SmartGurlz

SmartGurlz

Early Stage

Award-winning robotics and e-learning (Peloton Meets EdTech)

Award-winning robotics and e-learning (Peloton Meets EdTech)

Overview

Raised to Date: Raised: $376,422

Total Commitments ($USD)

Platform

Wefunder

Start Date

10/29/2020

Close Date

04/29/2021

Min. Goal
$50,004
Max. Goal
$534,996
Min. Investment

$100

Security Type

Equity - Preferred

SEC Filing Type

RegCF    Open SEC Filing

Price Per Share

$9.00

Pre-Money Valuation

$9,000,000

Rolling Commitments ($USD)

Status
Funded
Reporting Date

05/01/2021

Days Remaining
Funded
% of Min. Goal
Funded
% of Max. Goal
Funded
Likelihood of Max
Funded
Avg. Daily Raise

$2,068

# of Investors

647

Momentum
Funded
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Year Founded

2017

Industry

Education, Training, & Coaching

Tech Sector

EdTech

Distribution Model

B2C

Margin

Medium

Capital Intensity

High

Location

Arlington, Virginia

Business Type

High Growth

SmartGurlz, with a pre-money valuation of $9 million, is raising funds on Wefunder. It is an education technology company teaching girls and underserved minorities. The company makes coding products for kids, including robots, apps, and dolls that promote at-home learning with playing. Sharmi Albrechtsen founded SmartGurlz in 2017 and has raised over $2.8 million in previous rounds of funding. The proceeds of the current crowdfunding round, with a minimum target of $50,004 and a maximum target of $534,996, will be used for R&D, marketing, and general operations. SmartGurlz has generated over $2 million in revenue and proven itself during COVID-19. The platform has educated over 1,000 kids through e-learning during the pandemic.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$303,840

$381,870

COGS

$289,991

$247,442

Tax

$0

$0

 

 

Net Income

$-891,377

$-839,527

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$199,502

$30,123

Accounts Receivable

$290,101

$0

Total Assets

$627,664

$353,986

Short-Term Debt

$915,182

$961,218

Long-Term Debt

$1,725,543

$514,452

Total Liabilities

$2,640,725

$1,475,670

Financials as of: 10/29/2020
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Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
SmartGurlz 04/29/2021 Wefunder $9,000,000 $376,422 Equity - Preferred Funded RegCF
SmartGurlz 12/08/2019 Wefunder $7,000,000 $908,864 Convertible Note Funded RegCF
SmartGurlz 06/28/2018 SeedInvest - $619,535 Debt Funded RegCF / RegD 506(c)
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Ratings KingsCrowd Startup Rating Methodology Article

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Analyst Report Analyst Report Methodology Article

Synopsis

More women and girls are engaging in STEM fields —Science, Technology, Engineering, and Math — than ever before. Nevertheless, the proportion of female-to-male engagement with STEM career fields remains shockingly low. In 2013, women made up just 26 percent of the computing workforce and just 12 percent of working engineers. Educational statistics tell a similar story. In college computer science coursework, women make up only 18 percent of bachelor’s degree holders — and in engineering, only 20 percent. Some of those numbers have actually decreased since the 90s. This is a huge problem — not only because the higher-economic power of STEM workers leads to a disparity of influence between genders. Studies have also shown that including women in STEM fields leads to better outcomes in science and product development. On top of that, as the world’s need for STEM workers grows, positions are difficult to fill with qualified workers.

This disparity has numerous causes, but perhaps the most significant is that most girls simply choose never to go into STEM in the first place. The gender stereotype that girls are bad at math leads not only to girls believing their abilities are inferior, but also to their teachers and mentors believing the same and grading them more harshly in mathematical fields. This leads girls to lose confidence in their capacity for skills important in STEM fields. 

Members of ethnic minorities face similar stereotypes, particularly black and hispanic people. While many Americans consider ethnic minorities in the workforce to be important, studies show that, black and hispanic people leave STEM majors in college at twice the rate of white students. This can intersect with gender stereotypes, with groups like black women facing crippling underemployment in STEM fields. 

SmartGurlz is working to change that. Founded by a mother who was frustrated with the lack of educational, science-based toys for her daughter, the company produces robotic dolls that can teach girls to code through a companion app. The toys are meant to inspire further interest in the kinds of fields that lead to STEM careers, like robotics. Their dolls are ethnically diverse and give girls visual representations of women succeeding in math.

In addition to their product lineup of dolls, SmartGurlz approached the challenges of this year’s COVID-19 pandemic with their virtual “Smart Buddies” learning camp, which taught 1,000 children to code. Smart Buddies — a venture co-created with Pitsco Education — is a program that’s aimed at educating girls and boys alike in science, with an emphasis on diversity.

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

Next Section: Price

Price

SmartGurlz is raising at a $9 million pre-money valuation, without discount. The valuation reflects the company’s diversifying business offerings and bolstered reputation from appearances on various media outlets. This raise is a follow up on two small-scale seed rounds in 2019, the latter of which had a pre-money valuation of $7 million. The price increase is significant, in spite of the fact that gross margins and revenue both decreased last year. SmartGurlz’s price rating is therefore relatively low.

