With more people starting to integrate electric vehicles into their lives, the realm of possibilities seems wide open if you’re an electric bike maker in 2022. Momentum keeps building, batteries and technology keep improving, and more people are open to the idea of trying a different means of transportation than ever before.
Of course, things become more complicated in May, 2022, if you’re Ukranian company Delfast with staff based both in the U.S. and in Ukraine. The crew is a tight-knit group, led by CEO Daniel Tonkopi. He grew up in the city of Almaty, which is the former capital of Kazakhstan. When Tonkopi was 11, he rode a motorcycle for the first time while visiting his grandfather, who lived near the Ural Mountains in Russia. It was a Dnepr sidecar machine, and the feeling of freedom was one that would go on to change his life forever—even if he didn’t know it yet.
Later, as he grew, Tonkopi traveled. He says that everywhere he’s been, people are what make the difference. So far, he’s lived and worked in Singapore, Mexico, and Portugal, just to name a few places. Eventually, he settled in Kyiv, Ukraine, in 2009 where he started Delfast. Above all, he says the most important ingredient to any place is the people—and he felt completely at home with the people of Kyiv.
In 2021, Tonkopi and a few other team members moved Delfast’s headquarters from Kyiv to Los Angeles, California. They now live together in what Tonkopi describes as a startup house (and he adds, for the record, that the TV show Silicon Valley is not that far from reality). As of May, 2022, Delfast maintains its headquarters and final assembly facility in Los Angeles, and its R&D facility in Ukraine—where the majority of its employees are currently based.
We recently had the opportunity to speak about both the excitement and the challenges with Delfast CEO Daniel Tonkopi (with a few appearances by PR manager Iryna Zaloha). The following conversation has been lightly edited for clarity.
How have sales been going? Have they been really good since the pandemic?
Yes, absolutely, definitely. I'll just give you some figures. The first quarter of 2022, this year, we tripled our revenue, comparing to the first quarter of 2021.
In April, we made a historical maximum of our sales volume, so we are growing. April, [we] made plus 70 percent comparing to March, so we are growing, we're really growing fast, and we have huge demand.
We speak with dealers, we sign contracts, I'm sign[ing] contracts with dealers almost every day, and we see increased interest [in] our bikes from customers here in the US. And we made a right move to come to Los Angeles, because now, customers and dealers are understanding that we are here, that we have our stock here, we have bikes in stock in Los Angeles, we have spare parts if something's broken, we can reply quickly to their requests. So yeah, that was absolutely the right move to be here, closer to our customers.
So, does that mean that most of your market is in the U.S., or what would you say is where most of your market is?
Yes, the short answer is yes, and just to elaborate, about one and a half year ago, we analyzed our sales volume when we were just in Kyiv, when we had just one office in Ukraine, and we were selling globally from our Kyiv office, and we realized that 80 percent of our sales volume comes from the US.
15 percent is just European Union countries, like different countries, all the European, and five percent of the rest of the world. So, we realize that we have to be here, near our customers.
How has the war been affecting your business?
Oh, thank you for asking.
Yeah, I'm sorry.
It's been tough, of course. First of all, we stabilized our team in both countries, in Ukraine and here in [the] U.S. That was the main goal, to make sure that everyone is right, everyone is safe, or as safe as they can [be]. And we did all that we could as a company, and personally, we also helped with relocation, with money, with everything. We had our reserve fund in our company. Of course, we took all the money and we said, everyone, no one is going to be fired or cut in salary, nothing, so we keep working, you could be sure that you have your money and all the support that we can.
And I would say, it took about maybe two to three weeks just to set up for all the issues to relocate some people to [the] west of Ukraine, to European Union countries, to our American office, and now, all our team is safe and continue working, so we just keep working.
Our business processes were not affected, because our main production is in China, and our final assembly is here in Los Angeles. So yeah, as I mentioned too, during the war, we have increased our sales volume, and yeah, everything is going, in terms of business and logistics, everything is going really great.
I wouldn't say [that] about Ukraine, unfortunately, but we do everything to win as company, me personally, we donate five percent to the people of Ukraine, and I [have been] speaking to senators about aid [for] Ukraine, we go to protest rallies, we address congressmen, and we help with humanitarian aid, so we do what we can from here, from abroad, and yeah, it works.
