GoSun

Growth Stage

Use More Sun

Analytics

Raised to Date: Raised: $998,137

Aggregate Commitments $

Platform

StartEngine

Start Date

04/21/2021

Close Date

10/18/2021

Min. Goal

$10,000

Max. Goal

$3,930,000

Min. Investment

$250

Security Type

Equity - Preferred

Funding Type

RegCF

Series

Series A

Pre-Money Valuation

$59,891,925

Rolling Commitments $

Status

Active

Reporting Date

09/26/2021

Days Remaining

22

% of Min. Goal

9,981%

% of Max. Goal

25%

Likelihood of Max
unlikely
Avg. Daily Raise

$6,317

Momentum
warm
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Location

Cincinnati, Ohio

Industry

Consumer Products, Goods & Services

Tech Sector

Foodtech

Distribution Model

B2B/B2C

Margin

Medium

Capital Intensity

High

Business Type

Growth

GoSun, with a pre-money valuation of $59.1 million, is raising funds on StartEngine. The company uses solar technologies to create efficient products for cooking, cooling, lighting, and charging electronics using solar energy. The GoSun products support independence and non-reliance on non-renewable sources of energy, which helps to create a healthier and more sustainable environment. GoSun was founded by Patrick Sherwin in 2016. The proceeds of the current crowdfunding round, with a minimum raise of $10,000 and a maximum raise of $3,930,000, will be used for product expansion. GoSun has already sold more than 100,000 products in 70 countries and generated $3.9 million in revenues in 2020. The company has partnered with companies like Home Depot and Ace Hardware for recreational sales and with bodies like the UN and Red Cross for humanitarian sales.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$3,925,165

$1,869,934

COGS

$1,973,993

$1,020,785

Tax

$0

$0

 

 

Net Income

$2,783

$-251,950

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$1,233,581

$699,115

Accounts Receivable

$39,646

$101,997

Total Assets

$2,485,882

$1,415,124

Short-Term Debt

$841,927

$718,545

Long-Term Debt

$562,701

$485,142

Total Liabilities

$1,404,628

$1,203,687

Financials as of: 04/21/2021
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Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
GoSun 10/18/2021 StartEngine $59,891,925 $998,137 Equity - Preferred Active RegCF
GoSun 07/14/2020 StartEngine $14,029,817 $1,069,999 Equity - Common Funded RegCF
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Ratings

Analyst Report

Synopsis

Humans have always needed to create energy. Simple fires in the Stone Age evolved to coal-burning stoves and gasoline-powered machines. These days, many people think of energy as the electrical grid that sends power from massive generators to homes and businesses nationwide. In recent decades, the world has shifted its attention to the rapid adoption of clean power sources, including wind and solar. The Department of Energy reports that “solar power is more affordable, accessible, and prevalent in the United States than ever before.”

Increasingly innovative solar energy technologies capture more power from the sun each year, and they are still barely scratching the surface. The amount of solar power that strikes the Earth in a single hour is more than the entire world consumes in a year

Solar power has the potential to completely reinvent the way we power everything, from the biggest buildings down to the smallest appliances. GoSun is doing its part to integrate solar power into everyone’s day-to-day life. The company creates state-of-the-art solar powered devices — primarily for outdoor recreation — that harness energy from the sun and reduce dependence on wood, charcoal, generators, and the electrical grid. From solar-powered coffee presses all the way up to solar-powered tiny homes, GoSun is leveraging solar to shape a new era of sustainable energy. 

GoSun’s current StartEngine raise has been rated a Deal to Watch by the Kingscrowd investment team.

Price

GoSun is offering equity at a $59.9 million valuation. While GoSun is an attractive investment opportunity for many reasons, this price is not one of them. GoSun is undoubtedly successful with almost $4 million in revenue last year and narrow profitability. However, a 15 times revenue multiple is very high for this type of business, which can’t scale exponentially at fixed cost of goods sold like tech companies. GoSun’s portfolio of intellectual property (five patents and six trademarks) is certainly valuable but still doesn’t justify the nearly $60 million price tag. Consequently, GoSun’s price rating is one of its lowest.

Market

The solar energy market has significant potential, but it is still evolving. The entirety of the solar energy market was valued at $52.5 billion in 2018 and is growing at a rapid  20.5% CAGR, projected to be worth $223.3 billion by 2026. On its surface, that’s a lucrative opportunity for GoSun, but it’s important to recognize that GoSun is not playing in the main segment of that market, which is large-scale solar energy grids to power homes and businesses. 

Instead, GoSun is addressing the market for consumer appliances powered by solar energy. It’s much more difficult to value the total market across all of GoSun’s product lines, but it’s undoubtedly worth only a tiny fraction of larger solar potential. One of GoSun’s most established product lines is its solar ovens. The solar cooker market was valued at $1.8 billion in 2019 with a CAGR of 8.7% from 2020 through 2026.  Each of GoSun’s primary product verticals (ovens, coolers, chargers, lighting, and water purification) is worth an estimated $1 billion for a rough total addressable market of $5 billion. That estimate does not take into account GoSun’s future expansions into tiny homes, trailers, and RVs, which would add more market potential in the future. That said, GoSun’s obtainable market is much smaller, particularly given that these products are quite expensive and accessible to only a select few consumers. 

In sum, it’s difficult to precisely benchmark GoSun’s market potential. However, it’s clear that GoSun can capture relatively limited value right now, given niche demand and high cost of each of its product types. That’s why GoSun’s market rating is middle-of-the-road.

