellent: The candidate notes that the three options are linked. B2B subscribers in existing cities raise density, which lowers service cost for B2C subscribers too. A new city could become attractive if it launches with an anchor employer that brings enough density from day one. They also question the B2B churn assumption (1.5%) and ask what it is based on.
Apply the "So What?" cascade when evaluating answers:
- Level 1 (surface): "B2B has the highest LTV/CAC."
- Level 2 (implication): "New-city B2C loses money on every subscriber (LTV approx. EUR 113 vs. CAC EUR 260), so it moves Pedalia towards the 75,000 target while moving it away from profitability."
- Level 3 (actionable): "Lead with employers in the existing five cities, use B2B density to improve B2C economics, and only open a new city when an anchor employer contract guarantees enough density."
Question 4Numeracy
"How big could the employer channel be in Pedalia's five existing cities? Estimate how many B2B subscribers Pedalia could win in three years."
Hint · Numeracy
Write the formula before you plug in numbers, keep units and zeros explicit, and sanity-check the order of magnitude at the end.
Additional InformationAsk for dataInterviewer’s data
Share if the candidate asks:
- Approximately 2.2 million bikes are on company leasing schemes in Germany, and approximately 11% of eligible employees use a scheme. Assume one bike per user.
- Pedalia's five cities account for approximately 15% of eligible employees in Germany
- In a Pedalia survey, approximately 5% of eligible employees who do not use a leasing scheme said they would take a flexible monthly e-bike subscription if their employer offered one
- Pedalia believes it could win approximately 20% of this interested group within three years, given competition and employer sales cycles
Try it first, then checkCheck my answerModel answer
Step 1: Eligible employees in Germany
- 2.2 million bikes / 11% usage = approx. 20 million eligible employees
Step 2: Eligible employees in Pedalia's five cities
- 20 million × 15% = 3.0 million
Step 3: Not currently leasing
- 3.0 million × 89% = 2.67 million
Step 4: Interested in a flexible subscription
- 2.67 million × 5% = 133,500
Step 5: Pedalia's three-year capture
- 133,500 × 20% = approx. 26,700 B2B subscribers
Value of the channel (at run-rate)
- Revenue: 26,700 × EUR 75 × 12 = approx. EUR 24.0M per year, more than today's whole business (approx. EUR 19.9M)
- Contribution: 26,700 × EUR 25 × 12 = approx. EUR 8.0M per year
Does it close the gap to 75,000?
| Source | Subscribers |
|---|---|
| Today | 24,000 |
| Densify existing cities (B2C) | +15,000 |
| Employer channel (B2B) | +26,700 |
| Total in 3 years | 65,700 |
| Target | 75,000 |
| Gap | 9,300 |
The two attractive options take Pedalia to approximately 65,700 subscribers, about 88% of the target. The remaining gap should be filled only with new cities that open with an anchor employer, not with loss-making B2C launches.
What the interviewer is looking forInterviewer’s viewInterviewer’s view
Let the candidate build the logic before giving each number. The key step is working back from the leasing fleet and the 11% usage rate to the number of eligible employees. A strong candidate also converts the result into revenue and contribution, and checks whether it closes the gap to 75,000. An excellent candidate sees that the target is not reached with the two attractive options alone and discusses what to do about the remaining gap.
Question 5Synthesis
"The founders are meeting the board tomorrow. What is your recommendation?"
Hint · Synthesis
Answer first: the recommendation, two or three reasons with numbers, then risks and next steps.
Try it first, then checkCheck my answerModel answer
Recommendation: Pedalia should scale through employers first and densify its existing five cities. It should not launch ten new B2C cities. This plan reaches approximately 66,000 subscribers in three years with better unit economics than today. The last approximately 9,000 should come only from new cities that launch with an anchor employer.
Why:
- Employers are the best channel. B2B subscribers contribute EUR 25 a month vs. EUR 15.50 for B2C, churn less than half as often, and repay their CAC in 6 months. LTV/CAC is approximately 11x vs. 2.5x today.
- The channel is big enough. Approximately 26,700 B2B subscribers are within reach in the five existing cities, worth approximately EUR 24M in revenue and EUR 8M in contribution a year.
- New-city B2C destroys value. Each subscriber is worth approximately EUR 113 but costs EUR 260 to acquire, on top of EUR 1.2M per city launch.
