Brik + Clik is raising through sale of SAFE notes with a valuation cap of $12 million. Given its $27,910 in revenue in 2020, the company yields a revenue-to-valuation multiple of 430x. This revenue multiple is very high compared to other more established retail distribution companies. Walmart has a revenue multiple of 0.8x and Amazon has a revenue multiple of 4.4x as of this writing. Brik + Clik’s valuation is also significantly higher than those of other growth-stage retail distribution startups.

Brik + Clik claims to have grossed $410,000 within its first 13 months of operation. Taking this value as its regularly achievable revenue, that would reduce the company’s revenue multiple to 29x, which is still above the industry average. 

Brik + Clik operates in various sectors of retail distribution, as it maintains physical storefronts, online commerce, and virtual reality stores, encompassing independent and direct-to-consumer retailers in the US online retail market. The entire US retail e-commerce market is valued at $469.2 billion in 2021 with a compound annual growth rate (CAGR) of 8.7%, which is about average. The retail market is massive, and capturing just a small percentage of this market would prove to be extremely beneficial for the company’s revenue.

There’s a lot of excitement around the integration of virtual reality (VR) and blockchain in the retail industry, as the virtual and augmented reality retail market is projected to reach $17.9 billion by 2028 and is expected to grow at a staggering CAGR of 24.8% between 2021 and 2028. North America captured 42.4% of this market in 2020. 

Overall, there is great potential for Brik + Clik to maintain a share of this ever-growing market. Although this space is extremely saturated, customer brand awareness and loyalty, the expansion of the company’s physical stores, and the demand for VR integration are all factors that contribute to Brik + Clik’s market growth.

Brik + Clik co-founder and CEO Hemant Chavan has a little more than a year of experience in the retail industry. Prior to starting Brik + Clik, he worked more than 12 years in the real estate industry, managing portfolios worth around $4 billion. He graduated from the University of Mumbai with a bachelor’s degree in civil engineering and later received his master’s degree in the same field from The University of Illinois at Urbana-Champaign. Although his lack of retail experience might make investors hesitant, his extensive knowledge in managing real estate, sourcing, and deal structuring may prove to be beneficial for Brik + Clik’s retail distribution efforts.

Co-founder and COO Eric Hirani graduated from Columbia University with a degree in civil engineering as well. Like Chavan, Hirani also lacks experience in the retail industry, with Brik + Clik being his first retail endeavor. In addition to his Brik + Clik role, he is also the president of Infinite Consulting Corp. Although Hirani attended a prestigious school, his lack of both experience and dedication to the company may be a concern for investors. Furthermore, the team is lean, as it only consists of the co-founders. This gives the team a less diverse skill set, and it means the company relies heavily on the two co-founders rather than spreading the workload out. Brik + Clik will need to expand its team in order to grow the company significantly.

Brik + Clik is an intersection of physical, digital, and virtual retail. Not only does it provide stores for an in-person shopping experience, it also offers online shopping and virtual reality (VR) stores. These features remove the cost of commercial leasing and increase accessibility to customers, in turn satisfying more demands in the market. The company’s software integration for marketing and consumer behavior provides valuable data to the retailers using Brik + Clik’s distribution channels. 

Brik + Clik is a very efficient startup, as it developed a method of scalability to eliminate build-out costs, construction time, fixed rent, and staff costs and management. Brik + Clik’s additional subscription model provides customers access to a membership experience, creating a community-based culture around the company. It has live events, livestreamed shopping, influencer interactions and sponsorships. This allows the company to create an advanced technology-based retail store experience and provides an additional revenue stream for the company.

Brik + Clik has competitors, but they aren’t as distinguished or versatile. Many competitors are single-brand, individual virtual VR stores. Companies such as Obsess allow for individual brands and retailers to create their own VR stores, resembling the business model of Shopify. In contrast, Brik + Clik aims to be a retail distribution chain, with physical stores already opened in San Francisco and New York. 

Investors should note that Brik + Clik’s business model, while efficient, could easily be replicated by competitors. But overall, the company is highly differentiated and in a good position to grow through its innovative approach.

