Kara Water

Kara Water

Early Stage

Innovative Air-To-Water™ Technology

Innovative Air-To-Water™ Technology

Overview

Raised to Date: Raised: $357,889

Total Commitments ($USD)

Platform

StartEngine

Start Date

12/21/2023

Close Date

03/19/2024

Min. Goal
$15,000
Max. Goal
$1,234,999
Min. Investment

$300

Security Type

Equity - Common

Series

Seed

SEC Filing Type

RegCF    Open SEC Filing

Price Per Share

$1.84

Pre-Money Valuation

$15,996,960

Rolling Commitments ($USD)

Status

Active

Reporting Date

02/29/2024

Days Remaining

19

% of Min. Goal

2,386%

% of Max. Goal

29%

Likelihood of Max
unlikely
Avg. Daily Raise

$5,113

# of Investors

362

Momentum
warm.svg
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Year Founded

2020

Industry

Consumer Products, Goods & Services

Tech Sector

Hardwaretech

Distribution Model

B2B/B2C

Margin

Medium

Capital Intensity

Low

Location

New York, New York

Business Type

Growth

Kara Water, with a valuation of $16 million, is raising funds on StartEngine. The company has created a device that transforms air into clean water. Kara Water’s Kara Pure captures air from the environment, removes impurities, and extracts moisture from it through desiccation, creating high-quality and pure drinking water. The business has achieved $1.6 million in sales by selling over 800 units in 44 countries. Cody Soodeen founded Kara Water in July 2020. The current crowdfunding campaign has a minimum target of $14,999.68 and a maximum target of $1.23 million. The campaign proceeds will be used for sales and marketing, product development, and general and administrative expenses.

Summary Profit and Loss Statement

FY 2022 FY 2021

Revenue

$141,845

$0

COGS

$77,740

$0

Tax

$0

$0

 

 

Net Income

$-591,223

$-226,465

Summary Balance Sheet

FY 2022 FY 2021

Cash

$103,425

$9,705

Accounts Receivable

$102,637

$0

Total Assets

$1,053,500

$106,949

Short-Term Debt

$340,000

$20,000

Long-Term Debt

$0

$210,000

Total Liabilities

$340,000

$230,000

Financials as of: 12/21/2023
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Analyst Report

Synopsis

Water scarcity is a global problem that affects over 2 billion people who live in countries experiencing high water stress, according to the United Nations. Moreover, the World Health Organization estimates that by 2025, half of the world's population will live in water-stressed areas. This looming crisis calls for innovative solutions to ensure safe and clean drinking water access.

Kara Water addresses this challenge with its innovative device, Kara Pure, that transforms air into clean water. The device captures air from the environment, removes impurities, and extracts moisture through desiccation. The result is high-quality, pure drinking water that is mineral-rich and has an antioxidant-alkaline pH of 9.2+. The device can produce up to 2.5 gallons of water per day, equivalent to 20 bottles.

Since its inception, Kara Water has achieved $1.6 million in sales, selling over 800 units across 44 countries. This success indicates a strong market demand for such innovative solutions. The funds raised in the current campaign will be used for sales and marketing, product development, and general and administrative expenses, further fueling the company's growth.

Next Section: Price

Price

Kara Water is raising funds on StartEngine through common shares at a valuation of $16 million. At a revenue multiple of 112.78x, Kara Water's valuation seems high compared to its 2022 annual revenue of $141,845. However, this valuation isn't outrageous, knowing that the company has developed a unique Kara Pure device that transforms air into clean drinking water. With $1.6 million in revenue and over 800 units sold in 44 countries, Kara Water has gained global recognition and established solid partnerships.

 

Next Section: Market

Market

Kara Water finds itself at the intersection of several globally significant trends that are likely to boost its prospects. The company operates within the atmospheric water generator market, a sector expected to expand driven by freshwater scarcity and increasing technological investments. The global atmospheric water generator market is valued at $2.29 billion, with a projected growth rate of 9%.

