Applaudable

Early Stage

Explore inspiring spaces, find amazing designers, shop curated products.

Analytics

Raised to Date: Raised: $1,860,336

Aggregate Commitments $

Platform

Republic

Start Date

08/31/2021

Close Date

06/06/2022

Min. Goal

$266

Max. Goal

$7,500,000

Min. Investment

$266

Security Type

Equity - Common

Funding Type

RegA+

Series

Series A

Price Per Share

$6.65

Pre-Money Valuation

$34,998,405

Rolling Commitments $

Status
Funded
Reporting Date

06/30/2022

Days Remaining
Funded
% of Min. Goal

699,374%

% of Max. Goal

25%

Likelihood of Max
Funded
Avg. Daily Raise

$6,668

# of Investors

1,765

Momentum
Funded
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Location

New York, New York

Industry

Consumer Products, Goods & Services

Tech Sector

Retailtech

Distribution Model

B2B/B2C

Margin

Medium

Capital Intensity

Low

Business Type

Growth

Applaudable, with a valuation of $35 million, is raising funds on Republic through Reg A+ crowdfunding. The company has developed an online shopping platform, Moro, that uses social search to change how people shop online. The platform provides highly curated and user-generated photos that help make purchase decisions by providing context. The company is extending social search with Applaudable by allowing users to search, share, and find experiences they love. Andrew Christodoulides founded Moro & Applaudable in April 2016. The current crowdfunding campaign has no minimum target and a maximum target of $7,500,000. The campaign proceeds will be used for product development, marketing, management hiring, web services, and business development.

Balance Sheet

Cash and Cash Equivalents

$392,143

Investment Securities

$0

Total Investments

$0

Accounts and Notes Receivable

$0

Loans

$0

Property, Plant and Equipment (PP&E)

$0

Property and Equipment

$0

Total Assets

$392,143

Accounts Payable & Accrued Liabilities

$3,230

Policy Liabilities and Accruals

$0

Deposits

$0

Long Term Debt

$125,000

Total Liabilities

$1,433,970

Total Stockholders' Equity

$-1,041,827

Total Liabilities and Equity

$392,143

Statement of Comprehensive Income Information

Total Revenues

$223,252

Total Interest Income

$0

Costs & Expenses Applicable to Rev

$271,032

Total Interest Expenses

$0

Depreciation and Amortization

$0

Net Income

$-872,235

Earnings Per Share - Basic

$-0.16

Earnings Per Share - Diluted

$-0.16

Auditor: TaxDrop, LLC
Financials as of: 08/31/2021
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Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
Applaudable 06/06/2022 Republic $34,998,405 $1,860,336 Equity - Common Funded RegA+
WeLivv 12/31/2019 Republic $20,000,000 $1,070,000 SAFE Funded RegCF
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Ratings KingsCrowd Startup Rating Methodology Article

Analyst Report Analyst Report Methodology Article

Synopsis

Consumers are inundated with online shopping options for home goods. But many websites present home goods without context  – products pictured on a blank background – and product reviews can be inaccurate, sponsored, or undetailed. Social media platforms have tried to fill these gaps with in-app purchasing options. While in-app purchasing solves the problem of context and engagement, they often don’t cover all products that a company offers and search results aren’t optimized. 

Moro & Applaudable transforms the way people shop online with social search. Social search enables consumers to see how people whose tastes they admire responded to a product or service. Both the Moro and the Applaudable sites integrate user-generated photos with social search, which provides context and supports purchase decisions. Rather than shopping through paid advertising and internet cookies, customers can now shop through the experience and feedback of others. 

Moro – previously known as WeLivv – offers images of real homes, with products that are fully shoppable. Users can filter for aesthetics that align with their own and then browse products through images shared by homeowners and interior designers. The site currently offers 450 top brands and 120,000 linked products. The Applaudable site goes beyond home furnishings and focuses more on experiences, products, and destinations. Like Moro, Applaudable users can browse and shop based on what other users have shown enthusiasm for. Applaudable is currently in beta testing with full launch expected sometime in 2022.

Moro & Applaudable’s current Republic raise has been rated a Neutral Deal by the KingsCrowd investment team. 

Price

Moro & Applaudable’s current round is valued at $35 million. The company saw revenue of $223,252 in 2021, which is a 61% decline from the previous year. Moro & Applaudable is currently pre-profit and lacks relevant home furnishing partnerships that would aid in its growth.. The company’s revenue-to-valuation multiple as of 2021 is also above average compared to the online furniture shopping industry averages. Overall, Moro & Applaudable’s valuation is overpriced given its decline in revenue, pre-profit status, and above-average revenue multiple.

