Flower Turbines

Growth Stage

Innovative Small Wind Turbines

Analytics

Raised to Date: Raised: $3,482,600

Aggregate Commitments $

Platform

StartEngine

Start Date

03/09/2021

Close Date

09/30/2021

Min. Goal

$560

Max. Goal

$14,490,000

Min. Investment

$560

Security Type

Equity - Common

Funding Type

RegA+

Series

Seed

Pre-Money Valuation

$61,700,000

Rolling Commitments $

Status

Active

Reporting Date

09/18/2021

Days Remaining

12

% of Min. Goal

621,893%

% of Max. Goal

24%

Likelihood of Max
unlikely
Avg. Daily Raise

$18,045

Momentum
cool
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Location

Lawrence, New York

Industry

Energy, Power, & Natural Resources

Tech Sector

Cleantech

Distribution Model

B2B/B2C

Margin

High

Capital Intensity

High

Business Type

High Growth

Flower Turbines, with a valuation of $61.7 million, is raising funds on StartEngine through Reg A+ crowdfunding. The company has created small wind turbines that are sleek, innovative, and efficient. The turbines of Flower Turbines also address the problems of turbulence and design and are disrupting the industry through the cluster effect of its turbines. Flower Turbines was founded by Dr. Daniel Farb in 2013. The current round of crowdfunding does not have a minimum target and a maximum target of $14,490,000. The funds will be used for marketing, engineering, R&D, manufacturing, public relations, patents and intellectual property, and general and administrative expenses. Flower Turbines has four granted patents, and its turbines increase productivity by 20-50% due to the cluster effect.

Balance Sheet

Cash and Cash Equivalents

$266,596

Investment Securities

$0

Total Investments

$0

Accounts and Notes Receivable

$0

Loans

$0

Property, Plant and Equipment (PP&E)

$2,154

Property and Equipment

$0

Total Assets

$386,381

Accounts Payable & Accrued Liabilities

$38,117

Policy Liabilities and Accruals

$0

Deposits

$0

Long Term Debt

$56,135

Total Liabilities

$94,252

Total Stockholders' Equity

$292,129

Total Liabilities and Equity

$386,381

Statement of Comprehensive Income Information

Total Revenues

$0

Total Interest Income

$0

Costs & Expenses Applicable to Rev

$545,547

Total Interest Expenses

$0

Depreciation and Amortization

$0

Net Income

$-530,157

Earnings Per Share - Basic

$-1

Earnings Per Share - Diluted

$-1

Auditor: Fruci & Associates II, PLLC
Financials as of: 03/09/2021
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Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
Flower Turbines 09/30/2021 StartEngine $61,700,000 $3,482,600 Equity - Common Active RegA+
Flower Turbines 02/25/2021 StartEngine $26,017,770 $1,032,120 Equity - Common Funded RegCF
Flower Turbines 11/30/2019 StartEngine $7,600,000 $1,069,804 Equity - Common Funded RegCF
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Analyst Report

Synopsis

The days of fossil fuels are numbered. Every year, alternative energy becomes cheaper, making fossil fuels less appealing. Perhaps in the distant future, the world will be entirely powered by solar, wind, geothermal, and other renewable resources. 

One company that has found itself at the forefront of this movement is Flower Turbines. The company’s technology addresses two major concerns in the wind turbine market. The first is the noise wind turbines are notorious for making. There has historically been a tradeoff between noise and efficiency that is inherent in the nature of these devices. The second is the issue of proximity. In short, when wind turbines are too closely together, the flow of air coming off of one can reduce the efficiency of another nearby. By having its own wind turbines shaped like a flower bud, Flower Turbines creates an aerodynamically efficient flow of wind. This reduces sound while causing airflow to become more powerful when other turbines like it are nearby.

In fact, these turbines can allegedly be between 20% and 50% more efficient in groups than on their own. They are also capable of generating power at a wind speed of about 1.2 meters per second, as opposed to the industry standard of about three meters per second. For the large variant of this device — which stands six meters tall — this translates to 30 watts of power being generated by the time its competitors begin moving. Flower Turbines also has two other sizes of its device — the smallest version  is just one meter tall while the residential model stands at 2.8 meters.

In addition, Flower Turbines is working on a line of on- and off-grid e-bike charging stations. Some can even be compatible with the company’s wind turbines, but that is not a requirement in order for them to operate. Combined, the company has at least seven patents to its name as well as multiple trademarks and copyrights.

Flower Turbines’ current StartEngine raise has been rated a Deal to Watch by the KingsCrowd investment team.

Price

Flower Turbines has set its valuation for this round at $61.7 million. This is more than double the $26.02 million pre-money valuation the company asked for in its last round of funding, making it quite high. Additionally, the company has only generated a small amount of revenue to date. Overall, Flower Turbines’ valuation seems unfavorable in this round.