Since you moved to LA, do you still have a large number of people in Ukraine, or is it mostly in LA, or how is it divided, your staff?
We found our marketing director here in California, and now we have nine people in our California office, and about 30 people in Ukrainian office. Just to elaborate, me as CEO, chief revenue officer, chief marketing officer and chief of engineering are here, so we sell from Californian office and we have R&D office in Ukraine, like customer support, sales support, our finance and HR, so our support office is in Ukraine.
Tell me a little bit more about [the Dnepr electric bike project], because I know you had the Bonneville speed project, but you're also making a production bike.
Yes, that's a good question. I [want to] tell you a personal story. I was 11 the first time I rode a motorcycle. [It] was a village in the heart of Russia. My mother was from Russia, and near [the] Ural Mountains, so my grandfather had a Dnepr motorcycle with a side car. I was a boy, I was a kid, so I took his Dnepr, and that was [the] first time I received a shot of adrenaline.
Yes, and I [fell] in love [with] bikes and motorcycles and all this, like two wheelers and three wheelers, because I could feel this freedom that I could go anywhere on the river, on some fields, just on the neighbor village, just anywhere. And the Dnepr was a legendary Soviet motorcycle, they produced several millions of motorcycles, literally, so that was a legend, absolutely total legend.
So, maybe three years ago, we in Kyiv, realize that we now can do something with this trademark, because in ‘90s it [went] bankrupt, the factory was just sold to a developer, and they created office buildings there, and our Ukrainian office is located at the same place where this Dnepr bikes were produced in Soviet times.
So, we were sitting at the same place of the production, [and] we thought, "Okay, we are making bikes and we can revive this legendary trademark—but now in new century, with new motor, with electric power, so, let's do it." And we [wanted] to get the trademark and all the IP rights for this motorcycle, so we thought, "Yeah, okay, we can do it now, we are allowed to do it now."
Our prototype was developed by Sergey Malik, who is a multiple record holder of world records and Ukrainian records in motorcycles and in cars. Sergey helped develop this bike power train, and he established the Bonneville speed record in August. It was 104 miles as far as I remember...Well, but this story is just in the beginning, because this is just a prototype. We are going to go to mass production and to produce this powerful bike in the next year.
When the war began, we realized... We had concerns about the naming, because Dnepr... Dneper, with E in the middle, it's a Russian style of naming, but not everyone in our company likes this Russian style.
We thought it could be better to use Ukrainian pronunciation, which is the Dnipro. After [the] war started, we made our decision, okay, we're not going to use the Russian Soviet name, Dnepr, and now it'll be only Dnipro, [the] Ukrainian name.
Also, we had a design developed by Russian industrial designer, motorcycle designer, so he made it in 2021, but now we realized, okay, we stop all the communication with Russian suppliers, with Russian contractors, with Russian anyone, with clients.
So, we, as Delfast company, we stopped all the cooperation with Russia. That's why we decided to stop using this design, provided by Russian designer. So, now we don't have [a] design, but it's okay, we will work on it, we'll come back to it later, so now this project is on pause, at least the war is over, but no more Russian design.
You'll come up with something even better, I'm sure.
Yes, definitely. Thank you for believing. And we are actually going to launch a new model. Yeah, it wouldn't be a heavy motorcycle.
During the war, our designers developed [an] absolutely new model. Literally, during the last two and a half months, they came up with new project, new prototype, and it is based on more than 50,000 requests from potential clients, from bike users, from e-bike users, from our customers, from different forums and from everywhere.
So, people who love e-bikes just gave us their feedback, and we collected it, analyzed it. And so, just a few examples, one person said, "I want swappable battery." And our current model doesn't have one. Okay, swappable battery.
A second [person] said, "I need a basket to put bags from grocery store." Yeah, another one said, "Okay, I [also need] a bag." But for another person, "I want to put my dogs there." So et cetera, et cetera. We analyzed more than 50,000 asks and requests, and our designers and engineers came with this new model.
We already produced [the] first prototype. It happened during, literally, the last two and a half months.
Oh, my goodness.
Yeah, it usually takes two years or something, the development of new model, but the war has empowered us and made us stronger.
