Tanoshi

Growth Stage

Providing an equitable digital education for every child

Analytics

Raised to Date: Raised: $78,119

Aggregate Commitments $

Platform

StartEngine

Start Date

05/05/2021

Close Date

11/01/2021

Min. Goal

$9,999

Max. Goal

$1,069,998

Min. Investment

$249

Security Type

Equity - Common

Funding Type

RegCF

Series

Pre-Seed

Pre-Money Valuation

$30,000,000

Rolling Commitments $

Status

Active

Reporting Date

10/21/2021

Days Remaining

11

% of Min. Goal

781%

% of Max. Goal

7%

Likelihood of Max
unlikely
Avg. Daily Raise

$462

Momentum
cold
Log in or create a free account today to gain access to KingsCrowd analytics.
Location

Oakland, California

Industry

Education, Training, & Coaching

Tech Sector

EdTech

Distribution Model

B2C

Margin

Low

Capital Intensity

High

Business Type

Growth

Tanoshi, with a pre-money valuation of $30 million, is raising crowdfunding on StartEngine. The company makes fun and educational learning products to make digital learning accessible to all students despite socioeconomic barriers. Tanoshi Computers are designed to be the right size for kids with enough parental controls and educational content. Brad Johnston, Lisa Love, Josh Traub, and Greg Smith founded Tanoshi in 2016. The current round of crowdfunding has a minimum raise of $9,999 and a maximum raise of $1,069,998, and the funds will be used for growth and expansion. Tanoshi has generated over $2.5 million in lifetime revenues and has sold over 10,000 computers.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$1,046,879

$442,248

COGS

$758,050

$313,174

Tax

$800

$44

 

 

Net Income

$-115,567

$-2,785

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$371,328

$105,220

Accounts Receivable

$42,700

$14,158

Total Assets

$489,685

$273,064

Short-Term Debt

$722,827

$390,639

Long-Term Debt

$0

$0

Total Liabilities

$722,827

$390,639

Financials as of: 05/05/2021
Log in or create a free account today to gain access to KingsCrowd analytics.

Upgrade to gain access

Pay Monthly
Annually (Save 17%)

Starter

$8.33 /month
billed annually
Free portfolio tracking. Limited reports and filters.
Plan Includes:
Everything in Free, plus
Advanced company search ( limited filters)
Founder profiles and exclusive webinars
2 Analyst Reports per month
Get Starter Annual

Pro

$25 /month
billed annually
Unlimited analyst reports and market analytics.
Plan Includes:
Everything in Starter, plus
Full access to all Analyst Reports
Filter on Staff Picks (e.g. Top Deal, Deal to Watch, etc.)
Market Analytics
Get Pro Annual

Merlin

$41.67 /month
billed annually
Full site access including Merlin ratings.
Plan Includes:
Everything in Pro, plus
Search and filter companies by Merlin ratings
Company specific Merlin rating and risk assessment
Get Merlin Annual
Already a member? Log in here.

Ratings

Analyst Report

Synopsis

To benefit from online learning opportunities and tech-centric education, students need computers and access to the internet. The COVID-19 pandemic has made this clear. According to data from the National Center for Education Statistics, more than 9 million schoolchildren in the US (out of around 56 million) faced difficulty in completing online assignments during school shutdowns. 

Research shows that online instruction is only effective for students with consistent access to computers and the internet. While decreases in student learning were thankfully less severe than anticipated, student performances did suffer. These learning disparities were heightened among poor and minority students. It is simply impossible for students to maintain high standards of learning without consistent access to the necessary technological tools. At the same time, giving students unfettered access to the internet is impractical and runs the risk of exposing them to online data-collectors and predators.

Tanoshi aims to bring public education into the 21st century and a post-COVID world with educational computers and materials. Tanoshi computers are child-sized, include age-appropriate learning programs, and come equipped with free and accessible parental controls to keep students safe. The computers work online and offline, and their moderate price point makes them affordable for both families and schools.

Tanoshi’s gross margins are increasing year over year, and its products have reached bestseller status on Amazon and Walmart. It released its initial product, the “2-in-1,” in 2018 at a price point of $200 and launched the Scholar model in late 2020 at $300 per unit.

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

Price

To grow and expand its product offerings, Tanoshi is raising capital through an offering of common equity at a pre-money valuation of $30 million. This would be a reasonable valuation for a hardware company on its own. However, Tanoshi is confined to the niche market space of educational technology and has little in the way of growth despite a significant increase in valuation (less than a year ago, Tanoshi was valued at $6.3 million). Therefore, the startup is overvalued in this raise. Tanoshi’s current revenue multiple sits around 28.7 times, which doesn’t do enough to improve its price rating.

Market

While Tanoshi aims for the decent-size educational technology market on its raise page, its applicable market is the far smaller US educational PC market. Competition is also stiff, with Google’s affordable  Chromebook being the most dominant player. But the market is growing at a respectable CAGR of 13.31%, which is certainly encouraging.

Team

Tanoshi has a team of several strong founders mostly from education backgrounds, though there are some gaps in expertise. CEO Brad Johnston holds a master’s degree in commerce from the University of Sydney Business School. After teaching English as a second language, Johnston migrated to market research and product management for big names in the laptop industry, such as Toshiba and Vizio. He brings valuable experience on the product management side, although he is not a developer.