Market

The market opportunity for wind turbine companies — particularly those that are cutting edge — is significant. According to one source, the demand for wind power is projected to grow at a rate of 5.2% per annum from 2019 to 2027. This would result in the amount of power produced from this technology growing from 58.9 gigawatts to 88.4 gigawatts during this time frame. As demand grows, so should the revenue in the space. According to one source, the global market for wind turbines was worth $81.1 billion in 2016. Growing at a rate of 7.2% annually, this should eventually climb to $134.6 billion by 2023. A second source pegged the market size at $90.1 billion in 2019. If the industry grows at a rate of 5.34% per annum, that would take the market potential to $123.2 billion by 2025.

There are many niches in the overall wind turbine space, such as the small wind market. This industry was estimated to be worth just $166.6 million this year. By 2025, it should rise to $316.7 million, implying an annualized growth rate of 17.4%. A second source was far more optimistic about the size of this niche, estimating the niche was worth $3.81 billion in 2015. If forecasts are correct, it should grow to $8.87 billion by 2022, implying an annualized growth grade of 13.2%. Additionally, the side market opportunity for Flower Turbines’ charging stations should not be understated. Current forecasts place this at $3.8 billion for 2020. With an annualized growth rate of 36.3%, it is expected to rise to $45.3 billion by the end of 2028.

Overall, Flower Turbines is targeting a strong and growing market, giving the company plenty of room to establish itself.

Team

The team working on Flower Turbines is rather extensive, but there really is only one key figure at the company, founder and CEO Daniel Farb. At present, he is also the CEO of another company called Iocure. Iocure is an early-stage pharmaceutical startup with a focus on developing, manufacturing, and launching a low-risk COVID-19 therapy. In addition, Farb is also presently the CEO of Leviathan Energy. Like Flower Turbines, it’s an alternative energy business focused on innovation in wind, hydro, wave, and tidal power. Previously, he was the CEO of UniversityOfHealthCare, which focused on providing quality management and healthcare titles to its users. Before that, he worked for years as a patent consultant. His educational experience includes the University of California at Los Angeles, Yale, and the Boston University School of Medicine.

Farb brings ample entrepreneurial experience as well as some industry expertise. His knowledge of patents is also likely to be a boon to Flower Turbines. Overall, Farb is a strong founder for this company.

Differentiators

What makes Flower Turbines’ main products so different is their aerodynamic design. This patented technology allows the company to produce more wind power at a lower speed and in ways that solved two of the biggest problems in the wind turbine market, noise and inefficiency in groups. It is far from the only wind turbine company, but with its patents, it is clearly distinguished from other players on the market today. Flower Turbines has already acquired quite a bit of recognition. To name just a few examples, the company won the 2019 Energy Award in the Netherlands, was among the winners of the US-China Innovation Forum contest, and was deemed one of the top 45 inventions in Israel’s history.

Performance

When it comes to performance, the picture for Flower Turbines is rather mixed. Operationally, the company appears to be doing well. It has multiple products it is working on, and that can lead to multiple revenue streams. The company received an innovation loan from Rabobank, has set up a supply chain near its entry into the European Union, and has its own small wind tunnel and research facility in Rotterdam. 

However, the business has struggled on the financial side. In the first half of 2019, the company generated nothing in the way of revenue. Its net loss for that timeframe was $163,378, and it saw a net operating cash outflow of $153,333. In the first half of 2020, which is the most recent time period for which the business has any figures, revenue was just $105,747. During that period, the company generated a net loss of $355,443, and its net operating cash outflows totaled $470,758. This performance leaves a lot to be desired, particularly for a company asking investors to accept such a high valuation.

Bearish Outlook

The fact that Flower Turbines is generating very little revenue is definitely a concern. This is especially the case when considering the high valuation. Another issue is the fact that the company basically revolves around one key person. On top of that, this key person is also the CEO of two other businesses. With his attention split across so many businesses, it’s unclear if Farb can properly dedicate the time needed to build Flower Turbines into a successful company. It is also known that the wind turbine market, while large, is not known for being a high-margin space. This could result in subpar returns even as the business grows its sales.

Bullish Outlook

There is no doubt that Flower Turbines has already managed impressive feats for such a young company. It has multiple patents under its belt as well as several awards, and its technology addresses two major concerns within the wind turbine industry. The market opportunity for the company is significant in size, and its charging business operates in a rapidly growing industry. If everything works in the company’s favor, Flower Turbines could very well revolutionize wind power.

Executive Summary

Placing all of the pieces together, Flower Turbines appears to show a great deal of promise. The company offers solutions to the infamous noise problem of wind turbines and the inefficiency of grouping them together. It has received significant recognition on top of its patents, and the business operates in a growing market. The company is also currently generating at least some revenue. On the other hand, its current valuation is quite high, and the CEO’s questionable dedication is an object of concern. In all, our team believes that the positive does outweigh the negative. Because of that, Flower Turbines is a Deal to Watch at this time. 

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

Analysis written by Daniel Jones.

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