Yes, yes, this is a good impact of what's happening. We don't have much good news, but this is good news, that we started to work harder and we put our efforts into creating something new. We cannot just [be] afraid. Hidden in the basement. Yeah, we cannot do it forever. So, you want to create something, and we created this new model. So, in August, we are going to launch our crowdfunding campaign.
Now we are preparing these marketing materials, video and everything. So, coming soon, stay tuned. We'll be glad to share more information with you later.
It'll be more mass product, because people were telling us, "Okay, I don't need the battery for 200 miles, I don't need such power, I will be fine with 70 miles." Okay, which cuts the battery three times, and the price goes down.
Other people said, "I don't need a heavy motorcycle, I like the lighter one." Women said, "We also want an e-bike." So, this one [the Top 3.0] is more brutal, it's for men mostly. We created this new model for both men and women. And the most important thing, we will create a really smart bike.
We have our proprietary onboard computer, so it's a fully connected bike, and it'll have a full functionality mobile app. You are in this industry, and you know that when we get an e-bike, just random e-bike, you usually don't have a mobile app.
But when people buy an e-bike, they don't want just a bicycle with the motor, they want the smart bike, they want a Tesla on two wheels. So, this is what we do, we are creating a gadget on two wheels, with all the features, like push notifications if something is happening. If the bike is stolen, for example, then the owner will see where it is right now, and our engineers can block the motor and everything. History of travels, all the temperature and telemetric 24/7, so a lot of smart features with our onboard fully functional computer.
That sounds intriguing, for sure. Do you have any idea of a timeframe for when you guys are going to release it, or not quite yet?
Yes, we are going to announce this bike on 1st of August. [Also,] our current model [the Top 3.0] will be upgraded in June .
What kind of upgrades?
Smart features. The computer will be implemented first in our current model, which is Top 3.0, and it'll be Top 3.0i, intelligent.
Is there anything else that you would like to tell us?
We opened our workshop and assembly facilities here in Los Angeles, so now we are making our final assembly here in LA, which makes a big difference, because now we have our quality controls here, we have our engineers here and we have a place just to come. Well, it's not open to the public, but we have some people who are coming, they just want to speak with our engineers, so yes, now they can do this.
We also fixed our supply chain issues. Previously, last year, we had delivery time of about four to five months, because of the global logistic issues with China issues and everything. Today, our delivery time is just up to two weeks. Usually it is one week, but okay, let's say one to two weeks.
That seems pretty reasonable.
Yes. We have our stock here in Los Angeles, so yeah, bikes are available, and yeah, it's really important, especially now, in the beginning of the season.
What's your dealer network like currently?
I just don't remember the exact number of dealers, but we have [a] chain of dealers in Los Angeles, in San Francisco, in San Diego, across California. We have dealers in New York and Florida and Miami in particular. We speak with many dealers in Texas and other states. So currently, we have most of our dealers in these four states, and we are constantly working on expanding our network.
If someone who wasn't anywhere near one of your dealers wanted to order a bike from you, they still could, correct?
Of course. We'll deliver a bike to him or to her, and we will find a workshop near them. So yeah, we will provide our warranty support and after warranty support, so a person could buy and could find some spare parts at the nearest bike shop. So yes, this is how we usually work, for example, if a person from a far village orders a bike, it's our job to find a bike dealer and the bike workshop in his or her area, and to provide the best service.
What happens when there's a firmware update? What does a customer do at that time?
When we implement this new onboard computer, starting from 1st of June, the updates will be available just via wifi or SIM card. Usually SIM card.
So, will it be something that they'll be able to do themselves, they won't have to go see a dealer for it?
Yes, definitely. We will even send these updates to those bikes and to their mobile applications, so they will see some notification on their smartphone that the update is ready, so please install if you want to see these features.
Unfortunately, we won't have it for iOS at the very beginning. But so, on the 1st of June, we are going to launch our Android application, and soon, in the next, I hope, couple of months, we are going to launch iOS application as well.
Cool. Any other exciting news that you want to share?
I want to share that we are going establish a production facility here in the US. This was one of our biggest goals, not just to move headquarters, but to move the assembly here, to the U.S.
Bikes will be fully assembled here, and probably it will be Texas, or Nevada, might be California, but we are still searching for the best places in terms of taxes and costs and everything.