Market

Moro operates in the broad-ranging US online household furniture shopping market. Revenue from online furniture sales is estimated to reach $58.7 billion in 2022. The market has grown by 11.8% annually since 2017. However, it’s important to note that online furniture sales is a very broad market, and there are many well-established companies in this sector. Moro will benefit from the market’s strong growth, but it will be unlikely to secure market dominance.

Applaudable operates in the general digital advertising market, which could improve sales as users can search, share, and find any experience that other users loved. In 2021, $153 billion was spent on internet advertising, which had a fairly average projected 5% annual growth rate until 2025. In 2020, content marketing was thought to be the most effective digital marketing technique. It’s expected that the use of AI and machine learning, social media marketing, and search engine optimization will further boost its success. Money spent on digital advertising of all kinds will likely increase given industry trends, online shopping, and increased globalization. 

Overall, Moro & Applaudable’s target markets are large, and the company has a variety of opportunities to widen its reach. Through the beta testing and upcoming launch of Applaudable, it appears the company is starting to explore the more general digital advertising markets through its social shopping feature. Moro & Applaudable looks fairly well-positioned to secure a decent niche  through its community-oriented, carefully curated, and customer-driven shopping recommendations. 

Team

Moro & Applaudable founder and CEO Andrew Christodoulides is a serial entrepreneur who founded three businesses within the last 20 years. His first success was Acena, a business in the call center outsourcing industry that was later sold for more than $3 million. He later began to explore the online home decor shopping industry with his company Original Pad. Original Pad preceded Moro and grew to $4 million in annual revenue within less than five years. Christodoulides founded Moro in 2017 and has been growing its offering steadily for the last five years. Applaudable is his most recent venture, but he has paired Moro and Applaudable to strengthen the likelihood of business success. 

Executive Chairman and Chief Strategy Officer Laurence Levi has a background in private equity and investment management. After founding a boutique investment banking firm, he served as head of strategy for technology and e-commerce firms. Levi received his BA from the University of Wisconsin and JD from Columbia Law School before his time as a transactional attorney at Latham & Watkins. 

Moro & Applaudable also benefits from experienced advisor Ben Uretsky. Uretsky is the past founder of DigitalOcean, which went public in 2021 and has a market cap of $5.5 billion. He is well-versed in the home customization space through his startup WelcomeHomes and deeply understands the space.

Moro & Applaudable’s founder has both industry and entrepreneurial experience, and his history of exits offers strong leadership. Other key members of the team are similarly experienced and will likely help extend the network for the company. Overall, the team is promising for investors.

Differentiators

The market for US online furniture shopping and digital marketing is crowded, and it can be difficult to determine qualities that distinguish one product or brand from another. Competitors in the US online furniture shopping space include Wayfair, IKEA, Restoration Hardware, Overstock, Houzz, and AllModern, to name a few. These competitors vary in price but offer similar services to Moro. While Moro is focused on letting users see furniture pieces in completed interior settings, it’s not clear that this difference will be enough to overcome familiar legacy brands.

Competitors in the US digital marketing space include Pinterest, Instagram, and Facebook. Arguably, even The New York Times competes with Moro due to the many articles it produces recommending tech gadgets, vacation spots, and home furnishings. Digital marketing is an extremely crowded space, and Applaudable will be going up against legacy competitors with highly engaged user bases. The platform’s emphasis on enabling users to shop directly from photos that align with their preferences is likely not enough to overcome such intense competition. Additionally, Moro & Applaudable’s technology for social search and shopping can’t be patented, and the entry barriers in these markets are relatively low, spiking differentiator and defensibility concerns. It appears Moro & Applaudable might struggle to differentiate and defend itself among the fierce competition in both markets.

Performance

Moro has demonstrated powerful commercial traction, and Applaudable boasts strong early results. Moro has developed a successful user acquisition system with an extraordinarily high 50% conversion rate. It is positioned to understand image contents, making them searchable and shoppable, and has amassed six million photos of home furnishings. Applaudable is more early in its performance, but 50% of invited users joined during beta testing. The company projects having 100,000 pre-registered users by launch in 2022. 

Moro had previously raised more than $2.4 million to aid in website development and growth measures. Despite user traction, Moro & Applaudable’s $223,252 revenue in 2021 was a 61% decline in revenue from the previous year. This drastic decline in revenue could be a poor indicator for Moro & Applaudable’s future in the online furniture shopping and digital advertising sector. Moro & Applaudable’s monthly burn rate is relatively high at $72,688, which is a direct result of expansion plans coupled with limited financial traction. To address limited financial traction, it might be advantageous for Moro & Applaudable to focus on acquiring established partners in the online furniture and advertising space. 

