Joule Case has a pre-money valuation of $29.9 million. As of December 2020, this would make the company’s revenue-to-valuation multiple a steep 127x. However, Joule case increased its revenue in 2021 and even doubled its third quarter revenue compared to 2020. It also has signed promising letters of intent with music festivals worth a total of $100 million. Despite this progress, Joule Case’s valuation isn’t justified yet. Compared to other early-stage startups, such a valuation is far above the norm. Overall, Joule Case’s is overpriced in this funding round.

Joule Case operates within the portable generator market. This market includes gasoline, gas, battery, and solar generators. The global portable generator market was worth $5.04 billion in 2020. It is projected to grow at an annual rate of 6.03% in the next few years. But Joule Case only sells in the United States, and its market size is relatively low compared to other hardware companies. 

The portable generator market is dominated by generators using fossil fuels. Current aspirations to reduce emissions appear to be changing the shape of the portable generators market. Battery and solar-powered generators are beginning to emerge, and it seems like that battery-backed generators will become the norm in the next few years in California. Indeed, the Golden State will ban the sale of most gas-powered generators by 2028. This new law is expected to force stores and clients in California to turn to battery and solar powered generators.

The current and upcoming market regulations work in favor of Joule Case’s solution. The company mainly targets music festivals, a market expected to grow quickly in the next few years. The surge of camping in the United States during the pandemic has also been beneficial to the company. Therefore, losing business from music festivals during the pandemic isn’t a concern for Joule Case’s success in the portable generators market. 

Overall, even if the portable generator market is well established, the recent shift towards renewable energy sources offers Joule Case a favorable position in the market.

Joule Case was founded by company CEO James Wagoner and President Alex Livingston. They met in college while pursuing mechanical engineering degrees. In 2007, they started their first battery startup together, R2EV. R2EV didn’t survive the recession of 2010, but the founders started Joule Case a few years later with a new concept. Wagoner also worked for 10 years at Cintas as a regional field engineer. Livingston brings business development and strategy experience. Both founders have complementary skill sets, and their long experience together makes their team strong.

The Joule Case team is rounded out by additional upper level members. Pete Anewalt is the company’s COO. He has held executive positions in five companies that successfully exited. He has extensive experience in scaling operations and sales. Vice President of Engineering Dave de Muro is an electrical engineer who worked for more than 10 years at Apple, leading the development of battery modules.

Overall, Joule Case’s founding team has generous industry experience. With the addition of key team members, Joule Case looks primed to continue strong product development and operations.

Joule case’s product has a few advantages over competing generators. Its battery-powered generator is healthier, more environmentally friendly, and cheaper over time than gasoline competitors. But Joule Case competes most directly with various battery- and solar-powered electric generators. In this case, the company’s biggest advantages are its flexibility and its price. Joule Case products are stackable, thanks to its patented technology. Customers can extend their generator capacities by adding a module to their existing stack. This system reduces the cost, space, and wiring needed to traditionally extend generators capacity. 

For equivalent power capacities, Joule Case generator is cheaper than similar products sold by Tesla, Jackery, or Goal Zero. The company’s closest competitor is Titan, which offers similar stackability to Joule Case’s generator. Still, Joule Case has a competitive advantage, as it has a lower price, an arguably better design, and a larger diversity of products. Joule Case also sells affordable solar panels to directly charge the generator, enabling customers to easily embrace renewable energy. 

In comparison to current market offerings, Joule Case looks to have a well-differentiated product with a decent defensive moat.

Joule Case increased its revenue by 88% between 2019 and 2020 to reach $234,167. Despite the pandemic and the loss of contracts with music festivals, Joule Case has been able to temporarily pivot from music festivals and sell its entire stock to new customers. This twist allowed the company to extend its sales channels. 

