- Pitch Reviews
- Posts
- Understanding Recent Trends in Startup Funding Rounds
Understanding Recent Trends in Startup Funding Rounds
A Closer Look at Key Equity Crowdfunding Metrics Since 2020
CHART OF THE WEEK 📈
In this Chart of the Week, we look at three key metrics for early and growth stage Reg CF and Reg A equity crowdfunding rounds in the last four years.
Company valuations increased from 2020 to 2022 and only slightly declined this year. They seem to tie in with the VC market trend, which also sees startup valuations stagnating or slightly decreasing.
The median early-stage startup round size is at its lowest since 2020, with half of the companies only raising $106,000 or less.
While the median growth stage startup round size plateaued between 2022 and 2023 at $363,000, the average round size decreased sharply. This indicates a diminution in outlier rounds, raising extravagant amounts of money.
On average, the number of investors in every startup round tends to decrease since 2021 in both early and growth stage startup rounds.
Are you ready to transform your venture investing strategy? Don't miss the upcoming webinar hosted by KingsCrowd in collaboration with Doriot on Thursday, January 18th. Learn directly from Gerry Hays and Dan Devlin, seasoned experts in venture capital.
In this webinar, you'll:
Discover the groundbreaking Qualified Accredited Investor (QAI) program.
Gain insights into accredited investing and venture capital success.
Learn how to elevate your investment strategies and decision-making.
Special Offer: Attendees get exclusive discounts on QAI courses – $50 off the self-serve course and $100 off the virtual course with Cohort #2.
Register Now and unlock the secrets to becoming a top-tier investor in the venture world!
PITCH REVIEW 💸
Brief: L5 Automation is innovating in the agricultural sector with its patent-pending robotic technology for strawberry harvesting. Addressing the challenges of labor-intensive and delicate picking processes, their hand-eye-coordinated robotic harvester works as efficiently as humans but without fatigue. This technology promises to boost productivity and mitigate labor shortages, ensuring fresher produce for consumers. Supported by a National Science Foundation grant to enhance its bed-mapping software, L5 Automation's robots can adapt to existing fields without costly modifications, marking a significant advancement in agricultural technology. It’s raising $1.2M with a valuation cap of $15M and a minimum investment of $100.
Key People: Founder and CEO Alexander Gutierrez (15 years of robotics experience, previously co-founded Astrobotic Technology), Software engineering director Dan Schneider (specializes in building hardware enablers software, built software for the aerospace industry at Lockheed Martin Space Systems Company and earthquake detectors at QuakeFinder)
Interested in L5 Automation? Access the deal report HERE 🔓📈
Summary
Here's what we like: The company’s strategic focus on strawberries demonstrates its commitment to providing a tailored and effective solution for a specific segment of the fruit-picking market. By concentrating on strawberries initially, L5 Automation can refine its technology and establish a strong foothold in the industry.
While the competitive landscape in the fruit-picking robotics industry is slightly competitive, L5 Automation’s patent-pending technology has a unique technology that can pick up the fruits without having to modify the farm’s setup. L5 Automation will be easier for strawberry growers than most competitors, which requires elevating the plant rows. The high barriers to entry, including the complexity of real-world environments and the need for hand-eye coordination, further strengthen the company’s competitive advantage.
The company’s $15 million valuation cap is fair, given the complexity of its product.
Here's what we don't: L5 Automation operates in a slightly competitive farming and agriculture industry, with several direct competitors like Advanced Farm, BERRY, Agrobot, Octinion, Harvest CROO, and Traptic. These competitors also offer robotic solutions for fruit picking, including strawberries. While L5 Automation will be easier for growers to use than competitive products - which often require growing strawberries out of the soil, it remains to be seen how effectively it can capture a significant market share in the face of competition.
The US fruit picking market is growing quickly at more than 16% CAGR, but the market size remains small and is only estimated at around $500 million in the United States. While L5 Automation's technology has the potential to help growers address labor shortages and increase productivity, it may face resistance or slow adoption from growers due to factors such as cost, skepticism about robotic automation, or concerns about the impact on jobs.
Would you invest in L5 Automation? |
ON THE POD 🎙️
In this episode, we get into housing with ZenniHome's founder and CEO, Bob Worsley. A retired Republican State Senator and serial entrepreneur, Bob's career journey is as intriguing as it is inspiring. From establishing SkyMall to venturing into real estate and energy, Bob's latest endeavor, ZenniHome, stands at the forefront of the crop of startups providing housing solutions. These modern, steel-framed micro homes are not just a leap in sustainable living but also impact the housing landscape with their unique design, adaptability, and smart technology.
Listen to the full episode here
STAFF PICKS 🌶️
HUMANITEA targets the ready-to-drink (RTD) tea segment by offering organic, all-natural, non-GMO teas and lemonades in sustainable packaging. Beyond crafting quality beverages, the company is dedicated to social impact, partnering with charities like the American Foundation for Suicide Prevention. HUMANITEA has products in over 3,000 U.S. locations, including Sprouts Farmers Markets and college campuses.
Pre-Money Valuation: $7.8 million
Minimum Investment: $200
Bumbleberry Farms (Debt)
Bumbleberry Farms, an artisanal honey producer in Pittsburgh, is crowdfunding on Honeycomb. Known for high-quality honey and acclaimed honey cream spreads, their all-natural products are available in Whole Foods, Bloomingdale's, and various shops across the US and Canada.
Interest Rate: 10.75%
Minimum Investment: $100
Stack differentiates internet browsing by replacing traditional tabs with cards, enhancing collaboration, and streamlining online tasks like shopping, research, and remote work. Traditional browsers struggle with multitasking and collaboration, often leading to disorganized experiences. Stack transforms the browser into a collaborative, multi-player platform, offering an intuitive way to manage tasks and work together efficiently, fitting today's remote and digital work needs.
Valuation Cap: $15.5 million
Minimum Investment: $100