Hövding is a collar worn around the neck that turns into a rapidly inflating airbag when the bike rider is in an accident.
The 'helmet' uses rechargeable battery-powered accelerometers and gyroscopes, which are used to detect the types of violent motions involved in a bike crash.
This then triggers a gas inflator that pumps helium into the nylon airbag, almost instantly creating a hood around the head to cushion the impact of hitting the street, a car or anything else.
Anna Haupt and Terese Alstinat developed the idea as part of their industrial design master's thesis at Sweden's Lund University, reports TechCrunch.
The duo have spent the past seven years developing the product and have raised $10 million (£6.3 million) in venture capital funding.
The Hövding is now on sale from the company's website priced at 3998 SEK (£379/$597) each.
Watch a video on the "invisible bike helmet" development below: