Due Diligence For

CROWDFUNDING

All Posts By

Meghan McClelland

ComicBlitz

By | Due Diligence | No Comments

Company Overview –

ComicBlitz is focused on streaming digital comic books. It provides tools that enable readers to organize, zoom, rate and review the comic books.
*Souce: Crunchbase

Company Investment
Name: ComicBlitz Minimum Raise: $50K
CEO: Jordan Plosky Maximum Raise: $1M
Company Founded: 2014 Structure of Raise: SAFE
Location: Los Angeles, CA Valuation: $5M Valuation Cap
Crowdfunding Portal: Wefunder Minimum Investment: $100
Crowdfunding Link: https://wefunder.com/comicblitz  
Website: https://www.comicblitz.com/  

Review Overview

Positives Risks and Reservations
There is a large and steadily growing market for comic books. Marvel has their own digital subscription service, a partnership to offer their content, which currently about 43% unit share, could prove to be difficult
Negative reviews of competitive products signal room for an improved service It is concerning that ComicsFix, a very similar offering is ‘taking a short pause’
CEO has direct experience in the industry Scribd, which had a digital comics component, has very recently canceled its comics service
Competitor Comixology is Amazon-owned
Not an attractive service to comic book collectors who still prefer hard copies they can collect and have signed
The valuation seems high compared to revenue and other comparable startups at this stage

Problem

The comic book industry is behind the tech curve. People still have to go to a physical store to purchase their comic book for $3.99 a piece. Each time a new issue comes out, customers are forced to pay $3.99. If they are interested in multiple series that cost can add up quickly.

Solution

Current:
ComicBlitz has created an all-you-can-read subscription for digital comics. For the cost of two comic issues per month, customers can get unlimited access to a variety of comics. Customers are able to read the comics from their laptop, iPad, iPhone, and soon Android.

Long Term:
Their focus will be to broaden the user platforms and partner with more publishers to give customers and even greater selection.

Business Model

ComicBlitz currently has a subscription model where they charge $3.99/month for 10 issues or $7.99/month for unlimited issues.

Traction

  • Over 5,500 registered users
  • Signed 29 licensing deals with content providers
  • Over 200% growth rate in current subscribers for 2016
  • 177% increase in monthly page reads for 2016
  • 240,000+ impressions in Apple App store
  • Users in over 133 countries
  • TechWeek LA Finalist in Startup Competition
    *Source: Company provided on crowdfunding campaign website

Senior Management Team

  Jordan Plosky Gregory Weiss
Position: CEO CTO
Ownership Percent: 56% 37.65%
Linkedin: https://www.linkedin.com/in/jordan-plosky-16b56b6/ https://www.linkedin.com/in/gweiss27/

Advisors:

  • Mark Coleman – SVP Global Sales at DoubleClick
  • Samantha Saturn – Former CMO of Comixology
  • Dinesh Shamdasani – CEO & CCO of Valiant Entertainment
  • Michael Kim – Global HR Business Partner for Spotify

Summary:
The CEO has experience in the comic book sector, but neither the CEO nor CTO appear to have experience running a company. The company does not appear to have a board of directors, however, there is a strong list of advisors.

Market Analysis

Industry: Comic Book, Digital Media

TAM (Total Addressable Market): $1.03B (North American market size, 2015)
*Souce: Comichron

Industry Opinion:
The comic book industry is large and has shown steady growth over previous years. With 74%* of unit share in 2017, two major companies dominate the industry.
*Souce: DiamondComics

Competition

Differentiator:
ComicBlitz has developed a low cost all-you-can-read online subscription service for comics that is available on several different electronic devices.

 Main Competitors

  Comixology Marvel Unlimited ComicsFIX**
Funds Raised $15.68M* N/A N/A
Price $5.99/month $9.99/month $8.99/month
Website https://www.comixology.com/ http://marvel.com/comics/unlimited http://comicsfix.com

* Includes 1.05M of known debt
**On their website: “TAKING A SHORT PAUSE WHILE WE ARE WORKING ON RELAUNCHING OUR SERVICE WITH MORE EXCITING FEATURES AND AMAZING PARTNERS.”

Company Financials

Revenue to date: $985

Revenue Last Fiscal Year: $985 (2015)

Previous Funds Raised: 15 separate convertible notes totaling $166,500 from 12/2014-8/2016

Use of Funds

  • License premier content
  • Online customer acquisition
  • Outsource further technology development
  • Pay salaries
  • Hire additional team members
  • Rent office space

Exit Opportunities

Potential exits in this space include DC, which has yet to provide an online subscription service, as well as tech giants and other entertainment companies.

Recent Acquisitions in the Field

Date Company Acquired Acquired By Amount
April 10, 2014 Comixology Amazon Unknown
Sept. 21, 2015 Oyster Google $30M

Expert Opinion Summary

While fans in forums have shown an interest in digital comic books and seem to appreciate the cost savings over print copies, the success of this service likely depends on being able to provide quality content. The industry is dominated by two major companies, Marvel and DC. Marvel owns 43%* of unit market share and already has their own digital subscription service, a partnership is likely to prove difficult. To his credit, the CEO has already been talking to them and is confident that ComicBlitz will eventually be able to help them expand their reader base. The valuation for this offering seems high given the current revenue and traction shown to date.
*Souce: DiamondComics

AngelList: https://angel.co/comicblitz
Crunchbase: https://www.crunchbase.com/organization/comicblitz-llc#/entity

Disclaimer

Crowdfund Research is a publisher and does not offer investment advice to any specific individual.  Crowdfund Research and its authors do not receive any compensation for the due diligence reports. 
 Crowdfund Research and its authors do not offer investment advice, nor do we endorse or recommend investments in any company or the suitability of an investment for any particular investor. Crowdfund Research is not registered as a broker-dealer or financial or investment advisor and does not provide any services requiring such registration. The information in this report or on our website regarding any company is based on publicly available information or directly from the subject company.  Crowdfund Research makes no representation or warrant as to the adequacy, accuracy or completeness of such information. Any opinions or forecasts expressed herein are our own, are not intended as investment advice and are subject to change without notice. This report has been prepared solely for informative purposes and is not a solicitation of an offer to buy or an offer to sell any security.
This report or the posting of information on our website regarding any company, including any links to information on our website, should not be construed as an endorsement or recommendation of that company for any purpose whatsoever.  This report does not take into account the investment objectives, financial situation or needs of any particular investor, and each investor should consider whether any investment opportunity is appropriate given their investment objectives and current financial circumstances. Any person considering any investment in any equity crowdfunding investment whatsoever is encouraged to consult with their own investment or financial advisor, tax advisor and/or attorney beforehand.
All investments entail risk. The companies on our site are generally small or early stage companies and are subject to risks inherent in investing in any small or early stage company as well as other risks specific to their business and operations. In addition, securities of these companies may be highly illiquid, requiring that they be held for an indefinite period of time or have a limited market for resale. Therefore, no one should invest in any of these companies unless they have no need for liquidity of their investment and can sustain a total loss of their investment.  You should only invest an amount of money that you can afford to lose without changing your lifestyle.
You should thoroughly review the complete offering materials for any investment opportunity, particularly all risk factors, prior to investing in any offering and become familiar with the investor requirements, investment limits and your ability to resell the investment.