Mass Production Building System

Analytics

Raised to Date: Raised: $4,996,579

Aggregate Commitments $

Platform

StartEngine

Start Date

05/04/2021

Close Date

11/13/2021

Min. Goal

$10,000

Max. Goal

$5,000,000

Min. Investment

$500

Security Type

Equity - Preferred

Funding Type

RegCF

Series

Seed

Price Per Share

$0.71

Pre-Money Valuation

$226,249,347

Rolling Commitments $

Status
Funded
Reporting Date

11/30/2021

Days Remaining
Funded
% of Min. Goal

49,968%

% of Max. Goal

100%

Likelihood of Max
Funded
Avg. Daily Raise

$25,889

# of Investors

2,645

Momentum
Funded
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Location

Las Vegas, Nevada

Industry

Real Estate & Construction

Tech Sector

Proptech

Distribution Model

B2B/B2C

Margin

Medium

Capital Intensity

High

Business Type

Growth

Boxabl, with a pre-money valuation of $226.2 million, is raising funds on StartEngine. The company makes building modules that can be easily shipped, factory-manufactured, and engineered for custom configurations. The building system of Boxabl is compatible with factory mass production and lowers the homeownership cost for people. Paolo Tiramani and Galiano Tiramani founded Boxabl in 2017. The current crowdfunding campaign has a minimum goal of $9,999.64 and a maximum goal of $3,929,999.81, and the funds will be used to scale worldwide with its partner factory model. Boxabl has over 20,000 reservations for its product and has 2,000 paid deposits. The company currently has over 17 patent filings and is launching a factory to produce its shippable homes.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$90,000

$60,000

COGS

$90,000

$60,000

Tax

$0

$0

 

 

Net Income

$-1,162,792

$-707,547

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$3,676,341

$115,980

Accounts Receivable

$0

$0

Total Assets

$3,803,179

$209,989

Short-Term Debt

$3,441,068

$209,272

Long-Term Debt

$167,700

$0

Total Liabilities

$3,608,768

$209,272

Financials as of: 05/04/2021
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Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
Boxabl 09/23/2023 Dalmore Group $3,359,267,620 $63,623,094 Equity - Preferred Active RegA+
Boxabl 02/20/2023 StartEngine $3,359,267,620 $4,921,325 Equity - Preferred Active RegCF
Boxabl 08/25/2022 StartEngine $3,000,000,000 $24,985,421 Equity - Preferred Funded RegA+
Boxabl 08/25/2022 Republic $3,000,000,000 $1,167,623 Equity - Preferred Funded RegA+
Boxabl 11/13/2021 StartEngine $226,249,347 $4,996,579 Equity - Preferred Funded RegCF
Boxabl 04/30/2021 Wefunder $42,000,000 $3,225,149 Equity - Preferred Funded RegCF / RegD 506(c)
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Ratings KingsCrowd Startup Rating Methodology Article

Analyst Report Analyst Report Methodology Article

Synopsis

America is facing its second housing crisis in as many decades as millennials are reaching the prime age to invest in permanent homes. Recent underbuilding, supply and worker shortages, and other aspects of the COVID-19 pandemic have left the housing market with its lowest supply since the 1970s. While such a shortfall theoretically offers opportunities for markets to adapt to meet demand, industry experts expect the shortage to last for years.

Even without the housing shortage, home buying has always been the most expensive investment most middle-class families make. Today, the average new home in the United States will sell for around $389,400 in 2020, almost twice the average price of two decades ago. This isn’t just a case of consumers wanting bigger houses, either. Rising land, labor, and regulatory costs, industry scarring from the Great Recession, and simple increased demand are driving housing prices to daunting heights. As the costs of building housing continue to rise, builders naturally charge more, passing the increased price onto the home-buyer. 

What if instead of paying more for a traditional team of on-site builders to assemble a living space piece-by-piece, builders could construct homes in cheaper and more efficient ways? What if one company could employ technological innovations and American ingenuity to bring the industrial process that has transformed so much of the globalist market to homebuilding?