Brik + Clik claims it has generated $410,000 since its founding in October 2020, reflecting a continual growth in the company’s expansion and development. It experienced 163% month-over-month growth from September to November 2021, reflecting strong traction and increasing consumer awareness. (Though investors should note that these financials are unaudited.) Another point in Brik + Clik’s favor is that co-founders Hemant Chavan and Eric Hirani invested $90,000 of their own money in the company, as they have raised only $10,000 in additional capital. This indicates that the founders are dedicated to making the company succeed and have managed to stretch their dollars to help the company grow. Both are good signs for investors.

Currently, the company has two in-person stores — one in New York City and another in San Francisco. The New York location reportedly gets up to 40,000 in daily foot traffic. Brik + Clik seems to be keeping its upward momentum, as the company expects to open five stores in 2022 and expand its shop-in-shop partnerships in 2022. Its scalability model reflects strong potential to increase annual revenue and maximize potential. The company has already been featured in Forbes, The New York Times, and more. With Brik + Clik’s increasing growth, ability to scale, and great efficiency, its next goal to expand retail distribution channels is an ideal strategy to maintain its trajectory for long-term success.

In general, Brik + Clik is a relatively low-risk investment opportunity. The company has moderate team risk, as the founders don’t have much experience in retail distribution, but they attended credible universities and have prior experience managing large portfolios of real estate. The company also has some financial risk, as it isn’t yet profitable, according to its audited financials. On the other hand, Brik + Clik’s debts are very low compared to its assets. This year’s upcoming audited financials will likely reflect profitability.

Lastly, the company’s main risk is its defensibility. Although its business model is new in the retail industry, it can be easily replicated. This presents a problem with maintaining a competitive edge against other potential competitors down the road.

Brik + Clik’s success depends on its ability to remain competitive despite its lack of defensibility. Although it seems to have a first mover’s advantage, it’s unclear how it will maintain this competitive edge in the long run. Because of its easily replicable business model, Brik + Clik will need to create a better system of defense against the competition in order to maintain momentum. 

The company’s lack of cash on hand forces the company to remain lean, as it needs to maintain a low cash burn rate. The co-founders’ lack of retail distribution experience may also prove challenging, as they may not know how to pivot quickly during obstacles that may arise in the future.

Brik + Clik has shown a strong performance thus far, with increasing month-over-month returns, strong endorsements and institutional partnerships, and strong traction from consumers. The company has been growing at a relatively fast pace since its founding. Its strategic business model seems to be innovative and efficient, as the company projects to open more than double the amount of stores in 2022 that it did in 2021. 

Although the COVID-19 pandemic has hurt most brick and mortar retail businesses, Brik + Clik has managed to maneuver around these obstacles and maintain a strong foothold in the retail market. Its social presence has crafted an excited and loyal customer base, which is vital to the strength and growth rate of the company. In turn, this helps it stand out in the competitive market.

Brik + Clik provides an intersectional experience of in-store shopping, e-commerce, and virtual reality. Through the power of virtual reality, Brik + Clik’s online customers can simulate an in-person shopping experience from anywhere. Brik + Clik’s flexible retail model allows for livestream shopping, virtual appointments, events and more. Brik + Clik has stores in San Francisco and New York and is currently working on its LA location, with five more coming in 2022. Despite the pandemic, Brik + Clik’s traction, customer brand awareness, and continued performance have all been great indicators that the company could succeed and obtain a substantial market share within the retail industry. The market is huge, and Brik + Clik’s innovative business model helps it stand out among its competitors. 

But while Brik + Clik’s business model is innovative, it is not difficult to replicate. So  maintaining its competitive advantage will prove challenging in the years to come. Brik + Clik’s co-founders also have limited retail experience, which is concerning as the company doesn’t have much cash on hand to spare for errors. Because the team is so lean, its leadership has a less diverse skill set. Taking all these factors into consideration, Brik + Clik has been rated a Neutral Deal by the KingsCrowd investment team.

For questions regarding the KingsCrowd analyst report or ratings for this company, please reach out to support@kingscrowd.com.

Analysis written by Feven Solomon, November 29, 2021.