Next Section: Market

Market

As primarily a toy manufacturer, SmartGurlz enters into a market that has experienced growth in recent years. From 2015 to 2018, the industry grew at an annual rate of 3.9%, with total 2018 sales of $1.6 billion. The pandemic has transformed the industry in ways that may offer openings for SmartGurlz over traditional toy retailers. As manufacturers that focus on film-based toys face revenue declines from delayed film productions, overall toy sales—particularly through online shopping—are increasing as parents resort to toys to occupy children stuck at home. However, it is still worth noting that educational toys are a smaller subset of the general toy market.

As a producer of toys marketed to girls — which uniquely address modern parents’ concerns about diversity and STEM education — SmartGurlz is uniquely positioned to carve an expanding niche for itself in this market. Furthermore, girls’ toys emphasizing STEM are becoming increasingly popular. The dolls are relatively expensive, however, coming in at a $100 price tag. Cheap imports of toys along with decreased levels of disposable income from COVID-19 might threaten future sales. Additionally, SmartGurlz faces much more established competition who could easily pivot to offer a similar product. As a result, the company’s market score on the lower end of the spectrum.

Next Section: Team

Team

SmartGurlz is led by a strong team with. Sharmi Albrechtsen, CEO and co-founder, at the helm. Albrechtsen is a fellow at New York University and holds an MBA from the Copenhagen Business School. She has almost a decade of experience raising millions in grants for nonprofit organizations with the Ida Institute and has made a career for herself managing PR and communications. Her hard work to promote SmartGurlz has paid off, perhaps most significantly with an appearance on NBC’s popular show Shark Tank in late 2017. 

Co- founder Jesper Nissen serves as the company CTO and a member of the board. Nissen has decades of experience in tech industries, including VP of Operations with Weibel Scientific. Finally, Martin Pidel serves as CMO, building on years of experience working with the education and toy industries—including three years as the VP of Global Brand Marketing at Hasbro, an industry giant. 

Overall, the SmartGurlz team has strong industry experience. However, there is little past entrepreneurial experience among the co-founders, and the team has not worked together on past projects. Balancing this against industry expertise, SmartGurlz’s team score is middle-of-the-road.

Next Section: Differentiators

Differentiators

While toys marketed to girls interested in STEM are growing more popular, major manufacturers of dolls and toys have yet to clamp down firmly on the market. Other dolls are just that: dolls, possibly with STEM-based accessories. However, SmartGurlz dolls are explicitly robotic and intended to teach coding and robotics to girls. The toys are also notably diverse, which may increase their target audience. These points would seem to serve as strong differentiators — however, it is not inconceivable for a competitor to produce a toy very similar to that of SmartGurlz. There are no patents or other intellectual property protecting the company’s products. Additionally, the hefty price tag on the dolls differentiates them in a way that does not help SmartGurlz attain new customers. Therefore, SmartGurlz’s differentiators score is its lowest.

Next Section: Performance

Performance

SmartGurlz has had mixed success in recent years. While the company enjoyed a “bumper year” in 2017 with its Shark Tank appearance, revenue declined in 2019 — from $381,870 in 2018 to $303,840. That said, its new product has already sold out, and the company has experienced consistent growth overall. It plans to increase consumer sales to nearly $16 million by 2023, and its licensing offerings are growing as well. The launch of their Smart Buddies program also appears to have been successful despite the challenges of remote learning, and may result in significant revenue increases over the next few years. SmartGurlz’s high performance score is a reflection of this positive growth.

Next Section: Other

Bearish Outlook

Investors should be wary of SmartGurlz recent revenue decreases, which indicate trouble ahead as the global pandemic affects the market in uncertain ways. Investors should also note that SmartGurlz holds more than $1.6 million in short-term debt and nearly $300 thousand in long-term debt. Neither these debts nor the revenue decreases are explained in SmartGurlz’s raise materials, which might indicate financial difficulties yet to be disclosed. The lack of transparency is concerning, and might hinder the company as cheaper imported toys continue to flood the market.

Next Section: Bullish Outlook

Bullish Outlook

SmartGurlz holds a unique product, with powerful messaging that addresses a clear cultural need. If it hits the target minimum, the company will have 12 months of runway — reducing risk for investors and giving time for sales expansion. Furthermore, the company’s partnership with Pitsco to create the Smart Buddies Program comes at a time where education—particularly distance learning—are an economic priority. While the launch into the school system has been put on hold, 10 schools in Florida and Texas have been through the pilot program, which could translate to a significant entry into a $40 billion school market in 2021. Deals with school systems and licensing revenue could increase overall revenue by tens of millions of dollars in the next few years.

Next Section: Executive Summary

Executive Summary

SmartGurlz is a toy company, manufacturing robotic dolls for girls to increase their engagement in STEM education and combat gender stereotypes. The dolls — riding on scooters and controlled through the companion “Sugar Coded” app for phones and tablets — teach girls how to code through games and lessons. SmartGurlz has also partnered with an education company to create the Smart Buddies Program, intended to teach thousands of young boys and girls how to code with a strong emphasis on diversity of representation.

While sales have been significant and the leadership is strong, there are worrying signs in the company’s recent past. Revenue and gross margins went down last year, and high levels of short-term debt have not been explained in public documents. With shifts in the market and possible undisclosed financial problems, SmartGurlz and Smart Buddies might fail to expand their revenue enough to grant investors significant returns. Therefore, SmartGurlz has been rated 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 Benjamin Potts.

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SmartGurlz on Wefunder
Platform: Wefunder
Security Type: Equity - Preferred
Valuation: $9,000,000
Price per Share: $9.00

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