Due Diligence For

CROWDFUNDING

Monday Motorbikes

By February 20, 2017Due Diligence

Company Overview –

Their mission is to create a uniquely attractive, fully electric motorbike for urban transport, that is simple to operate, fun to drive & desirable to own.
*Souce: AngelList

Company Investment
Name: Monday Motorbikes Minimum Raise: $50K
CEO: Josh Rasmussen Maximum Raise: $1M
Company Founded: 2010 Structure of Raise: Common Stock
Location: Brisbane, CA Valuation: $20M pre-money valuation
Crowdfunding Portal: Start Engine Minimum Investment: $150
Crowdfunding Link: https://www.startengine.com/startup/monday-motorbikes  
Website: https://mondaymotorbikes.com/  

Review Overview

Positives Risks and Reservations
No license required for operation in most U.S. States High entry cost for consumers at $5,995, entry level traditional mopeds start around $3,500
Perks include significant credits towards the purchase of a motorbike 40-mile range in economy mode at 20 mph, sport mode allows the rider to reach upwards of 40mph but is recommended for off-road use only.
Battery prices have been declining rapidly over the last 4 years making electric vehicles more affordable $20M valuation based off of previous SAFE notes issued, but less than $500k has been invested. Previous SAFEs issued included a 20% discount while this offering does not.
Patented battery and theft-deterrent system $30,000 of the raise will go towards expenses incurred due to the crowdfund round.
No gears or clutch to operate, making an easy learning curve for new riders Company is not currently generating revenue but has collected $240,987 in deposits

Problem

Getting around in a city can be challenging. Cars are expensive, hard to park and cause traffic jams. Buses are slow, unreliable, and also get stuck in traffic. Motorcycles are heavy and require a special license. Bicycles are limited by human power and require effort.

Solution

Current:
Monday Motorbikes created the M1, an electric motorbike that people can ride virtually anywhere a bicycle or motorcycle can. The M1 is simple to use, doesn’t need a clutch or gears, and you don’t need a special license to ride it.

Long Term:
Over the next 5 years, they plan to utilize offshore manufacturing assistance to increase production to over 100,000 units and improve margins. They will also focus on enhancing global distribution while maximizing production output.

Business Model

Monday Motorbikes sells their bikes direct to consumer, through a dealer network, and are working on developing a business to business channel. They expect the majority of the sales to be either direct to consumer or through a dealer network. The retail price for the M1 is $5995.

Traction

  • Intel partnership established with loT groups
  • #1 spot in GQ “Best Stuff of the Year” (2015)
  • 330,000 website visitors from 5 continents, 146 countries
    *Source: Company provided on crowdfunding campaign website

Senior Management Team

  Josh Rasmussen Dr. Nathan Jauvtis Sarah Rizk
Position: CEO & Co-Founder Co-Founder & Chief Scientist COO
Ownership Percent: 11.5% 69.56% N/A
Linkedin: https://www.linkedin.com/in/joshrasmussen/ https://www.linkedin.com/in/jauvtis/ https://www.linkedin.com/in/sarah-rizk-53607411/

Summary:
Co-Founder Nathan Jauvtis has a significant tract record as a design engineer, along with a a PHD in Mechanical Engineering from Cornell University. CEO Josh Rasmussen has previous founder experience at his last venture ZipKick as well as previous roles in sales.

One interesting note is board member Zachary Levenberg is currently an Electronic Design Engineer for Tesla. The team seems to be well rounded and off to a great start with its board.

Market Analysis

Industry: Transportation

TAM (Total Addressable Market): $311B
*Souce: Portal Page

Driving Trends: The market for electric vehicles is growing at 60% a year
*Source: portal page

Industry Opinion:
Urban commuters have shown a desire for additional transportation options and the recent trend has been towards electric options vs. gas. With the cost of batteries significantly becoming more affordable in recent years, the entry point for electric vehicles have now entered into an affordable range. Although the price of the Monday Motorbike is still significantly higher than a traditional gas moped, the continued decline in costs of battery technology will benefit the industry.

Although Monday Motorbikes states their total available market as $311B, that is the entire global transport industry. The $16B e-bike industry is a more accurate depiction of the total industry.

Competition

Differentiator:
Monday Motorbikes has developed a patented battery and theft-deterrent system that addresses a previous major issue to e-bikes given the high value of the batteries. The sport mode on the M1 which allows the bike to reach upwards of 40 mph is also a major differentiator in the industry.

Main Competitors

  Zero Motorcycles Inc Brammo Outrider USA Voltbike
Funds Raised $64.66M $70M N/A N/A
Website http://www.zeromotorcycles.com/ https://www.brammo.com http://outriderusa.com/ http://www.voltbike.ca/

Company Financials

Revenue Last Fiscal Year: $3,451 (2015)

Previous Funds Raised:
The company has raised money through a SAFE round. They raised $365,000 at a $15 million valuation cap and a 20% discount, $30,000 at a $16.5 million valuation cap and a 20% discount, and $50,000 at a $18.5 million valuation cap and a 20% discount.

Use of Funds

  • Selling
  • General
  • Administrative
  • Working capital
  • Purchase inventory and material to produce motorbikes

Exit Opportunities

The acquisition of Brammo Electric Motorcycle by Polaris in 2014, shows the major manufacturers have taken notice of the newly developing electric bike and motorcycle trend. Brammo had previously raised $50M+ in capital prior to being acquired with a majority coming from Polaris

Recent Acquisitions in the Field

Date Company Acquired Acquired By Amount
2014 Brammo Electric Motorcycle Polaris Unknown

Expert Opinion Summary

Monday Motorbikes will be an interesting to watch as they evolve. Currently, the cost of entry is significantly higher than alternative options but as with many vehicle companies at similar stages the costs to produce tends to drop significantly as production increases. The valuation is certainly significant given the lack of revenue and it is disappointing that previous SAFES issued by the company included a 20% discount when this offering does not.

I would evaluate this company as being a hybrid of the traditional rewards based crowdfunding and equity crowdfunding. If your intent is to preorder an M1, this is an exciting deal with a $500 investment getting a $500 credit towards an M1 purchase. A $2,000 investment gets a $1,000 credit. By looking at this offering as more of a preorder with a bonus of receiving equity, there are a lot of appealing qualities. If evaluating this purely as an investment, concerns of valuation and offering terms could be more prominent.

AngelList: https://angel.co/mondaymotorbikes
Crunchbase: N/A

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. 
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Jake Fisher

Entrepreneur and Angel Investor. Along with founding Crowdfund Research, Jake is the Managing Partner at Venture Formations.
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