Due Diligence For

CROWDFUNDING

Company Overview-

Motoroso is a new destination for automotive and motorcycle inspiration. Users can do a quick visual search, explore builds, and click right in the image to expose products, videos, articles and how-to’s. Their interactive platform makes it easy to get inspired, and soon they will build a product marketplace where users can purchase products from sellers they trust, and find the best installation shop to help with the project.
*Souce: Wefunder

Company

Investment

Name: Motoroso Minimum Raise: $50K
CEO: Alex Littlewood Maximum Raise: $1M
Company Founded: 2013 Structure of Raise: Future Equity (SAFE)
Location: Santa Clara, CA Valuation: $5M Valuation Cap, 20% discount
Crowdfunding Portal: Wefunder Minimum Investment: $300
Crowdfunding Link: https://wefunder.com/motoroso  
Website: https://www.motoroso.com/  

Review Overview

Positives

Risks and Reservations

Techstars alumni Solo founder
Active target market in automotive enthusiasts No proprietary technology
Partnership with Ford Limited barriers to entry in the space
20% MOM (month over month) traffic growth’ Business and monetization model hasn’t been established

Problem

The 40 million Americans who love cars & motorcycles currently spend hours scouring through old-school forums, hunting for the parts they want—across 10,000+ websites.

Solution 

Current:
Motoroso created a website with an interactive image interface for planning and sharing custom builds.

Long Term:
To grow “Motoroso for Professionals” to help service providers and shops do what they do better. They will also launch a marketplace that will enable customers to explore, buy and review products.

Business Model

Motoroso has three business models. The first is a subscription platform for service providers to attract new customers. The second model is product marketplace where consumers can go from finding an idea to being able to purchase it. Motoroso will take a commission on the sales purchased through their platform. The third model is an advertising platform that pushes relevant content to the right users.

Traction

  • Official Partner of the Detroit Auto Show
  • Partnered with Ford at SEMA ’15 & ‘16
  • Over 350 Official Brand Profiles
  • Over 60,000 Images uploaded and tagged
    *Source: Company provided on crowdfunding campaign website

Senior Management Team

 

Alex Littlewood

Position: CEO
Ownership Percent: 80%
Linkedin: https://www.linkedin.com/in/alex-littlewood-9b73172

Summary:
CEO Alex Littlewood brings a decade of startup experience with specialties in Social Media and marketing. Alex is a self-proclaimed car guy and having a project you’re truly passionate about is always a plus. As a Techstars alumni, he has a solid support structure to lean on. Alex is currently the only founder and sole team member. Being a solo founder always raises some concerns especially with a tech company. Development in these situations is often reliant out outside contractors without an equity interest.

Market Analysis

Industry: Automotive, focused exclusively on enthusiasts

Market Size: $80B

Industry Opinion:
Motoroso is entering an interesting market as car enthusiasts are very passionate and active but carry the non tech-savvy stigma. Currently, social engagement in this industry is very spread out across multiple channels and it will be a difficult road to consolidate a user base. The industry definitely appears to have a need for this type of solution but future traction will rely heavily on gaining large scale industry partnerships which they have already started.

Competition

Main Competitors:

 

Chariotz

Wheelwell, Inc.

Funds Raised N/A $2M
Website http://www.chariotz.com/ https://wheelwell.com/

Financials

Revenue most recent fiscal year: $17,270 (2015)

Previous Funds Raised:

  • $50,000 – convertible note, May 2014
  • $20,000 – Techstars accelerator, June 2015
  • $100,000 – convertible note, June 2015
  • $50,000 – convertible note, June 2016

Use of Funds

  • Expand functionality of ‘for professionals’ platform feature
  • Build a sales and marketing team
  • Build out product database and market place functionality

Exit Opportunities

As the sector hasn’t truly seen a qualified solution from others in this space, comparing Motoroso to previous exits and acquisitions is difficult. I believe there are a lot of major companies that would significantly benefit from the success of a company like Motoroso. Motoroso can potentially influence plenty of customers into making purchases of aftermarket auto parts. I could see this as an interesting acquisition candidate for a company like O’Reilly Auto Parts as a way to drive future revenue growth.

Recent Acquisitions in the Field

Date

Company Acquired Acquired By Amount
July 31, 2015 Polyvore Yahoo $230M
Sept. 5, 2012 Source Interlink Car Domain $50M
April 9, 2012 Instagram Facebook $1.01B

Expert Opinion Summary

Motoroso has put together an intriguing offering at a $5M valuation cap with a 20% discount. Given the traction and limited revenue, I would be more confident if the valuation cap was $4M with the 20% discount, but the current offering is certainly worth consideration. With Alex being a solo founder that certainly raises concerns without having additional team members that have an equity interest. Alex proved himself to Techstars, which rarely accepts solo founders, but I would like to see a plan for growing the team. Scaling a project is challenging with the support of a team and doing it alone can easily become overwhelming. The fact that Motoroso was able to secure a partnership with Ford instills confidence that good things are still to come for this startup.

AngelList: https://angel.co/motoroso
Crunchbase: https://www.crunchbase.com/organization/motoroso#/entity

Disclaimer

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.

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Jake Fisher
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Jake Fisher

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