LimeLoop

Early Stage

Provides reusable packaging and detailed metrics with built-in smart technology

Analytics

Raised to Date: Raised: $120,132

Aggregate Commitments $

Platform

Wefunder

Start Date

05/11/2021

Close Date

07/23/2021

Min. Goal

$50,000

Max. Goal

$100,000

Min. Investment

$100

Security Type

Convertible Note

Funding Type

RegCF

Series

Pre-Seed

Valuation Cap

$7,000,000

Discount Rate

0%

Rolling Commitments $

Status
Funded
Reporting Date

07/31/2021

Days Remaining
Funded
% of Min. Goal

240%

% of Max. Goal

120%

Likelihood of Max
Funded
Avg. Daily Raise

$1,646

Momentum
Funded
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Location

Tuscon, Arizona

Industry

Logistics, Delivery, & Supply Chain

Tech Sector

CommerceTech

Distribution Model

B2B

Margin

Medium

Capital Intensity

High

Business Type

High Growth

LimeLoop, with a $7 million valuation cap, is raising funds on Wefunder. The company offers smart shipping and packaging solutions for e-commerce retailers to package and ship their products in a secure and environment-friendly way. Ashley Etling and Chantal Emmanuel founded LimeLoop in November 2018. The proceeds of the current crowdfunding round, with a minimum target of $50,000 and a maximum target of $100,000, will be used for growth and expansion. LimeLoop has reported ten times growth since 2020 and has reported huge consumer demand. The business works on a subscription-based model at $2.50 per smart shipper per month.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$70,428

$47,022

COGS

$4,849

$10,576

Tax

$15,299

$16,288

 

 

Net Income

$-216,070

$-364,420

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$42,768

$30,935

Accounts Receivable

$805

$1,845

Total Assets

$96,465

$70,237

Short-Term Debt

$202,598

$152,400

Long-Term Debt

$650,605

$458,505

Total Liabilities

$853,202

$610,905

Financials as of: 05/11/2021
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Ratings

Analyst Report

Synopsis

Over the past decade, consumer habits have shifted in favor of online shopping. The increased popularity of two-click purchases and overnight shipping was undoubtedly catalyzed by the pandemic. And as shopping becomes increasingly digitized, so does the need for more sustainable packaging solutions. In fact, packaging needed to fulfill online orders is one of the biggest contributors of plastic waste.

As such, companies are starting to pay more attention to how they package products. According to Packaging Digest, a flood of companies over the last few years have announced new goals to make their packaging more sustainable.

One company attempting to close the “waste loop” is LimeLoop. CEO Ashley Etling and Chantal Emmanuel founded the company to create reusable packaging. Its smart packaging solution includes user engagement and temperature monitoring features that give clients a data-driven, eco-friendly approach to shipping.

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

Price

LimeLoop is raising funds via convertible note at a $7 million valuation cap. This relatively reasonable valuation led to a price rating on the higher end of the spectrum. With just over $70,000 in revenue for the most recent fiscal year, this makes for a high revenue multiple. There is no discount rate applied to the valuation cap for this round.

Market

With applied growth rates, the US share of the global returnable packaging market is approximately $20 billion. But this figure includes crates, palettes, dunnage, and other forms of packaging that don’t apply to LimeLoop’s target market. A more accurate number for the addressable market is $2.3 billion, which accounts for direct-to-consumer home shipping solutions like LimeLoop’s product offering. The market’s compound annual growth rate is approximately 5.7%.

The market is undoubtedly large and saturated with both eco-friendly and traditional products (single-use boxes, envelopes, etc.). But trends are leaning heavily in favor of returnable shipping solutions. In 2018 and 2019, a large group of brands publicly announced new goals to make their packaging more sustainable, particularly in regards to plastic packaging. Large incumbents like Amazon are even citing sustainable packaging as a top priority. But given LimeLoop’s large number of competitors and smaller-than-expected obtainable market, its market score is its lowest.

Team

Ashley Etling and Chantal Emmanuel founded LimeLoop in 2017 and serve as the CEO and CTO, respectively. The pair shares experience at Red Clay, a platform for on-demand industrial design that Etling founded in 2010. According to Crunchbase, Red Clay has raised $1 million in committed capital since its inception.