Overall, Moro & Applaudable has strong user traction but rather weak financial performance so far. If Moro & Applaudable is able to test and expand its product offerings more rapidly than many other companies in this space, it could rise above competitors given its far-reaching service and lean executive team. 

Risks

Moro & Applaudable’s overall risk level is low. However, it has financial, defensibility, and differentiation risks. The company was founded in 2017, but it has only recently gained financial traction and remains pre-profit. Being in the online shopping and advertising space, this raises questions about future financial growth. Moro & Applaudable will need to address its high monthly burn rate, pre-profit status, and declining revenue to ensure future profitability and financial growth for investors.

Defensibility and differentiation risks arise due to the competitive nature of the markets Moro & Applaudable operates within. Moro & Applaudable is unable to patent its technology at this point, making its offering service easy to replicate. While Moro & Applaudable might offer a superior service to its competitors, it can be difficult to stand out among established and trusted brands.  

Updates Since Last Round

As WeLivv, Moro raised a SAFE round on Republic in 2019. At that time, it was rated a Deal to Watch by the KingsCrowd team. Its previous valuation was $20 million, which has now increased to $35 million. Prior to quarter three of 2021, Moro secured $2.4 million in total funding and launched Applaudable. Upon launch, Applaudable boasted 100,000 users, which was three times faster than the current growth of Clubhouse. The Moro & Applaudable products and user bases saw moderate progress. Unfortunately, the Moro & Applaudable team saw no growth, and revenue numbers experienced noteworthy decline. Limited team growth and slowing revenue might be attributed to social factors, market competition, or reorganizing priorities. Despite its traction, the company experienced fairly limited progress since its last round. Therefore, its rating was downgraded to a Neutral Deal.

Bearish Outlook

Moro & Applaudable’s biggest concerns are rooted in its financials and competitors. It operates in a very crowded market where legacy brands dominate and customers are often comfortable with the status quo. Name recognition and a large customer base is vital for adopting new customers and ensuring enthusiastic customer engagement. As a new company with a relatively similar service offering to its established competitors, Moro & Applaudable could struggle to convert new customers. 

Although it was founded in 2017, Moro & Applaudable has only recently gained financial traction. Despite $223,252 in revenue, it has yet to become profitable and has a high monthly burn rate. Until the company can demonstrate continued financial growth, investors may be concerned about the company’s future profitability.

Bullish Outlook

Moro & Applaudable is gaining financial traction, creating loyal customers, and diversifying its service offerings. The company’s customer base has grown significantly since its launch and has established specific milestones to ensure continued growth. Competition in the US online furniture and digital marketing space is fierce, but these are not winner-takes-all industries. Moro & Applaudable’s services are attractive for sellers, as it has been able to advertise 450 top brands and 120,000 linked products. Moro’s current 50% user conversion rate is incredibly promising, and it aims to onboard new customers and brands in the following year.  

The Moro & Applaudable offering helps customers gain agency and confidence in their shopping efforts. The company’s merger of social media, online shopping, and supportive customer recommendations makes Moro & Applaudable’s offering more competitive and appealing to new customers looking for context and social engagement when shopping. With a strong executive leadership team, noteworthy advisors, and past capital raised, Moro & Applaudable could become a leader within the online furniture and digital marketing spaces. 

Executive Summary

Moro & Applaudable is transforming the way consumers search and shop online. The platform for online shopping encourages context, user experience, and decision support through seamless technology. Moro & Applaudable’s recent user and product growth is encouraging for investors as it irons out plans for expansion in the coming years. It has goals to secure additional brands, grow revenue, develop an app, and later fully integrate. Its CEO is an experienced entrepreneur who is beginning to build out a comprehensive team of executives to support the growing company. 

Despite this growth and plans for future development, there are some concerns for investors. Given the nature of this service, it has significant defensibility concerns because it offers similar services to its competitors. Operating within such a crowded market with limited financial traction leaves Moro & Applaudable particularly vulnerable. The company’s current valuation is also overpriced compared to industry averages. Therefore, Moro & Applaudable has been rated a Neutral Deal by the KingsCrowd investment team.  

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

Analysis written by Carolyn Price, January 6, 2022.

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Applaudable on Republic 2021
$
Platform: Republic
Security Type: Equity - Common
Valuation: $34,998,405
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