Team

GoSun is led by Patrick Sherwin, a solar engineer and entrepreneur with two decades of experience inventing solar products and bringing them to market. Sherwin graduated with a BS in environmental biology from Ohio University. He joined the clean energy industry almost immediately in the early 2000s and has witnessed the evolution of the space ever since. Over time, Sherwin held roles in business development, academic instruction, product design, and more for a wide variety of solar-focused companies. Notably, he was the co-founder and chief technology officer for Brightfield Transportation Solutions, a solar-enabled electric vehicle company, for four years. 

The GoSun executive team also includes Gary Starr, who has a similarly impressive background in both entrepreneurship and solar technology. Starr was the founder and CEO of Enova Systems for 14 years in the ‘80s and ‘90s, leading the company to become “the country’s leading distributor of solar electric systems and the largest manufacturer of electric cars, trucks, and buses” at that time. He has served in various co-founding, advising, and business development roles in the clean energy industry ever since. He seems to lend his expertise to GoSun part-time as he continues to participate in other solar projects. 

With 60 years of combined experience as CEOs and co-founders of solar-focused businesses, Sherwin and Starr are ideal leaders for a company in this industry. Arguably, the GoSun team could benefit from a key team member with deeper experience in consumer branding or marketing, given that GoSun’s ultimate goal is to become the household name in consumer solar. Nonetheless, the GoSun team is very deeply experienced and thus receives a high rating.

Differentiators

GoSun is one of the leading, if not the leading, manufacturers of consumer solar appliances. The company got its start with solar ovens and now offers various models. Those products are popular and often wind up on “best of” solar ovens lists. GoSun has launched several new product lines over the last eight years, including solar-powered coolers, charging banks, lighting devices, and water purification systems. Soon, the company plans to launch  a full tiny house powered by the sun. In each of these verticals, GoSun appears to be a market leader, with strong customer reviews and widespread distribution both online and in recreation stores nationwide. 

Thus, GoSun’s primary differentiator is its position as an established brand name in solar appliances. It helps that, because consumer solar isn’t very widespread yet, the company doesn’t face very strong competition from other brands. GoSun also has a large portfolio of intellectual property, with five patents and six trademarks across its various product verticals. Overall, GoSun’s track record and strong defensibility mean that its differentiation rating is as high as it gets.

Performance

In the last couple of years, GoSun has posted excellent financial performance. The company generated $1.87 million in revenue in 2019, already an impressive figure in a market that is still relatively niche and evolving. GoSun smashed that record in 2020 to bring in $3.93 million in revenue, over 100% year-over-year revenue growth despite the pandemic and small market. Even better, GoSun actually turned a small $2,800 profit in 2020, a very positive sign for the sustainability of the company’s business model. GoSun has also raised several rounds of funding. The company has leveraged that capital efficiently to fuel a healthy business (somewhat rare for high-tech product companies). 

On almost every performance metric, GoSun is leading the pack among crowdfunding investment opportunities. That’s why GoSun’s performance rating is the highest possible.

Risks

Despite many strong signals about GoSun’s potential, there are some risk factors that prospective investors should consider. Most notably, GoSun’s team is quite small, and only one of its deeply experienced executives is committed to the company full-time. The future of the company seems to rest on its founder and CEO with little backup from other team members. GoSun is also playing in a somewhat risky market. Very few consumers are using solar energy for small appliances at this point, and America is still a long way from widespread solar grid adoption. Financials and funding also carry some risks, given that GoSun’s technologically complex products require a good deal of capital to get off the ground.

Bearish Outlook

GoSun is generating impressive revenue with a large portfolio of products and great future potential for growth. But it has taken the company eight years to get to this point. GoSun was not an overnight success (though to be fair, these products require intensive, time-consuming development). Second, GoSun is primarily led by a single founder. Deeply experienced as he may be, the team lacks additional expertise, at least from full-time employees. Lastly, and most importantly, GoSun is raising at a valuation that seems far too high. A 15 times revenue multiple on this type of business isn’t justifiable.

Bullish Outlook

GoSun has built an impressive reputation as a market leader in consumer solar appliances. Its products have won awards (including prestigious accolades from CES and Fast Company), been featured in TV shows like Top Chef, received strong reviews across the internet, and generally seem to be regarded as some of the best options for solar-powered ovens, coolers, and more. The proof is in the numbers. GoSun experienced more than 100% year-over-year revenue growth in 2020, almost hitting $4 million in revenue, and even turned a small profit. 

GoSun’s future prospects are very strong. The company has an exciting pipeline of new launches, including solar-powered tiny homes, trailers, and RVs, which could catapult the business into larger revenues and additional market verticals. The company also has decent exit opportunities. Perhaps the most viable pathway is an initial public offering, which the founding team is experienced in navigating, but acquisition by a strategic investor like a major consumer technology brand could also be an option. Overall, there are many positive signals that GoSun investors could reap big returns from this opportunity, even despite a high valuation.

Executive Summary

GoSun produces consumer solar appliances primarily designed to provide sustainable power for outdoor activities. Its line of solar-powered ovens, coolers, charging stations, water purification devices, and more are highly regarded by prestigious technology forums and customers alike. Even during the pandemic, and despite the niche nature of the solar energy market, GoSun was profitable with almost $4 million in revenue.  

GoSun is operated by a solo founder, and the solar energy market is still small and evolving to a degree that introduces some risk for the business. GoSun is also raising at a very high valuation — just shy of $60 million — which doesn’t quite seem justified at these levels of revenue. However, GoSun has a long track record of success, a large portfolio of intellectual property, and exciting future plans for new products. All of this success and growth potential makes GoSun a Deal to Watch. 

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

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