HelloWoofy

Smart Marketing for Underdogs (aka SMBs). Grew 21,900%, Rev $200,000+ !

Analytics

Raised to Date: Raised: $83,232

Aggregate Commitments $

Platform

Wefunder

Start Date

09/22/2021

Close Date

05/01/2022

Min. Goal

$50,000

Max. Goal

$2,000,000

Min. Investment

$100

Security Type

Convertible Note

Funding Type

RegCF

Series

Seed

Valuation Cap

$9,500,000

Discount Rate

15%

Rolling Commitments $

Status

Active

Reporting Date

12/05/2021

Days Remaining

147

% of Min. Goal

166%

% of Max. Goal

4%

Likelihood of Max
unlikely
Avg. Daily Raise

$1,125

Momentum
warm.svg
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Location

New York, New York

Industry

Marketing & Advertising

Tech Sector

MediaTech

Distribution Model

B2B

Margin

High

Capital Intensity

Low

Business Type

High Growth

HelloWoofy, with a valuation of $9.5 million, is raising funds on Wefunder. The technology at HelloWoofy uses artificial intelligence and data science to personalize social media marketing for users. The platform helps users manage different social media networks, organize their campaigns, and make their copywriting more efficient. HelloWoofy grew by 21,900% from its launch in under a year. Arjun Rai founded HelloWoofy in September 2016. The current crowdfunding campaign has a minimum target of $50,000 and a maximum target of $2,000,000. The campaign proceeds will be used for engineering, marketing, accounting expenses, operational expenses, and general working capital.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$132,987

$1,902

COGS

$0

$0

Tax

$450

$450

 

 

Net Income

$-424,366

$-248,051

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$110,512

$30,550

Accounts Receivable

$0

$0

Total Assets

$256,501

$30,550

Short-Term Debt

$724,764

$489,238

Long-Term Debt

$0

$75,000

Total Liabilities

$724,764

$564,238

Financials as of: 09/22/2021
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Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
HelloWoofy 05/01/2022 Wefunder $9,500,000 $83,232 Convertible Note Active RegCF
HelloWoofy 04/30/2021 Wefunder $9,500,000 $199,796 Convertible Note Funded RegCF
HelloWoofy 12/01/2020 Republic $9,000,000 $169,054 SAFE Funded RegCF
HelloWoofy 04/30/2020 Republic $5,000,000 $385,817 SAFE Funded RegCF
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Ratings KingsCrowd Startup Rating Methodology Article

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Synopsis

In a world dominated by large online retailers and savvy instagram influencers, it can be difficult for small- and medium-sized businesses to stand out on social media platforms. And the fact that every social media site seems to have a different tone and demographic only compounds the problem. As a result, business owners may spend hours developing and managing multiple marketing campaigns on various social media platforms and feel completely overwhelmed. 

HelloWoofy, a smart marketing tool that manages social media, eliminates the hassle and stress of social media marketing. The service empowers small- and medium-sized business owners to take control of their social media presence. HelloWoofy users can create and schedule optimized social media content such as blog posts and videos. They can access a content library with trending topics, royalty-free images and more. And they can also collaborate with other team members on their content. Unlike other social media management tools, HelloWoofy’s patent-pending technology is data-driven to optimize efficiency and results. 

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

Price

HelloWoofy is currently offering a convertible note at a $9.5 million valuation cap with a 15% discount. This valuation hasn’t increased since the company’s last round, which is reasonable given its overall slow traction. But HelloWoofy generated more than $130,000 in revenue in 2020, which is a drastic increase over 2019’s revenue. And the 15% discount further sweetens the deal for investors. Overall, the company has a fair valuation and receives an above-average price rating.

Market

HelloWoofy operates in the diverse and growing social media advertising market. In 2020, more than $40 billion was spent on paid advertising on various social networks. And this spending will likely increase, as an estimated 90% of US companies will be using social media for marketing purposes in the future. 

But overall, HelloWoofy’s addressable market is limited given its niche in serving small- and medium-sized businesses. In 2021, the social media advertising market for small- and medium-sized businesses is estimated to be $2 billion, which is a small market compared to the entire social media advertising market. US social media advertising for this market is expected to grow by an average of 7.6% per year. Overall, the small market niche gives HelloWoofy a below-average market rating.

Team

HelloWoofy CEO Arjun Rai founded the company in 2016. Rai has an extensive background in data, smart marketing, and technology as a serial entrepreneur. He founded four other companies, two of which are data-focused and part of HelloWoofy and one of which was a social media agency. His experience is critical for both expanding HelloWoofy’s product offerings and leading brand adoption. Rai is well-versed in startups through his education at the New York Institute of Technology and Draper University. 

The rest of the HelloWoofy team is 15 people strong. It is composed of data scientists, engineers, marketing experts, designers, and content creators. The team boasts complementary skill sets and diverse backgrounds. Diversity is often a sign of the positive culture that a company needs for growth. Overall, HelloWoofy has a very high team rating.

Differentiators

The market for small- and medium-sized social media advertising assistance is crowded, and it can be difficult to determine the precise factors that distinguish one service from another. Generally, HelloWoofy focuses on convenience and technological insight.  

