Analyzing the Impact: How KingsCrowd Capital's Investments Compare to Broader Market Trends

CHART OF THE WEEK 📈

KingsCrowd Capital, the fund arm of KingsCrowd, is a $1.7 million ETF-like fund investing across the online private markets. Our investment strategy heavily relies on our proprietary Merlin ratings algorithm. Accredited investors have the opportunity to directly invest in KingsCrowd Capital, while non-accredited investors can participate alongside us by accessing each published "Top Deal," which reflects a KC Capital investment. These reports provide detailed insights into our investment rationale, offering an insider perspective on our decision-making process.

This week, our senior associate Olivia Strobl dug into the statistics derived from our portfolio of companies in 2023. It's important to note that not every company in our portfolio provided updates, and not all updates can be shared, so the data presented here represents a subset of our total investments:

• KingsCrowd Capital has made 32 investments in 31 companies since 2022, with one investment being a follow-on round.

• Portfolio companies span various industries, from food and beverage to healthcare technology, reflecting KingsCrowd Capital's industry-agnostic approach.

• The average revenue of KingsCrowd Capital portfolio companies in 2023 amounted to $3.3 million. For comparison, the average revenue for all active equity deals with 2023 data is $538,876.

• Portfolio companies maintained an average cash balance of $397,000 throughout 2023. This is slightly below the average for all active equity deals with 2023 data, which currently stands at $648,213.

• Regarding runway, KingsCrowd Capital portfolio companies averaged 10.8 months, with some companies being profitable and the lowest runway recorded at two months. All active equity deals currently average 7.5 months (excluding those that are profitable.)

• In 2023, KingsCrowd Capital portfolio companies employed an average of 19.5 full-time workers, with the smallest headcount at three and the largest at 72. The average headcount for all active equity deals in 2023 is 9.6.

Join our upcoming investment webinar to learn about becoming an investor in KingsCrowd, trusted by angel investors and VCs alike. Discover why KingsCrowd represents a compelling investment opportunity, and take advantage of a live Q&A session with the founder to address your specific inquiries.

Here’s just a few reasons why KnigsCrowd is a great investment:

• Solid Financials: KingsCrowd achieved over $735,000 in revenues in 2023, marking a +60% YoY revenue growth on a cash basis (unaudited).
  

• Innovative Fund Creation: We introduced KingsCrowd Capital, a data-driven fund akin to an ETF, already commanding $1.7M in assets, showcasing our algorithm's power and market trust.

• Diversified Revenue Streams: B2B sales now constitute 50% of our total revenue, demonstrating our strong market position and diverse business model.

Don't miss this opportunity to join a movement shaping the future of alternative investing. We look forward to sharing our journey and successes with you tomorrow, April 23rd, at 1PM EST.

PITCH REVIEW 💸

Brief: FuelRod is enhancing mobile device usage with its unique charging solution featuring a patented kiosk network that allows users to swap depleted or damaged chargers for new ones. Strategically located in high-traffic venues like theme parks, airports, and hospitals, these kiosks offer a sustainable alternative to disposable chargers. It’s raising $1.2M with a Pre-Money Valuation of $48M and a minimum investment of $398.

Key People: CEO Chi Yau, with over two decades of expertise, began his career at AT&T Bell Laboratories and has ascended to senior roles in various firms, bringing deep knowledge from both startups and global corporations. COO Joe Yeagley, offering 36 years in the power systems battery sector, co-founded FuelRod after significant roles at companies like Liebert Corporation and Exide Electronics of Eaton Corporation.

Interested in FuelRod? Access the deal report HERE 🔓📈

Summary

Here's what we like: FuelRod's patented mobile charging service is poised to capitalize on the growing demand for on-the-go energy solutions in an increasingly connected world. With over $52 million in lifetime revenue, a 10.90% annual revenue growth rate, and current annual revenue of $15 million, FuelRod's financial health is robust, reflecting a proven business model that is already profitable. The net income of over $1.2 million for the most recent fiscal year-end underscores their ability to manage costs and scale operations effectively.

The company's strategic placement of kiosks in high-traffic areas like theme parks, airports, college campuses, hospitals, and convention centers illustrates its success in identifying and targeting pivotal market segments. These placements enhance the visibility of the FuelRod brand and ensure a steady stream of users, evidenced by the completion of over 6 million swaps to date.

With a valuation of $48 million and a revenue-to-valuation multiple of 3.2x, FuelRod has demonstrated significant scalability, bolstered by substantial partnerships that extend its reach and market penetration. The business model, combining B2B2C distribution, creates diversified revenue streams and a wider customer base. The company's 11 patents give it a competitive edge, protecting its unique technology and facilitating future innovations in the portable charging space.

Here's what we don't: The portable battery market is rapidly evolving with frequent technological advancements. This may lead to a shorter lifecycle for FuelRod’s products and require continuous R&D investment to stay relevant. FuelRod’s development can be limited to travel-related locations, which may prevent the company from growing more.

While FuelRod holds patents that could protect its technology, the company must keep innovating to fend off competition from established players like MobileQubes, Chargebar, ChargeFuz, and PowerPod. These competitors may have more resources to invest in R&D and marketing, enabling them to capture a larger market share. Furthermore, as the adoption of portable power solutions grows, new competitors may enter the market, increasing competitive pressures.

Investors must also consider the capital intensity of maintaining a network of kiosks, especially as FuelRod looks to expand geographically. While the capital intensity level is low, expansion efforts could significantly increase costs. Should the company fail to manage these costs effectively, it could erode profitability and challenge the sustainability of its business model.

ON THE POD

This week, Chris talks with Luca Zambello, founder and CEO of Jurny, a pioneering tech company augmenting the short-term rental and hospitality industry with AI automations. Born from Luca’s early forays into luxury home rentals, Jurny evolved from a property management firm to a sophisticated software provider, addressing the industry’s scalability challenges through innovative technology. Luca dives into Jurny’s development, focusing on its automation capabilities and AI-driven solutions that streamline operations and enhance guest experiences across dispersed rental properties.

Listen to our latest episode HERE.

STAFF PICKS 🌶️

KIN Apparel

KIN Apparel offers satin-lined hoodies and hats tailored for individuals with curly or oily hair. By preventing moisture loss, frizz, tangles, and damage typically caused by traditional cotton hoods, KIN Apparel’s products have garnered a strong customer base of 60,000 and lifetime sales of $8 million. The brand's focus on inclusivity and functionality extends beyond hair care, offering comfort to those with sensory sensitivities and nurturing the scalps of cancer patients and survivors.

• Valuation Cap: $10 million

• Minimum Investment: $250

Countryside Solar Portfolio (Debt)

Countryside Solar Portfolio funds solar installations and battery storage across five farms: Pulliam Trucking and Farm, Rocky Acres Farm, Wooden Nickel Farm, La Finca Naturals, and Elephant Cloud. Founded by John Carey in May 2023, this initiative aims to significantly reduce carbon emissions by implementing sustainable energy solutions.

• Interest Rate: 10%

• Minimum Investment: $5

Tap Systems

Tap Systems is revolutionizing the augmented and virtual reality sectors with its advanced input technology. Its patented "eyes-free" input method offers ease, speed, and accuracy, addressing the limitations of traditional input solutions that are typically slow and error-prone. With over 40,000 customers and $4.5 million in sales, Tap Systems is establishing itself as a crucial player in adopting augmented reality and smart wearables across consumer and professional realms.

• Pre-Money Valuation: $65.2 million

• Minimum Investment: $300