Boxabl is answering these questions with customizable, factory-assembled home modules that can be shipped to a location, unpacked, and made ready for human habitation in less than a day. The company is beginning with Accessory Dwelling Units (ACUs), small units that are popularly used as tiny homes or detached guest suites. Through a partnership with Volkswagen, Boxabl plans to use funds from this raise to create its first-of-a-kind factory and begin pumping out homes to meet the demands of public and private consumers. In addition to being cheaper than conventionally-built homes, the company claims these units will be sturdier and more sustainable than existing homes as well — a boon for the environmentally-conscious millennial generation.

Boxabl’s current StartEngine raise has been rated a Neutral Deal by the KingsCrowd investment team.

Price

Boxable is raising funds by offering preferred equity for $0.71 per share at a pre-money valuation of $226,259,347. This is an extremely high valuation for any startup, even one expecting to reach the industrial scale Boxabl aspires to. However, the company has generated significant interest, including 2,000 paid deposits. Multiplying these deposits by a price tag of $50,000 per house comes out to an eventual $100 million in revenue, which helps to justify Boxabl’s valuation. This is quite different from having $100 million in actual, concrete revenue, however, so Boxabl receives a poor price rating.

Market

While Boxabl does plan to eventually reach markets across the world through partnership programs, it must prove its business model a success in the US first through its accessory dwelling unit (ACU) Casita product. The US had 128.45 million households in 2020, a slight decrease from 2019. Multiplying the total number of households by the Casita price of $50,000 results in a potential market of $6.4 trillion. It should be noted that California, the location of Boxabl’s first factory, holds the nation’s largest housing market with more than a fifth of the total housing value in the US. However, the housing market is expected to grow quite slowly, and there are many established competitors which Boxabl will be facing off against. There is very little chance that Boxabl will secure the entire housing market, so the company’s actual addressable market will be somewhat smaller than $6.4 trillion. That still leaves plenty of room for growth and expansion, though. Thus, the market score for Boxable is strong.

Team

Boxabl is led by a pair of founders with complementary and significant experience in the startup arena. CEO Paolo Tiramani is also CEO and founder of 500 Group Inc., an intellectual property, investment, and development firm that holds Boxabl under its umbrella. Paolo has served with 500 Group for the past three decades, generating significant revenue through corporate licensing and sales. During that time, he has accumulated 155 patent filings (60 active patents across the US and Europe) in mechanical engineering and industrial design. Paolo’s other current interest under 500 Group is Supercar System, a startup automaker planning to bring affordable supercars to market.

Paolo Tiramani’s partner in this venture is co-founder and Director Galiano Tiramani, an entrepreneur in cryptocurrency and ATMs through his previous startup, CoinHub. CoinHub isn’t a cryptocurrency producer. It enables users to navigate the complex realm of cryptocurrency trade and manage their portfolios. Galiano holds a Bachelor of Business Administration in international business from Sacred Heart University.

COO Greg Ehlers is a former Wall Street executive, who holds an MDR (law degree) from Pepperdine Caruso Law. Ehlers has experience building businesses across a number of investment banks, including UBS Investment Bank, and his financial experience is a useful asset to a startup tackling a truly enormous challenge.

While the team’s varied experiences complement each other, there is a notable lack of experience in the manufacturing industry among the management-level executive team. However, Boxabl’s team score is still above average in reflection of its co-founders’ extensive entrepreneurial experience.

Differentiators

At least in its initial offerings, Boxabl is emerging into the trendy “tiny home” market as well as existing backyard and foldable homes markets. Compared to existing offerings, Boxabl’s most significant differentiation is its price marker. Competitor BluHomes offers its accessory dwelling unit (ACU), the Cabana 600, starting at $195,000. Boxabl’s Casita comes in at a fourth of that price despite being more than half the size. The company’s manufacturing process is also protected through a network of 17 patents. While competition across these markets is significant, the market is not overly crowded, and there is definitely room for growth.

