Overland Bound is raising via a Crowd SAFE with a $10 million valuation cap and 10% discount rate. With recent revenue of $856,265, this funding round has a revenue-to-valuation multiple of around 12x. Considering Overland Bound is a software-based company, the current valuation is fair. A $10 million valuation is also in line with other early stage startups raising capital online. Overall, Overland Bound looks to be reasonably priced.

Overland Bound is in the adventure tourism market. That market is worth $562.1 billion globally and is growing at an annual rate of 12.5%. Some of the market drivers include an increase in disposable income as well as a shift in consumer behavior from desiring material possessions to desiring exciting experiences. The pandemic has also boosted interest in adventure tourism, as it allows for social distancing.

Overland Bound’s main target is the US, which limits the company’s obtainable market size. Additionally, the company specifically targets SUV and light truck owners – handicapping its market adoption even further. Overland Bound is likely to benefit from the adventure tourism market’s rapid growth, but those benefits will be limited by the company’s narrow market focus.

Overland Bound is led by three co-founders: CEO Michael Murguia, CMO Corrie Murguia, and CTO Steve Wetherill. CEO Murguia majored in broadcast communications at Sonoma State University and film production at San Francisco State University. He held senior positions at multiple companies, including Electronic Arts and KIXEYE. While he has a great track record for managerial experiences, he does not have prior experience in the adventure tourism industry. This could affect Overland Bound’s growth and reach. 

CMO Murguia got her bachelor’s degree in fine arts from the Boston Conservatory. She then had multiple marketing positions in companies such as 6 Pack Fitness and BeingTRUE, a skincare and cosmetics company mainly targeting the spa industry. Like the CEO, CMO Murguia has multiple prior marketing experiences but no experience in the adventure tourism sector specifically. Her marketing background is useful for her current position, but it would greatly benefit the company if the CMO had a network in the adventure tourism sector. This would smooth out the company’s market adoption and customer acquisition. 

Wetherill majored in electronics and electrical engineering at The University of Manchester. He has more than 30 years of prior experience as a game developer, programmer and producer in multiple gaming companies such as Westwood Studios, Petroglyph Games, and KIXEYE. Wetherill also lacks adventure tourism industry experience, but he has the background and the skills to sit as the company’s CTO. 

Overland Bound’s team consists of only the founders and one business development advisor. While the founders have a nice mix of skill sets, the team needs to scale to expand the company’s reach. More team members would help the company progress toward its goals of launching the Expedition tier, increasing brand awareness, and acquiring more users. Moreover, having a team member that has experience in the adventure tourism industry would significantly enlarge the company’s network, which is the core of its product.

Overland Bound’s core product is the Overland Bound One app. The three pillars of the product are Connect, Plan, and Go. The product allows users to connect with the local network, plan their trips according to weather, trails and other info, and travel with an offline map. Overland Bound’s key advantage is the community feature of its product. The company currently has 70,000 adventurers in its community and a direct social reach of 700,000. A company that has this huge of a network tends to scale rapidly. The more people use it, the more valuable the business is – and when the business is proven to be valuable, it will attract even more customers. This is why the network effect is powerful and makes the product defensible.

But there are a lot of other established applications, such as Oh Ranger and AllTrails, that provide similar specialized products. This makes Overland Bound just an aggregator of all solutions that currently exist in the market. The company’s products are not unique nor  difficult to replicate. So Overland Bound needs to maintain its network effect to sustain its value for its users. Overall, the company is not very well-differentiated.

Despite operating for only three years, Overland Bound has a tremendous track record. The company has grown its network to 70,000 adventurers. Currently, it has 30,000 paid members and gets $10,000 in new organic subscribers per month. It was able to increase its revenue by 75% from $491,991 in 2019 to $856,265 in 2020, totaling $3 million in lifetime revenue. In addition to this rapid growth, the company also has an impressive marketing presence with a direct social reach of 688,000. Overland Bound has raised $1.6 million in prior rounds and has limited debt. All in all, the company has been performing above and beyond in every aspect.

Overland Bound bears very low risk. Its team is the major area of concern. Although the company’s small team of three has the benefit of being capital efficient, scaling the team would significantly expand the company’s reach and enlarge its network effect even further. Moreover, the founders have no experience in the adventure tourism industry. Hiring someone who does would streamline the company’s market adoption process.

Overland Bound’s product – which is essentially a combination of multiple existing adventure tourism products – is easily replicable. In order to maintain the value of its product, the company has to keep expanding its community. But Overland Bound’s small team may have difficulty doing so. There is also no team member with prior experience in or connections to the adventure tourism industry. Furthermore, while Overland Bound’s obtainable market is sizable, the company specifically targets SUV and light truck owners. This is a niche market that might hinder the company’s ability to grab a sizable market share. It also creates a limitation if the company wants to expand to other markets. In order to expand its potential customer pool, Overland Bound might benefit from reaching out to a broader consumer base.

Overland Bound has demonstrated a terrific financial performance since its inception. The company has been growing rapidly both in number of users and in revenue. The company’s strong marketing presence might also have a huge impact on this growth. And Overland Bound’s large network effect makes its product defensible. It also has a sizable obtainable market that is expected to expand rapidly in the next few years, as there is an increasing trend toward outdoor recreation. Furthermore, the company is raising at a fair valuation and an attractive valuation revenue multiple.

Overland Bound is an all-in-one solution for outdoor adventurers and explorers alike. The product allows users to connect with the local community, plan trips utilizing information like trails and weather, and travel with an offline map. 

While the company has built an impressive community, its solution is just an aggregator of established services that already exist in the market today. There are numerous free apps for the adventure tourism industry. Overland Bound’s team is quite small, and none of the founders have prior experience in the adventure tourism industry. In order to maintain its value, it is crucial for the company to scale the team to expand the community and enlarge its network effect. The company is in the adventure tourism industry, which is sizable. However, Overland Bound mainly targets SUV and light truck owners. This niche market might prevent the company from growing and expanding into other markets. 

That said, Overland Bound’s market is growing rapidly and has the potential to keep growing, as an increased interest in outdoor recreation has been trending since the pandemic began. The company has also been performing tremendously well. It has shown impressive growth both in the number of users and revenue. At the same time, Overland Bound has remained fairly capital efficient with limited debt. It is priced at a fair valuation, and it has an attractive valuation revenue multiple. The company is a low-risk investment opportunity as well. Considering all these factors, Overland Bound has been rated a Neutral Deal. 

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

Analysis written by Inez Sanjaya, November 11, 2021.