Chief Marketing Officer Lisa Love has an MBA in marketing from Clark Atlanta University. After getting her start in brand management for big food companies Heinz and Del Monte Foods, she moved into the startup game managing the retail side of Wine.com and co-founded an animated educational app that won gold from Mom’s Choice Awards. After this, she leaned into her marketing skills as a freelancer, work she still continues today. While she obviously has some level of experience with educational materials through developing Bing Note, her strengths appear to lean more towards the marketing side of the business.

Chief Operating Officer Kate Traub holds a Master of Laws degree from Santa Clara University School of Law, among other advanced degrees. After working her way through the requisite legal internships, Traub spent some time in education working as a teacher for Kaplan Test Prep. She moved back into law as a transactional attorney before starting her own legal firm to protect creatives and small businesses.

Other founders appear to have stepped back from their roles with the company or are working part time. While the team does cover multiple areas of expertise, there are noticeable absences of experience in actual product development as well as supply chain management.

Differentiators

Tanoshi faces significant challenges as it attempts to secure its place in the narrow educational PC space. Competition is fierce, as Google, Apple, and Intel fight to be among the first brands students adopt. Margins tend to be quite low, as these massive corporations are happy to offer generous student discounts in exchange for securing lifelong consumers of their other products. Tanoshi isn’t a particularly high-quality offering in comparison to the competition. However, it does narrowly beat competitors in price, barely edging out Google’s Acer Chromebook and establishing thin margins of 29%. Even so, these products are very expensive for the low-income families Tanoshi aims to support, especially as a product for children. Tanoshi holds no patents, leaving it with slim to no defensibility.

Performance

Tanoshi has slowly but steadily grown its revenue over time while responsibly managing its finances and increasing margins. In 2020, it took in $1 million in revenue, up from $442,248 the year before. Short-term debt has risen from $390,639 to $722,827, but it still holds no long-term debt and has considerably more cash on hand.

Despite forming no partnerships, Tanoshi has managed to sell 10,000 units through distribution by Amazon and Walmart. It has also generated positive media coverage over time with a somewhat-successful appearance on ABC’s Shark Tank and coverage from Forbes and Mashable. In prior fundraising, Tanoshi took in around $180,000. While still pre-profit, it has two products on the market and has shown consistent growth — if less than might have been expected in a year when most American schools switched to remote learning. This might be due to supply shortages, as the product has sold out several times.

Risks

While Tanoshi’s price point is low, the product itself is not significantly differentiated from the competition, nor is it protected by patents. Given that quality is not a selling point in this market and Tanoshi is likely to face more significant supply challenges than its competitors due to its small size, it faces significant risk of competition pricing it out of the market.

Bearish Outlook

Tanoshi’s mission is unquestionably charitable and has the potential to transform the lives of young people, but investors have cause to be concerned about the product. A little-differentiated product is highly vulnerable to being edged out by competition. Big brands are known to take losses in certain markets to secure future consumers and generate positive reception. Tanoshi cannot afford to take losses in its only market. Its growth is slow, and its overvaluation presents poor terms for investors.

Bullish Outlook

Despite being up against massive competitors in a small space, Tanoshi has generated decent traction. Selling 10,000 units is no small feat in this limited market. Additionally, positive media coverage through philanthropic donations and media appearances appear to be doing an apt job of generating consumer goodwill. While other competitors do have an interest in securing brand loyalty at an early age, this market is not vital for them. As Tanoshi lowers its costs of acquisition and product margins, it has sufficient room to emerge as a friendly underdog to support public education.

Executive Summary

Tanoshi, named after the Japanese word for “fun,” is narrowing the technology divide for schoolchildren with its affordable educational PCs. It currently offers two products: the 2-in-1 and the Scholar, which both offer online and offline educational activities for students. With the aid of philanthropists, Tanoshi has also donated a significant number of computers to schoolchildren. It received the 2019 Silicon Valley Educational Foundation Innovation Award and appeared on ABC’s Shark Tank, where it secured a $500,000 deal with host Daymond John.

Tanoshi has decent traction in a niche space, taking in increasing revenue over time and generating positive publicity. Its customer acquisition costs are decreasing, and the company has avoided taking on long-term debt. However, it is operating in a very narrow market where price is often the sole concern. The product is not significantly differentiated from more prominent brands, and Tanoshi appears overvalued considering its moderate growth and market position. Therefore, Tanoshi 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 Benjamin Potts.

Other Deals

Responsum Health on Republic 2021

The company has created free and disease-specific apps to provide support and knowledge to people with chronic conditions. The apps…

Valuation Cap: $4,500,000
Min Investment: $100
Industry: Healthcare & Pharmaceuticals
Raised $56,226 of $1,070,000 max
RegCF

Curastory on Republic 2021

The Curastory platform allows creators to monetize their video content by uploading their video content on the platform and generating…

Valuation Cap: $9,000,000
Min Investment: $250
Industry: Media, Entertainment & Publishing
Raised $392,127 of $535,000 max
RegCF

Koning on Republic 2021

The Koning Breast CT creates high-contrast 3D breast images with high spatial resolution and no painful compression. Dr. Ruola Ning…

Valuation Cap: $200,000,000
Min Investment: $100
Industry: Healthcare & Pharmaceuticals
Raised $636,653 of $5,000,000 max
RegCF

Create your first portfolio

Create your very own investment portfolio on KingsCrowd.

Now you can track all of your startup investments in one place utilizing our state-of-the-art portfolio tracker tools. To begin, create your first portfolio below.

Add to portfolio
Tanoshi on StartEngine
$
Platform: StartEngine
Security Type: Equity - Common
Valuation: $30,000,000

Follow company

Follow Tanoshi on StartEngine