One of Boxabl’s biggest advantages is its scalable factory model, which could enable it to scale up for larger offerings as it grows and eventually license its model to partner startups. Designing a factory system from the ground up is not an easy feat, which further strengthens the defensive moat which Boxabl has developed for itself. Due to its competitive price point, multiple patents, and unique factory approach, the differentiators score for Boxabl is its highest across all five metrics.

Performance

Boxabl is still in the pre-profit stage. It has taken 2,000 paid deposits for Casita units which could translate to huge revenue down the line. These deposits contribute to $60,000 in 2019 revenue and $90,000 in 2020 revenue. The company has established significant traction among consumers, securing 20,000 product reservations. The federal government has also ordered 156 homes, although the nature of these contracts is unclear. In prior fundraising, including through Wefunder, Boxabl raised nearly $6 million. Thus far, Boxabl seems to have executed well with the capital it’s received, and it has begun to see revenue. Therefore, it scores highly in the performance metric. 

Risks

For the purposes of this raise, Boxabl’s most notable risks are of a financial nature. At Boxabl’s ambitious valuation, the company will need to perform very well for investors to see significant returns on these terms. Such returns are unlikely to occur for several years, during which the housing market is likely to remain in flux. There is a risk that home buyers might prefer to spend a little more for significantly larger houses rather than save on tiny Casita units. Tiny homes are increasingly popular but not overwhelmingly so.

In the short term, Boxabl’s traction and ambitious roadmap have come with a hefty price tag. The company holds more than $3.4 million in short-term debt. As significant profits are likely years down the road, Boxabl will need to continue raising funds at a rapid rate to support its growth. The company could conceivably fold if its early traction does not lead to further consumer engagement that justifies the massive up-front investment of the factory model. In addition to these risks, the market itself presents significant obstacles. Lumber prices remain very high, regulation is at its highest levels ever, and scaling the product at a level necessary to lower and recoup costs is a significant challenge.

Bearish Outlook

Looking at an investment in Boxabl, the biggest question yet to be answered is about its home assembly model. While a huge competitive advantage over existing home manufacturers, the process has yet to be tested. The factory hasn’t been built yet. It is not unusual for startups to be premised on unproven concepts. In this case, however, a lack of manufacturing experience among senior leadership gives some reason to doubt the model’s execution. In addition — given the startup’s significant risk — some reflection of that risk should be expected in the pre-money valuation but does not seem to be there.

Bullish Outlook

While its process is unproven and returns for investors are years away, Boxabl has the potential to entirely disrupt the housing construction market. Factory assembly could be a game-changer for an industry that has for years remained steadily reliant on onsite human workers. Assuming the production process works as expected, Boxabl could use its early traction and high levels of interest in affordable housing options to grow to one of the alternative housing market’s most prominent players. It might even lower the price of available housing for the majority of consumers.

Executive Summary

Boxabl is committed to lowering the cost of home ownership for everyone. It plans to turn homebuilding from an onsite, worker-intensive slog to a factory-streamlined process. Modules are custom-assembled and shipped to their intended destinations, where they are easily and quickly “unpacked” and made ready for human habitation. Through factory mass production, costs are cut significantly, addressing national and global housing crises. Its first model, the Casita, has more than 20,000 reservations. Boxabl is launching its first factory to produce Casitas for its first client: the US federal government.

Boxabl is addressing an urgent housing market shortage with a cheaper product than its competitors and has extensively patent-protected its assembly process. However, that process has yet to be proven to work. At a huge pre-money valuation, investors will need to see absolutely massive traction to achieve reasonable returns. A lack of manufacturing experience in the leadership team also casts doubt on the model’s viability, and high short-term debts present significant financial risks. Despite challenges and questions about both supply and process, Boxabl’s model could disrupt the alternative housing market and make housing more affordable for all. With this in mind, Boxabl is a Neutral Deal.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to help@kingscrowd.com.

Analysis written by Benjamin Potts.

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Boxabl on StartEngine
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Platform: StartEngine
Security Type: Equity - Preferred
Valuation: $226,249,347
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