Joule Case’s stackable generator required time and funding to be developed. The company has raised more than $2 million over its lifespan and had more than $2 million in debt as of 2020. While it demonstrates the company’s ability to raise capital and be trusted, such debt puts the company at financial risk. However, it has shown reassuring signs in 2021. Joule Case doubled its sales in the third quarter of 2021 compared to the previous year. Thanks to scaling, the company claims it has been able to achieve an 83% gross margin in 2021. Additionally, Joule Case reimbursed more than 60% of its debts in 2021. Therefore, Joule Case’s 2021 performance shows considerable progress and lowers its financial risk.

Joule Case’s customer reviews are positive, as seen on the company’s website. The company’s generator has been featured in Forbes and received the Idaho Early Stage Innovation of the Year Award. Joule Case also received letters of intent worth $100 million from music festivals. Additionally, Joule Case is currently developing an app to allow customers to monitor data about their generators, including the battery levels. This app will introduce a monthly subscription option, which should increase the company’s revenue.

Overall, Joule Case had a financially shaky start but has been able to adapt to the pandemic efficiently and is showing promising signs in 2021.

An investment in Joule Case offers a low risk profile. Financials are the major area of concern. In 2020, Joule Case’s gross margin was only 1%. The company also had total debt of more than $2 million. If this financial situation continues, it could lead the company to bankruptcy. However, this considerable financial risk is balanced by the company’s latest news. In the third quarter of 2021, Joule Case claims its gross margin grew to 83%. Additionally, the company paid more than 60% of its debts in recent months. This trend is reassuring because it decreases the company’s risk significantly. Therefore, Joule Case needs to maintain its growth to become financially sustainable.

Joule Case’s current raise is overvalued. Additionally, its 2020 financials are risky despite the company increasing its traction and more than doubling its revenue. The company’s debt is high, so 2021 and 2022 sales will be crucial. Joule Case is operating in a relatively small market with many competitors. It needs to emphasize its product advantages and significantly improve sales to reach financial stability. Moreover, outside of its own website, Joule Case doesn’t have many independent customer reviews to prove the quality of its product. Additionally, the company’s search engine optimization on Google doesn’t appear efficient and could prevent it from reaching new customers.

Joule Case’s patented and award-winning stackable system is a strong competitive advantage for the company. Even with one direct competitor, Joule Case has a distinctive design, a lower price, and offers a larger range of products. The market of battery and solar generators isn’t currently dominated by any company, and climate change is becoming more critical for Americans. The new California law on gas generators is designed to reduce gas emissions and will likely increase demand for battery- and solar-powered generators, showing a promising future for Joule Case in this state.

Joule Case’s performance in 2020 and early 2021 is promising. The company demonstrated that its product could fit various types of customers, even during the pandemic. Joule Case’s executives have also successfully generated interest from large music festivals taking place in summer 2021. The Joule Case team is complementary, experienced, and dedicated. Overall, Joule Case has a differentiated product backed by a well-qualified team.

Joule Case sells a portable generator operating on renewable energy. Its power capacity can be augmented by stacking additional batteries together. The generator can be charged through solar energy or simply through an electrical outlet. 

Joule Case’s patented technology allows for flexibility and sustainability. While the company is mostly targeting music festivals, it increased its revenue during the pandemic and proved that its generator can be used by a wide range of businesses and individuals. Joule Case’s stackable feature and low price give it a real competitive advantage. The company has a strong team, and it grew its revenue in 2021, considerably lowering its debt. Joule Case’s 2021 progress is lowering its financial risk.

However, Joule Case’s target market is still rather small, and fossil fuel generators dominate the market. There are also a number of established competitors with proven products that Joule Case needs to overcome. The company needs to widen its customer base and continue increasing revenue in order to achieve success. These efforts may be limited by the lack of sales and marketing team members and by the poor search engine optimization of Joule Case’s website. The company is also overpriced in this funding round, lowering the appeal for investors.  For these reasons, Joule Case is a Neutral Deal at this time.

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Analysis written by Léa Bouhelier-Gautreau, November 19, 2021.