Our goal is to move production from China to the U.S., and we started our venture round, series A round, so now I'm speaking with investors almost every day, I have several meetings with potential VCs and funds, or so we are collecting $20 million to move production and to scale our business even faster. We are growing right now, year to year, so we are going to grow 10X.
Do you have an idea of a timeframe, or is that really just funding dependent, or what do you imagine?
We are aiming to close around the end of summer, but of course it depends on investors. As soon as we pass due diligence and all the processes. Well, our best timeframe would be until the end of summer, but we are flexible. It usually takes time. This is definitely important news that I wanted to share.
Oh yeah, absolutely. That's a big deal.
Yeah, thank you. And I'm really excited to be here and to work here, and I can see that there... From definitely Los Angeles area, in my opinion, is the world capital of electric vehicles.
There are so many.
Right, right. And we had a chance to compare. So, we are selling bikes, e-bikes, and we know the situation globally, and I can see that Los Angeles... There are two places with a lot of EV fans, in California there are, in San Francisco and Los Angeles. But Los Angeles, probably because of the weather, probably because of the ocean, I don't know why, but here, even more EV fans than in San Francisco. So, I would say, definitely, Los Angeles is the best place to launch a global EV company.
It's like if you're a director of a movie, and if you want to create a movie which will be shown in all cinemas all over the world, and if you want to get an Oscar, you have to be here, mostly, in Los Angeles, in Hollywood, because yeah, it's the capital of film industry. So, I believe that Los Angeles is the capital of EV industry as well.
And I'm thrilled to be here, and I'm super excited about doing business here. I see a lot of support from the [federal] government, [and] from the California governor's office. So, and now, today, America is moving towards electric vehicles. [President] Biden has banned Russian oil, and he said that the nation should refuse using oil and gas in the long-term perspective, and he's investing billions of dollars into EV infrastructure.
So, I believe that in the next 5, 10 years, we'll see huge differences on the roads. We'll see more electric cars than traditional gas cars, which will make a huge impact on the environment, the air will be cleaner. And I mentioned that I came from Kazakhstan, but I didn't say that my father was an ecologist, and [that] he was a professor of ecology. He wrote more than 400 books, about ecology, about clean air, pollution of oceans, nuclear disarmament in Soviet Union and everything, so all the environmental issues.
So, I'm a kind of second-generation environmentalist, and I wanted to make something for this world. And when I was younger, and I lived in Almaty, I saw a huge ecological problem in Almaty. It has smoke, it has pollution, polluted air, so the air in Almaty is literally black, because yeah, the city is surrounded by mountains from three sides, and because of that, there is-
Yes, yes, exactly, yes. Just, the smoke is staying over the city and not going anywhere, so that's why there are a lot of air breathing diseases, like problems with lungs, just kids and adults, yeah. And so, from a very young age, I wanted to make the air cleaner, I wanted to do something about it, and now I have this opportunity. Electric vehicles are the answer. So, I believe in 10 years, our cities will be much cleaner, and our air.
I hope so.
Yes, we're working on it. I'm building a global company from here, from LA, and this is probably the best place in the world to create global EV business.
Cool. Is there anything else that you would like to tell us?
Iryna: Daniel, personally, and all our company helped our employee, or employees from Kherson city, which is under occupation, under Russian occupation, to be evacuated from there. And actually, one of our employees, N, was under occupation, and Russian soldiers came to her house, so it's the reality of Ukrainian teammates.
Daniel: They came to her house and asked her to show her phone, and they were with guns. Okay, she couldn't say no. She showed her iPhone and they saw some anti-Russian post, anti-Russian memes, and so, they deleted all the information, they formatted her phone. You know how to do it, to make it like a new one.
Yeah, and said, "Okay, your phone has new life now, and you have to come to our police station tomorrow, and you will have new life also."
You know what? She said that some journalists who were pro-Ukrainians previously, after this visit to police station, they became pro-Russians, and she didn't want to know why it happened. It was really absolutely terrifying.
Yeah, it sounds like it.
Iryna: Now she's in a safer place. She's in Odesa. But actually, we have a meeting every Monday, and our teammates just share their stories, because personally, I [am] based in Ukraine too, but I’m based in the Western part, so I'm more or less safe here.
