Perrone Robotics

Growth Stage

Kits for autonomous vehicles used in local transit of people and things.

Analytics

Raised to Date: Raised: $0

Aggregate Commitments $

Platform

Wefunder

Start Date

12/21/2020

Close Date

02/17/2021

Min. Goal

$250,000

Max. Goal

$1,070,000

Min. Investment

$100

Security Type

SAFE

Funding Type

RegCF

Series

Series B

Valuation Cap

$59,200,000

Discount Rate

20%

Rolling Commitments $

Status
Not Funded
Reporting Date

02/17/2021

Days Remaining
Not Funded
% of Min. Goal

0%

% of Max. Goal

0%

Likelihood of Max
Not Funded
Avg. Daily Raise

$0

Momentum
Not Funded
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Location

Crozet, Virginia

Industry

Transportation, Automotive, Aviation, & Aerospace

Tech Sector

Hardwaretech

Distribution Model

B2B

Margin

Medium

Capital Intensity

High

Business Type

Growth

Perrone Robotics has superior technology in the autonomous vehicle space. Its software is so efficient that it can operate on a Raspberry Pi. The company was founded in 2003 by Paul Perrone. The current crowdfunding campaign has a minimum target of $250,000 and a maximum target of $1,070,000. Perrone Robotics product allows field a fully autonomous vehicles for revenue generating operation today in places with fixed boundaries such as residential areas, work sites, and downtown business routes.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$1,855,453

$3,049,430

COGS

$87,852

$192,303

Tax

$24,240

$17,197

 

 

Net Income

$-427,821

$-535,948

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$44,607

$223,419

Accounts Receivable

$5,448

$35,846

Total Assets

$220,963

$490,787

Short-Term Debt

$481,927

$365,615

Long-Term Debt

$29,298

$18,511

Total Liabilities

$511,225

$384,126

Financials as of: 12/21/2020
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Ratings KingsCrowd Startup Rating Methodology Article

Analyst Report Analyst Report Methodology Article

Synopsis

The industry of autonomous vehicles is on the cusp of breakthrough. Companies like Tesla and Google are  actively trying to create a fully self-driving car. Currently, the technology exists to allow for this, and there are varieties of self-driving cars on the road right now.

However, the main issue with self-driving cars is the scale. Large distances add complications — more pedestrians, varying signage and traffic signals. But what if you reduce the scale and have a vehicle that operates within a small, bounded area? These areas can include smaller residential zones, work sites, and downtown business routes. This is the idea which Perrone Robotics is pursuing. It provides retrofit kits for cars, as well as patented software (Mobile Autonomous X, or MAX) that has been proven to work. More than 30 cars have traversed 36,000 miles in early tests.

The retrofit kit and software that Perrone Robotics makes work together in tandem to allow for any car to be rapidly outfitted. The business has shown success with this method in their early usage at the Fort Carson Army base and the Jacksonville Transportation Authority (JTA).

The market for autonomous vehicles and technology is growing, with various companies like Apple, Amazon, Intel, and GM all acquiring companies that specialize in self driving technology. Perrone Robotics has promising tech, but it has also been around for 17 years with relatively little to show for it. The company’s existing applications in the real-world show promise, but whether or not it is enough to make Perrone Robotics a strong investment opportunity remains to be seen.

Perrone Robotics’ current Wefunder raise has been rated as a Neutral Deal by the KingsCrowd investment team.

Price

Perrone Robotics’s current raise has them valued at a $59.2 million valuation cap with a 15% discount. This valuation seems very speculative, as the company has only seen $17 million in sales over their entire 17-year history. This high valuation may scare off potential value investors, as Perrone Robotics will have to grow considerably to justify this valuation. For this reason, the company’s price score is its lowest across all five metrics.

Market

The autonomous car market is undoubtedly going to grow at a rapid rate, as we now have many companies spending exorbitant amounts of money on the technology. There were an estimated 6.7 thousand self-driving cars in use in 2020, but this is set to grow to 4.2 million by 2030. This would put the market at a CAGR of 63.1% from 2021-2030.

Capital is being injected into the industry at increasing rates, as well. Amazon bought autonomous vehicle company Zoox for $1.2 billion, Intel acquired Mobileye in 2017 for $15.3 billion, and Volkswagen invested a total $2.6 billion into Argo AI and its self-driving technology. These recent mergers and acquisitions may make Perrone Robotics an attractive candidate to be bought – which give the company access to exponentially more funds, thereby scaling to market much faster.

As stated previously, the main issue with self-driving technology is taking it to scale – can truly self-driving cars out on the roads ever become the norm? Luckily for Perrone Robotics, this is a question that it need not worry about. The company focuses on lower risk locations to employ its technology. This approach may limit its exposure to the entire autonomous vehicle market, but does lower the company’s liability. It also has allowed Perrone to take its product to market faster – as seen by the existing partnerships with the Fort Carson Army base and the JTA.

However, despite these early successes, it’s unclear if there will be substantial demand for autonomous vehicles in such limited geographic areas. The inherent flexibility offered by a car — being able to drive anywhere within fuel range — is not available with Perrone’s vehicles. These market uncertainties balance out the strong market growth that autonomous vehicles are seeing at large. As a result, Perrone Robotics received a slightly below average market score.