Emmanuel brings technical expertise to the table where Etling brings business acumen. Emmanuel has served as a software engineer at various institutions, including SYPartners and Red Clay. She holds a bachelor’s degree from State University of New York at Binghamton. 

No other employees are mentioned on the company’s raise page, though the Form C lists three total. LinkedIn suggests the third employee may be Kara Kreutzberg, who seems to be a recent full-time addition dedicated to growth. She has prior experience at various companies in miscellaneous sales and business development roles.

Overall, the team is lean (though not without gaps) and has highly relevant experience. The team’s shared and complementary experience give LimeLoop a decent team score.

Differentiators

LimeLoop’s differentiation score is one of its highest. Though there are already several reusable packaging companies out there, many are product specific. For example, BarePack, a Singapore-based company, aims to reuse food packaging. Returnity and Packoorang are closer competitors, though Packoorang is based in Norway and primarily services Scandinavia. 

In addition, few companies offer smart packaging that tracks statistics like temperature and user engagement. This gives LimeLoop a unique value proposition. 

It should be noted, however, that LimeLoop does not have any known patents, making defensibility relatively low. This is also a space with few barriers to entry, so more competitors could easily emerge.

Performance

LimeLoop’s mediocre performance score reflects conflicting data points. The raise page claims the company is generating $35,000 in monthly recurring revenue (MRR). The Form C reports just over $70,000 in revenue for the most recent fiscal year. It’s likely that the SEC filings are outdated or the reported MRR is a recent accomplishment, and the numbers on the Form C are reflective of just two months. Additionally, the company still hasn’t generated a profit, and very little capital has been invested prior to this round.

The raise page reports investments from Sequoia Scout, City Light Ventures, Straubel Foundation, and BeyGood Grant. But the exact amounts and nature of these investments are not mentioned on Crunchbase.

Risks

LimeLoop’s risk level is moderate. The company needs to prove product market fit and scale sales and distribution. The overall legal risk is minimal, but the product remains relatively untested. The founders are dedicated, but the team will need time to scale both sales and distribution as well as production. This is especially important as the business relies on customers returning the product, making a loss of inventory seem inevitable. 

The financial risk should also be noted. The company has approximately $650,000 in long-term debt with just $96,000 in assets for the same reported fiscal year. Why this debt is accumulating is unclear, though it makes for a high debt-to-asset ratio.

Bearish Outlook

LimeLoop is a company that almost entirely relies on changing consumer behavior, making its early entry to the market a large disadvantage. In order to succeed, the company must educate the market and incentivize its users. The company must also have a way to make up for its likely loss of inventory. The team is also quite lean, and though there is a technical founder, the company will eventually scale beyond a three-person operation. Additionally, defensibility is relatively low. LimeLoop has no patents. Competition has already cropped up, and barriers to entry are minimal. This could be a problem for LimeLoop. Finally, though revenue is steadily increasing, it should be noted that the company has accumulated quite a bit of debt over its years of operation.

Bullish Outlook

Social trends are heavily in favor of LimeLoop. Major corporations are prioritizing sustainable practices, and the LimeLoop solution offers businesses a chance to have a smaller environmental impact with an add-on data play. The company’s temperature and user engagement tracking sets it apart from domestic competitors. Not to mention, it already has a presence in all 50 states. Finally, the founders have both shared and complementary past experience.

Executive Summary

LimeLoop is a business-to-business subscription service for reusable smart packaging. The solution reduces the environmental impact of online shopping and tracks statistics on temperature and open rate, among other user engagement metrics.

Overall, LimeLoop scores well for price and differentiation. The reasonable terms and quality differentiation of the product are obvious. The small team has very complementary skill sets, though it will need to grow significantly as operations scale. LimeLoop grew revenue by 49% over the past two years, which is a good sign despite its high debt. The team also reports $35,000 in monthly recurring revenue, a number it expects to grow over the coming years.

Finally, LimeLoop is a first-mover in the US. However, in this case, being an early mover may be a disadvantage. The company relies on changing consumer behavior. It’s not certain that  environmental impact will be enough to incentivize users to return LimeLoop’s product to be reused. As such, the team must be prepared to account for lost inventory. This also means that the company’s success may be, in some regards, out of the founders’ control.

Despite a trending market and impressive founders, the company has some hurdles it must overcome to succeed. As such, LimeLoop is 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 Olivia Strobl.

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