glassFROGG

Early Stage

Reduce medical costs by 90% using technology and data, not health insurance.

Analytics

Raised to Date: Raised: $192,884

Aggregate Commitments $

Platform

Wefunder

Start Date

07/06/2021

Close Date

11/05/2021

Min. Goal

$100,000

Max. Goal

$1,000,000

Min. Investment

$100

Security Type

Convertible Note

Funding Type

RegCF

Series

Seed

Valuation Cap

$6,000,000

Discount Rate

0%

Rolling Commitments $

Status

Active

Reporting Date

09/19/2021

Days Remaining

47

% of Min. Goal

193%

% of Max. Goal

19%

Likelihood of Max
unlikely
Avg. Daily Raise

$2,572

Momentum
cold
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Location

American Fork, Utah

Industry

Business Services, Software, & Applications

Tech Sector

MarketplaceTech

Distribution Model

B2B/B2C

Margin

High

Capital Intensity

Low

Business Type

High Growth

glassFROGG, with a $6 million valuation cap, is raising funds on Wefunder. The company has developed a digital platform that uses data and machine learning to help users save over 90% on medical care without health insurance. The platform allows employees to shop for affordable medical care, while the employers get to recruit and retain happy and healthy employees at a cost much lower than traditional insurance. Lucien Morin and Jake Fackrell founded glassFROGG in May 2017. The proceeds of the current crowdfunding round, with a minimum goal of $100,000 and a maximum goal of $1,000,000, will be used towards hiring a business development director, hiring additional sales team members, and developing of product enhancements. glassFROGG already has over 160 customers and over $370,000 in ARR.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$94,092

$5,472

COGS

$20,589

$330

Tax

$6,397

$13,216

 

 

Net Income

$-415,284

$-244,993

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$80,252

$15,721

Accounts Receivable

$0

$3,600

Total Assets

$123,316

$61,973

Short-Term Debt

$117,224

$56,533

Long-Term Debt

$57,535

$19,099

Total Liabilities

$174,759

$75,632

Financials as of: 07/06/2021
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Ratings

Analyst Report

Synopsis

It is estimated that nearly 18% of all US GDP goes toward healthcare expenditures. Not only is this expensive for individual Americans, but it’s also expensive for small businesses looking to provide insurance for their employees.

GlassFROGG wants to change that. The company has created an online service that allows users who prefer paying for healthcare services with cash — rather than through insurance — to receive price estimates for various medical procedures in their area. Pricing for procedures can vary significantly from provider to provider. By bypassing insurance providers, small businesses can get better rates for their employees.

GlassFROGG also provides telemedicine services, which allows a patient to talk directly to a doctor for no copay. Its Beta Health offering allows users to search for low-cost dental treatment. This search function also extends to prescriptions. Users can also upload their own medical bills and earn cash in exchange for adding to glassFROGG’s content library, allowing the platform to improve its accuracy. 

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

Price

GlassFROGG is raising at a $6 million valuation cap with no discount. This is a very reasonable valuation for a company at this stage that has begun to bring in some revenue. Given the traction the company has achieved up to this point, it received a high price score.

Market

GlassFROGG’s market size can be determined by its target customers. There are an estimated 30.1 million companies in the US that employ between zero and 19 employees. Among these, 24.8 million employ nobody other than their founders, and 5.3 million employ between one and 19 people. According to glassFROGG, 3.5 million of these businesses employ between one and four people. Given the pricing outlined by the company, full market saturation would work out to around $42.9 billion in revenue per annum. This is a sizable market and offers room for solid returns if even a portion is captured.

The health insurance market as a whole is growing at an annual rate of 6.6%. Though this is not the exact market for glassFROGG, it is a reasonable proxy. This growth rate is steady, but not noteworthy. When paired with the total addressable market of around $42.9 billion, glassFROGG’s market score is fairly high.

Team

The glassFROGG team is quite accomplished. At the helm of the company is co-founder and CEO Lucien Morin. Before starting the business, Morin co-founded and ran Black Tree Services, which provided payroll services to companies throughout the United States on a wholesale basis. Prior to that, he was the founder and president of Magellan, HCM, which provided employee benefits and payroll processing for hundreds of businesses in Utah. 