The COVID-19 pandemic has accelerated the demand for atmospheric water generators due to increased water requirements, driven by heightened hygiene awareness and disrupted water supply in certain areas. This trend is expected to persist even after the pandemic, especially in the U.S., where significant investments are being made into water infrastructure.

Moreover, the global trend towards sustainability and resilience, coupled with the increasing instances of water scarcity and depleting groundwater levels, is expected to boost the demand for atmospheric water generators further. Policies to establish water infrastructure are also anticipated to augment the demand for these devices over the forecast period.

Next Section: Team

Team

Kara Water was founded by CEO Cody Soodeen and Michael Di Giovanna. Soodeen has a background in architecture and engineering. His early career involved working on high-rise buildings and megaprojects around the world. Soodeen's passion for water stems from his experience with bacteria-riddled drinking water. Inspired by the Namibian desert beetle, he developed a system that could replicate the beetle's ability to turn air into drinking water. This led to the creation of Kara Pure, which has become thousands of people's primary source of clean drinking water.

Michael Di Giovanna, the other founder of Kara Water, contributes to the team part-time as an advisor.

Next Section: Differentiation

Differentiation

Kara Water has positioned itself as a global player in the atmospheric water generator market with its innovative product, Kara Pure. The company's device transforms air into clean drinking water, offering a unique and sustainable solution to the global water crisis.

Kara Water's key differentiation lies in the quality of its product. Kara Pure captures air from the environment, removes impurities, and extracts moisture through desiccation, producing high-quality and pure drinking water. The water produced by Kara Pure is mineral-rich, with a pH level of 9.2+ and antioxidant-alkaline properties. This sets Kara Water apart from its competitors, as it offers a superior and healthier drinking water option.

Kara Water's success can be attributed to its recognition from reputable sources such as Fast Company, TIME Magazine (Best Invention 2022), and CES. Additionally, Kara Water has obtained patents for its technology, further establishing its unique position in the market.

Kara Water operates in a slightly competitive landscape, with established competitors like Watergen, Skywater, and H2O Machine. The company's competition sells its products at various prices through various distribution channels. But Kara Water has the most elegant design, which can allow it to price its product slightly higher than its competition.

Barriers to entry in the atmospheric water generator market are high, as it requires expertise in technology, engineering, and water purification. Kara Water's founder, Cody Soodeen, has spent 11 years refining the technology, and the leadership team brings decades of collective expertise in architecture, technology, and finance. These factors contribute to the company's strong differentiation and competitive advantage.

Next Section: Performance

Performance

Kara Water has achieved notable traction in the market with $1.6 million in revenue. The company has gained recognition globally, with products sold in 44 countries. Kara Water has also secured four solid partnership agreements, demonstrating its ability to collaborate effectively. The company has received accolades from reputable sources such as Fast Company, TIME Magazine (Best Invention 2022), and CES, further enhancing its reputation.

Founder Cody Soodeen has dedicated 11 years to developing and refining the technology behind Kara Water's innovative product line. The leadership team, which includes individuals with experience at companies such as Grimshaw, 7AC Tech, Indiegogo, and CNN, brings decades of collective expertise in architecture, technology, and finance. Kara Water is well-positioned for growth and global expansion with a strong leadership team, 492 operational units, and a viral YouTube video.

Kara Water's product offering, Kara Pure, is a device that transforms air into clean water. Kara Pure produces high-quality and pure drinking water by capturing air from the environment, removing impurities, and extracting moisture through desiccation. The company has previously raised $755,000 in funding rounds, contributing to its current valuation of $16 million.

Next Section: Risk

Risk

Investing in Kara Water comes with certain risks that potential investors should know. Firstly, it is still in the early stages of development and has not yet reached profitability. This pre-profit stage indicates the company has not yet proven its ability to generate sustainable and consistent revenue. There is uncertainty regarding the company's future financial performance and ability to scale its production to meet increasing demand.

Kara Water operates in the global atmospheric water generator market, which is slightly competitive. The company faces direct competition from Watergen, Skywater, and H2O Machine. These competitors may have established market presence, brand recognition, and resources that could make it challenging for Kara Water to gain market share and establish itself as a dominant player in the industry.