Daniel: Yeah, we just want to make sure that everyone is fine. This is how our week starts. We see everyone, we ask how is he or she doing, what's going on, where is he or she? And yes, N is now in Odesa, which is relatively safe. Yes, not fully safe, there is no ‘safe place’.
But of course, it's much better than Kherson, which is occupied by Russia. Another colleague of Iryna’s, D, is in Kharkiv, and yeah, of course you know, what's happening Kharkiv, and when she joins our calls, she has black curtains on her windows, and [it’s] dark, no lights in her room. And we asked, "Could you please turn on the lights?" And she said, "No, because I will [light] my window for Russian missiles."
And we said, "Of course you don't have to."
This meeting is not that important.
Iryna: But we all, it looks like we just got used to working in such conditions. I believe that work is something that helps, in some way, to survive this time.
Well, because you have something to do, you have something to concentrate on, instead of just worrying all the time.
Daniel: Yes, yes. And here in LA, I started, in the first days of war, of course I was at rallies, at protest meetings, and I thought, "Okay, what else can I do? Rally is not enough." It is necessary, obviously, I go every time. Yeah, but what else can I do? I thought maybe I should address, not just to all the people, but to those particular people who can help, the congressmen and senators.
I just made a post on my Facebook and social media, "Hey guys, I'm making a group of people who will write to senators' Twitters." So, we started to share the information, because they didn't know what's happening, they didn't have this information, so our mission was to educate them, to share.
We shared photos, we shared our evidence, and we are from Ukraine and we live in Ukraine, so we know what's going on. So, we just entered every congressman and senator's Twitter, and posted our stories, posted our needs. We said, "Please help us, we need such humanitarian help, we need this weapon and that." So, we started to speak on Twitter, to share this information.
After that, American citizens joined this movement, the American protest movements from Venice Resistance, Indivisible Group and other groups with American people, they started to help us Ukrainians. And they said, "Okay, this Twitter is good, but you should address directly to senators, you should write petitions to them, you should describe the situation in an official way." We said, "Okay, you know how it's working, please help us."
They helped us to organize meetings with senators and congressmen. So as the next step, I had a lot of meetings with congress persons, and I collected a group of Ukrainian leaders, like entrepreneurs like me, famous YouTube bloggers, people from finance, lawyers, and from different spheres, from real estate, like famous Ukrainians. And I called this group ULAW, which stands for Ukrainian Leaders Against the War.
As this group, we started to share the information from the heart of the conflict, from the heart of the war, to senators. We had Zoom call with Congressman Swalwell in LA, for example, and one guy, he's a well-known entrepreneur, he created a cyber sport team, number one in the world, champion of DOTA, if you're aware of [it]. Cyber sports, he's well known, yeah.
He was suited in a military uniform, with a gun, and he said, "Oh guys, sorry, I thought it's 7:00 PM, but it's 7:00 AM, so I am on duty, on combat duty now, is it okay?" And they said, "Yeah, it's okay. Could you please show us what's happening?" And he showed us bombs. We could hear air raid sirens.
So, the congressman could see and hear what's happening, and he could hear a story from N from Kherson, and D from Kharkiv. He could speak with them, so they shared their stories, what's happening, so they received all their clear and unfiltered information.
And after that, always, literally always, all this congress person made some steps, some actions.
Either they signed [a] petition to Biden, or they addressed the California National Guard, or they provided some humanitarian help, et cetera, et cetera. So, at the end of the day, all this work led to [S.3522, Ukraine Democracy Defense Lend-Lease Act of 2022]. So, all the senators, 417 congress people, voted for this Lend-Lease Act, and we have our part of impact in this 417, and maybe 10 percent or something, but we did an impact.
That's important. Every person doing what they can adds up to a lot. It might feel like you're only doing a small amount, but you get a bunch of people doing a small amount, and soon you have a whole bunch.
Absolutely. Yes, I totally agree. So, we did our part to help Ukraine, to help to sign this Lend-Lease Act, and we absolutely sure that now the war will be finished sooner, and Ukraine will definitely win. There are no other options, never, never, and only win of Ukraine. And I'm sorry for my mistakes in English, I'm learning it.
That’s OK, you’re doing a whole lot better than I would be in Ukrainian. Thank you for taking the time to speak with us today, and I hope everybody stays safe.
Nice speaking with you. It was a pleasure.