The other key person at glassFROGG is co-founder and COO Jake Fackrell. Previously, he was the founder and CEO of Domega, a data aggregation business. Before that, he served as an advisor at JUVE International, a 100% natural supplemental beverage. He also worked as an advisor for Axle Grab, a salvage car broker. Prior to that, Fackrell worked as a consultant at Marketecture, and his role before that was the founder, CEO, and president of Real Estate Data X-Change. 

GlassFROGG also has an accomplished CTO. Michael Jensen has served as the founder or co-founder of several businesses, including TOUT Clothing, BlueZone Labs, SoloSEO.com, CloudVine, LDS Scriptures, and more. The combined experiences of these individuals gave glassFROGG a strong overall team score. Apart from the founders, the team remains lean, with eight employees. If the company hopes to see continued growth, the founders will have to expand the team in the near future.

Differentiators

GlassFROGG faces some competition in the healthcare cost estimate space. FAIR Health and New Choice Health both allow users to estimate medical procedure costs. GlassFROGG’s differentiator is its focus on small businesses, which is an underserved market. But glassFROGG’s product isn’t patented and barriers to entry are relatively low, making for low overall defensibility. Overall, glassFROGG received a slightly above average differentiation score.

Performance

GlassFROGG has self-reported more than 3,700 registered users on its platform, and it has more than 150 revenue-generating customers. It currently operates in Utah, Texas, and Arizona. By the end of 2022, it hopes to expand across the US. 

In 2019, glassFROGG generated $5,472 in revenue. This increased to $94,092 in 2020. It is important to note that on its raise page, the company reported 2020 revenue of $186,641, so there is a discrepancy. If the figures that management is providing are accurate, then revenue in the first quarter of 2021 expanded to $98,625. That places it on a good trajectory for the full fiscal year. 

On the bottom line, the company is experiencing some losses. In 2019, it generated a net loss of $244,993. This loss ballooned to $415,284 in 2020. Meanwhile, the net operating cash outflow of the business grew from $233,621 to $308,211 over that same period of time. But because glassFROGG has delivered a product and is already bringing in revenue, it received a high performance score.

Risks

All things considered, glassFROGG’s risk profile is slightly below average compared to other startups at the same stage. There were only three categories of risk that were considered elevated. One of these was the market risk since this appears to be a crowded space, and glassFROGG’s main customer base is small companies that have limited budgets. Legal risk is also elevated due to the fact that the healthcare industry is heavily regulated and subject to legal scrutiny. The company is generating a small amount of revenue and appears to have large, growing net losses and operating cash outflows, which presents some financial risk. Product risk, however, is low seeing as the concept has been delivered and is actively bringing in revenue.

Bearish Outlook

Perhaps the biggest concern for glassFROGG is competition. Healthcare is a huge market, and the company is only marginally differentiated from competitors offering similar services. GlassFROGG’s solution would also be easy for competitors to replicate, and no patents currently protect its technology. Additionally, glassFROGG’s target market will probably be restricted to the US. Although the company’s risk profile is below average, there are still some legal concerns due to the highly regulated nature of healthcare. On the financial side, the losses and cash outflows also seem discouraging.

Bullish Outlook

GlassFROGG’s current valuation appears attractive. The company’s leaders also seem reliable and have extensive experience both founding and running businesses. Revenue growth has been impressive, especially if management’s claims about 2021’s first-quarter revenue being $98,625 are correct. In addition, the company caters to a specific section of the market that is highly underserviced. Finally, the company has a fully developed product that is bringing in revenue.

Executive Summary

GlassFROGG is a digital marketplace that allows small businesses to save more than 90% on medical care without health insurance. Its current valuation is favorable, and the team seems well-equipped to lead the company to success. Revenue growth also seems promising. And the company has a fully developed product that is already generating revenue.

Investors should also note that glassFROGG is operating in the healthcare market, which is both crowded and highly regulated. The company’s main point of differentiation is that it targets small businesses, but apart from that, it does not appear to stand out much among similar services. Investors should also consider that the company has had a high burn rate despite generating revenue. As such, KingsCrowd has rated glassFROGG a Neutral Deal.

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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