Kara Water's business model also relies on the production and quality control of its hardware product, Kara Pure. Manufacturing and maintaining the quality and functionality of the product is crucial for customer satisfaction and repeat purchases. Any issues or delays in production or quality control could result in customer dissatisfaction, reputational damage, and potential legal issues.

Furthermore, Kara Water needs a long time to scale its production sales and distribution efforts. Scaling production requires significant investments in manufacturing facilities, supply chain management, and logistics. Scaling sales and distribution efforts will require expanding marketing and distribution channels to reach a wider customer base. These scaling challenges pose risks regarding cost management, operational efficiency, and market penetration.

Lastly, Kara Water's valuation of $16 million may be considered overvalued by some investors, especially considering the company's current revenue and profitability levels. There is a risk that the company's valuation may not be justified by its financial performance, which could impact the potential return on investment for investors.

Next Section: Bullish Outlook

Bullish Outlook

Kara Water's revolutionary technology can potentially transform how we access clean drinking water. Its innovative Kara Pure device captures air from the environment, removes impurities, and extracts moisture through desiccation, producing high-quality and pure drinking water. This breakthrough solution addresses the global need for clean water and has already generated $1.6 million in sales.

The market potential for Kara Water is significant, given the increasing demand for sustainable and accessible water solutions worldwide. As an atmospheric water generator, Kara Pure taps into the global atmospheric water generator market and offers a unique value proposition. The company's ability to generate mineral-rich, antioxidant-alkaline water with a pH level of 9.2+ sets it apart from traditional water sources and positions it as a leader in the industry.

Furthermore, Kara Water has established partnerships and collaborations to support its growth. These partnerships enhance distribution capabilities and increase the company's reach in B2B and B2C markets. Kara Water's strong market positioning, innovative technology, and proven sales track record contribute to a bullish outlook for the company.

Next Section: Bearish Outlook

Bearish Outlook

Kara Water operates in a niche market and could face challenges in scaling its business and achieving profitability. It operates in a slightly competitive landscape with indirect competitors like Watergen, Skywater, and H2O Machine. 

Another challenge for Kara Water is the low capital intensity level of the industry. The low capital requirements may indicate limited barriers to entry, potentially leading to increased competition from new entrants. This could further impact Kara Water's ability to differentiate itself and gain a competitive advantage in the market.

Next Section: Executive Summary

Executive Summary

Kara Water has made significant strides in the consumer products industry with its innovative Kara Pure device, which transforms air into clean, high-quality drinking water. The company's technology captures air, removes impurities, and extracts moisture to produce mineral-rich, antioxidant-alkaline water with a pH of over 9.2. With $1.6 million in sales and over 800 units sold across 44 countries, Kara Water has established a global presence and is recognized for its pioneering Air-To-Water™ technology. The company's achievements include raising $735,000 on a convertible note, $1.3 million on Indiegogo, and receiving accolades from prestigious entities like Fast Company and TIME Magazine.

The atmospheric water generator market, which Kara Water is part of, is expected to grow due to freshwater scarcity, technological investments, and government initiatives. Kara Water's product is well-positioned to capitalize on this trend, especially with the rising demand for independent and scalable water security technologies. 

Despite being in an early growth stage and pre-profit, Kara Water has demonstrated a capacity for generating revenue and has secured four solid partnership agreements. The company's leadership team, with diverse architecture, technology, and finance expertise, is a strong asset. Founder Cody Soodeen's 11-year dedication to refining the technology and the team's experience with notable companies positions the company for further growth and innovation. With plans for global expansion and 492 operational units, Kara Water aims to become a significant player in the industry.

Kara Water's current crowdfunding campaign on StartEngine, with a valuation of $16 million, aims to raise funds for sales and marketing, product development, and general and administrative expenses. This funding will support the company's growth trajectory and help solidify its position in a market with high barriers to entry and a competitive landscape where Kara Water has already achieved a degree of differentiation.

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Kara Water on StartEngine 2023
Platform: StartEngine
Security Type: Equity - Common
Valuation: $15,996,960
Price per Share: $1.84

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