HelloWoofy’s most obvious competitors are scheduling assistant platforms like CoSchedule, Airtable, Planable, and Post Planner. HelloWoofy is more user-friendly, customizable, and technologically advanced than its competition. HelloWoofy allows businesses to schedule posts in advance across multiple platforms, as its competitors do. But it also offers a content library of top trending topics, articles, royalty-free images, and blogs for inspiration when users are creating content. Competitors might tackle scheduling, but they don’t cut down on the countless hours spent thinking of the right content to post. HelloWoofy has patent-pending technology that allows customers to autocomplete posts with not only words but also emojis and hashtags in real time. HelloWoofy also allows businesses to add multiple team members to collaborate on a post and link up to 100 social media platforms. Finally, its supportive Facebook community of small- and medium-sized businesses navigating digital marketing efforts helps the company stand out from its competitors. 

HelloWoofy’s price point is also flexible and makes it more appealing than other scheduling platforms. At $49 per year (its cheapest tier), it is much cheaper than other solutions like Keap offering packages for $199 per month. Compared to other digital marketing tools, HelloWoofy appears to offer more features and better functionality for a lower subscription fee. But investors should keep in mind that HelloWoofy’s advantages are not necessarily defensible, as competitors could lower their prices or add more features to compete with HelloWoofy. Overall, HelloWoofy receives an above-average differentiator rating.

Performance

HelloWoofy boasts improved performance since its last raise. First, its revenue increased by nearly 70 times from $1,902 in 2019 to $132,987 in 2020. While its 2020 revenue is not overly impressive, such drastic growth is a positive indicator for HelloWoofy’s future in the small- and medium-sized business marketing sector. The company’s monthly burn rate is relatively low, which is a direct result of running a lean team. With prior fundraising of more than $1.3 million, HelloWoofy is able to move quickly and expand more rapidly than other startups in this space. 

HelloWoofy also benefits from strategic partnerships with players like Amazon. Businesses will be able to reach customers through Amazon Alexa while benefiting from HelloWoofy’s social media guidance. HelloWoofy is also fully integrated with Hootsuite, one of the largest social media management platforms in the industry. Overall, HelloWoofy receives a high performance rating.

Risks

HelloWoofy’s risk level is moderate. The company has a time risk due to the nature of its sales cycle. The company uses a business-to-business (B2B) model, offering its platform to small- and medium-sized businesses on a subscription basis. B2B transactions often take longer to complete than direct sales. As a result, it could take HelloWoofy a long time to acquire new customers as it scales and expands. 

HelloWoofy was founded in 2016, but it has only recently gained financial traction. Being in the technology and marketing space, this raises questions about future financial growth. HelloWoofy is currently in a pre-profit phase and will need to scale its product offering quickly to ensure future profitability and financial growth for investors.

Bearish Outlook

HelloWoofy’s biggest concern is defensibility and traction. It operates in a crowded market. The company has patent-pending technology, but this may not guarantee its defensibility when its service is already similar to competitors’. To avoid being one of many, HelloWoofy will need to further differentiate itself moving forward. 

Concerning financial traction, the company has little revenue to date and has experienced slow growth since its previous raise. Despite the company’s claims that it experienced 21,900% growth, there is no user or other traction statistics to support this. Further, possible partnerships have the potential to fall through or be less fruitful than the HelloWoofy team is anticipating. If HelloWoofy’s price point increases or competitors offer significantly cheaper options, the company could lose its competitive price point.

Bullish Outlook

HelloWoofy is gaining financial traction, continuously onboarding more companies, and diversifying its offerings. The company’s projected revenue is $320,000 this year. It secured $130,000 from lead investor Tim Draper and has already raised more than $1.3 million in funding. 

HelloWoofy’s team is driven, experienced, and growing. The education and past entrepreneurial experiences of its founder is a positive indicator of future success. 

The competition in the social media marketing space is fierce, but it is not a winner-take-all industry. Additionally, the market for small- and medium-sized business social media marketing has many niches for HelloWoofy to expand into with its growing customer base. The company’s highly affordable price range makes it more competitive and appealing to new businesses looking to improve their marketing efforts.

Executive Summary

HelloWoofy is a software-as-a-service company providing digital marketing assistance to small- and medium-sized businesses. HelloWoofy saw tremendous revenue growth from 2019 to 2020 and has a growing customer base. It has goals to secure additional partnerships and product offerings. Its CEO is an experienced entrepreneur who has built out a comprehensive team of engineers and designers to support the growing company. All things considered, the current raise’s valuation is a fair deal for investors.

Despite this growth, there are some concerns for investors. Although HelloWoofy has patent-pending technology and boasts more features than its competitors, it still has defensibility concerns because it offers similar services to competitors. And operating within such a crowded market with limited financial traction leaves HelloWoofy particularly vulnerable. Therefore, HelloWoofy has been rated a Neutral deal by the KingsCrowd investment team. 

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

Analysis written by Carolyn Price, October 18, 2021.

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HelloWoofy on Wefunder 2021
$
Platform: Wefunder
Security Type: Convertible Note
Valuation: $9,500,000
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