Team

Perrone Robotics was founded by Paul Perrone, who also acts as the CEO. Mr. Perrone is the inventor of the company’s MAX software, which he patented all the way back in 2006. He has been a force in the autonomous vehicle space for close to two decades – with experience going back to participating in the DARPA Grand Challenge competitions of 2005 and 2007. With 17+ years in the autonomous vehicle industry (even going so far as to create the revolutionary tech that his company offers), experience with running a business, and an intricate knowledge of the technology, Paul Perrone is an extremely well-suited person to run the operations for Perrone Robotics. 

Another notable member of the team at large for Perrone Robotics is Nolan Bushnell. Bushnell is a part of the Board of Directors and previously was the founder of video game company Atari. Bushnell being on the Board makes sense once one realizes that some of his entrepreneurial ventures have included Etak, the first car navigation system whose mapping software is still the basis for car navigation systems today, and Androbot, a personal robotics company. Bushnell offers wonderful business experience as the founder of a massive, revolutionary company like Atari – but also clearly brings an understanding of navigation and robotics that will be invaluable to Perrone Robotics.

Due to Perrone’s deep industry experience — which is bolstered by advisors like Bushnell — the company’s team score is very strong as well as its highest across all five metrics.

Differentiators

The most difficult task for any autonomous driving technology will be allowing their vehicles to drive on the open road seamlessly. McKinsey and Company has estimated that while autonomous vehicles may be slightly disruptive between 2020-2022, full autonomy will not become adopted until (at the earliest) 2030. This forecast means that most other autonomous technology companies are running their business for the future — with few prospects for current market adoption.

This is the key difference that Perrone Robotics makes in its business plan. The company isn’t trying to make it so you can fall asleep on the road while driving from New York to Washington D.C. It aims to make autonomous vehicles that can reliably take someone over a relatively small area safely. The company operates in zones that have strict boundaries – like the army base at Fort Carson or the Jacksonville Transit Authority. These applications of its technology are already on the road and are being utilized. The company has even begun running its vehicles as a public shuttle in Virginia. Additionally, Perrone Robotics’ patented software helps to protect it from direct competitors. Thus, the company’s differentiators score is above average.

Performance

Perrone Robotics has seen its tech already performing on roads with real life applications. It has had successful product launches on the Fort Carson Army base, with the Jacksonville Transportation Authority, and as a public shuttle in Virginia. The company works with a Fortune 100 logistics company and its distribution center, providing autonomous vehicles.

Financially, the company hasn’t seen much success over its 17-year history. As of its most recent Form C filing, the business has $44.6K of cash on hand and an average expense sheet of $217K a month. Given that the company has managed to survive for 17 years, it doesn’t seem to be at risk for going under. However, consistent net losses don’t bode well for the future profitability of the company. Between 2018 and 2019, the company saw a decrease in revenue by nearly half — from just over $3 million in 2018 to $1.8 million in 2019. Its profit margin did increase — but it was from -$536K to -$428K.

If Perrone Robotics can maintain its recent revenue numbers and begin the move towards profitability, the company could provide a fair return to investors. Due to its promising early programs and recent revenue, Perrone Robotics has a strong performance score.

Bearish Outlook

The financial sheet has been working against Perrone Robotics for its entire existence — running in the red despite its impressive tech. Autonomous vehicles are still far away from being the norm, and Perrone Robotics may struggle to reach profitability as a result. On top of this, companies like Amazon and Apple are investing huge amounts of money into this technology, making Perrone Robotics less unique in the space.

There is also always the massive issue of liability. All it would take to put Perrone Robotics into an even deeper financial hole would be for one of its vehicles at Fort Carson, the JTA, or on the streets of Virginia to cause a serious accident. This would make people lose faith in the company and its technology, which would be a massive blow to the credibility and reputation of the business.

Bullish Outlook

Perrone Robotics has a founder and CEO in Paul Perrone that any company would be lucky to have at the helm. With the help and advice of Nolan Bushnell, this is a team that has all the tools for success. The company has a proven track record, with its product already in use in multiple locations.

With a market that is only continuing to grow (and rapidly), Perrone Robotics does look well positioned to grow its business. Its technology is patented and proven to work. The next step is scaling up towards profitability. The slight increase in Perrone Robotics’s net income may point to it being on the right path.

Executive Summary

Perrone Robotics operates in an industry that is set to grow exponentially in the coming years. It’s also one of relatively few companies that have real life, proven success of their product and technology. It has a strong leadership team and may be great candidates for M&A. However, the company has been around for 17 years and still can’t run in the black. The field is becoming crowded with competitors, and all it takes is one slip up on the roads for a Perrone Robotics car to set the business back. When looking at the entire picture painted by Perrone Robotics and its current Wefunder raise, the company remains a Neutral Deal at this time.

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

Analysis written by Ethan Thomas.

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Platform: Wefunder
Security Type: SAFE
Valuation: $59,200,000

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