Funding the fleet:
- New subscribers: 15,000 + 26,700 = 41,700
- Bikes needed: 41,700 × 1.1 = 45,870, costing 45,870 × EUR 1,500 = approx. EUR 68.8M
- Acquisition: 15,000 × EUR 180 + 26,700 × EUR 150 = EUR 2.7M + EUR 4.0M = approx. EUR 6.7M
- Total approximately EUR 75.5M, almost twice the EUR 40M Series B. Pedalia should finance the bikes with asset-backed fleet debt and keep the equity for the B2B sales team, hubs and operations.
Risks and mitigations:
- B2B churn higher than 1.5%: pilot with 10–20 employers first and sign 12-month minimum contracts with employers
- Repair costs creep up as the fleet ages: track service cost per bike every month and standardise parts, avoiding the proprietary components that hurt VanMoof
- Price pressure from Swapfiets (approx. EUR 65/month): compete on service speed and on the employer offer rather than on B2C price
Next steps:
- Hire a B2B sales lead and sign 10–20 pilot employers in Berlin and Munich (Months 1–6)
- Negotiate an asset-backed fleet financing facility (Months 1–4)
- Agree with the board to replace the 75,000 target with a target for profitable subscribers, or accept the target only with anchor-employer city launches
What the interviewer is looking forInterviewer’s viewInterviewer’s view
Expect a structured, 90-second recommendation: answer first, three reasons with numbers, then the funding plan, risks and next steps. A strong candidate links the growth plan to its capital need. An excellent candidate is willing to challenge the target: reaching approximately 66,000 profitable subscribers is better than 75,000 with value-destroying ones.
Data Sources
Company figures for Pedalia (subscribers, prices, costs, churn, CAC, survey results and team estimates) are fictional. Market facts come from these public sources (numbers rounded for interview math):
| Fact used in the case | Source |
|---|---|
| Approx. 2.0 million e-bikes and 1.8 million conventional bikes sold in Germany in 2025; market value approx. EUR 5.85B (−7.7%) | ZIV – Zweirad-Industrie-Verband, "Market Data Bicycle Industry 2025", 2026, https://www.ziv-zweirad.de/2026/03/11/markdaten-2025/ |
| Average e-bike price in Germany approx. EUR 2,550 in 2025 (−3.8%, driven by discounts) | ZIV, "2025 Market Data for the Bicycle Industry", 2026, https://www.ziv-zweirad.de/wp-content/uploads/2026/03/Market-Data-Bicycle-Industry-2025.pdf |
| Company bike leasing: approx. 720,000 new leased bikes in 2025, approx. 2.2 million bikes in the leasing fleet, 60,000+ new employers offering leasing, approx. 11% of eligible employees using a scheme (up from approx. 8% in 2021) | ZIV, "Market Data Bicycle Industry 2025", 2026, https://www.ziv-zweirad.de/2026/03/11/markdaten-2025/ |
| Approx. 17 million e-bikes in use in Germany | ZIV, 2026, https://www.ziv-zweirad.de/2026/03/11/markdaten-2025/ |
| Approx. 5.1 million e-bikes sold in Europe in 2023 | CONEBI, "European Bicycle Industry shows resilience and growth potential despite 2023 economic challenges", 2024, https://www.conebi.eu/pr-conebi-bimp-2024/ |
| Swapfiets Power 7 e-bike in Berlin from approx. EUR 64.90 per month, repairs included | Swapfiets, "Power 7 Elektrofahrrad", 2026, https://swapfiets.de/de-DE/berlin/power-7 |
| Swapfiets charges for lost or stolen bikes range from EUR 0 to EUR 900; theft cover add-on from EUR 3.90 per month | Swapfiets Help Centre, "What additional charges might I have to pay?", 2026, https://help.swapfiets.com/extra-costs |
| Approx. 115,000 insured bicycles stolen in Germany in 2025; average claim approx. EUR 1,270; total approx. EUR 150M | GDV (German Insurance Association), "Weniger Fahrraddiebstähle – Schäden bleiben auf Rekordniveau", 2026, https://www.gdv.de/gdv/medien/medieninformationen/weniger-fahrraddiebstaehle-schaeden-bleiben-auf-rekordniveau-199150 |
| VanMoof's Dutch entities were declared bankrupt on 17 July 2023, owing approx. EUR 143.8M, after customer complaints about durability and slow repairs | Wikipedia, "VanMoof", accessed 2026, https://en.wikipedia.org/wiki/VanMoof |
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