ThinOptics is offering preferred equity at a $29.2 million valuation. That’s a surprisingly reasonable price for a company with this much traction. ThinOptics’ revenue was more than $8.8 million last year, so a $29.2 million valuation represents a roughly 3.3x revenue-to-valuation multiple. That low multiple is made even more attractive given ThinOptics’ long operating history of more than $100 million of lifetime sales. Many companies raising equity crowdfunding rounds don’t offer such reasonable terms.

The global market for reading glasses is decent-sized. The market was measured at $34.92 billion in 2018 and was expected to grow annually by 5.4% over the following eight years. By 2026, the global market is projected to reach more than $53 billion. 

ThinOptics’ main line of business fits into that reading glasses market, but the company also plays in adjacent markets like sunglasses and blue light blockers. The sunglasses market alone adds an additional $17 billion to ThinOptics’ total addressable market size. 

ThinOptics has already established international distribution and has garnered more than $100 million in sales over the last 11 years. With a clear product-market fit in a steadily growing industry, ThinOptics has good market potential. 

ThinOptics was founded by Gadi Ponte, who currently runs the company as CEO. (It appears that ThinOptics had other co-founders in its early days, but Ponte remains in current leadership.) Ponte has more than two decades of business experience. He previously served in manufacturing and operations roles at a variety of companies, including six years at SanDisk. Ponte also founded a supply chain and manufacturing consulting business before launching ThinOptics. He has since held successive roles at ThinOptics, from vice president (VP) of operations to CEO. 

The ThinOptics team also includes VP of Demand Generation and eCommerce Marketing Yarra McClureand VP of Finance Wendy Barnao. McClure is relatively new to the ThinOptics team but has more than twenty years of marketing experience. She most recently served as the VP of digital, marketing, and revenue at Livie & Luca, a children’s shoes brand. Barnao has worked as ThinOptics’ VP of finance for seven years. Prior to ThinOptics, she worked for more than twenty years in accounting and business management. ThinOptics also has an influential board of directors, including advisors who have sold businesses to Nestlé, served on the board of Peloton, and more.  

The ThinOptics team is relatively small for the company’s level of revenue, and the business could probably benefit from a wider breadth of experience across industrial design and sales. However, ThinOptics has deeply experienced executives at the helm and many other impressive advisors on its board, forming a strong team.

ThinOptics developed an innovative reading glasses design that fastens to the back of smartphones, keeping glasses nearby and minimizing frustration. The company has carved out a solid market position with this marquee product. Based on more than 9,000 reviews on Amazon, consumers seem to agree that ThinOptics glasses are convenient. 

While ThinOptics’ unique design is notable, the company’s sizable patent portfolio is even more impressive. The company has been granted 12 patents, and 14 more applications are pending. This intellectual property protects ThinOptics from direct rip-offs, though numerous other eyeglasses brands claim to offer similar convenience with their lens products. 

Many consumers consider reading glasses a commodity and may not seek out one brand over another when purchasing their latest pair of lenses. However, ThinOptics does benefit from compelling selling points that set it apart from traditional eyeglass brands, and the company is protected with a number of patents. Therefore, its differentiation is relatively strong. 

ThinOptics is a growth-stage company with more than $100 million in lifetime revenue. That’s impressive, particularly for a company with a relatively low-value product. ThinOptics has sold more than five million units in the last 10 years, and it claims the honor of being Amazon’s top reading glasses company. It’s clear that ThinOptics products resonate with the market. 

However, it’s important to recognize that ThinOptics has been around for a decade, and growth seems to be slow or even stalling. In 2019, ThinOptics brought in more than $9.4 million in revenue. Revenue dropped to $8.8 million in 2020. The company had less than $10 million in revenue in recent years but more than $100 million in lifetime revenue since 2010. It seems as though ThinOptics has brought in roughly the same amount of annual revenue for many years (or perhaps generated much more annual revenue earlier in the 2010s). 

ThinOptics’ balance sheet also reveals concerning levels of debt. The company is carrying more than $2 million in short-term debt and more than $8.5 million in long-term debt, for total liabilities of $10.7 million. That’s a great deal of debt for a business of this size. This debt could be related to struggles that ThinOptics may have had in the past. Hints in CEO Gadi Ponte’s bio seem to indicate that the company was on a worse trajectory before he took over as chief executive. 

ThinOptics is performing very well relative to most young companies. However, prospective investors should be mindful of slowing growth and large debt on the company’s balance sheet. The business does not seem to be in an explosive growth phase at this time.

ThinOptics is a relatively low-risk investment, given its long operating history and impressive lifetime revenues. The biggest risk that prospective investors should consider can be found on ThinOptics’ balance sheet. More than$10.5 million in liabilities is no small problem. It’s not clear that ThinOptics has the capital to invest more in customer acquisition at the same time it pays down its debts, which could pose significant risk to the business.

ThinOptics is a well-established company with thousands of positive customer reviews on Amazon and more than $100 million in lifetime revenue. Most startup founders would envy metrics like those. However, it’s important to recognize that ThinOptics has been around for 11 years. In that time, it seems that growth has slowed rather than quickened. In fact, revenue declined by more than $500,000 between 2019 and 2020. 

Slowing growth may reflect ThinOptics’ inability to expand beyond its primary thin reading glasses product. While the product design does seem innovative, it’s not clear that there’s a large enough market for it to support steady growth. The market for reading glasses is extremely competitive, particularly because many consumers consider reading glasses to be an inexpensive commodity. The path to strong growth isn’t abundantly clear for ThinOptics, which is particularly risky with more than $10.5 million in debt on the balance sheet. Even at this round’s low valuation, investors might be concerned that ThinOptics will never provide a return on investment. 

ThinOptics has accomplished a great deal of success in a decade. The company has developed innovative, patented product designs, secured a reliable supply chain and international distribution operation, and generated more than $100 million in revenue. A quick Google search reveals that ThinOptics is a leader in thin, convenient reading glasses, with more than 9,000 reviews (at a 4.5 star average rating) on Amazon for just one product. 

It’s clear that ThinOptics needs to continue innovating to drive continued growth. However, the company has already proven the ability to develop, launch, and scale products in the eyewear industry. Prescription glasses could benefit from similar convenient designs, and adjacent products like sunglasses still appear to have a ways to go in terms of innovation. ThinOptics is focused on increasing lifetime value for customers and is already in a strong spot with a 30% repurchase rate. With even more exciting product launches, ThinOptics has the potential to continue scaling.

ThinOptics is an eyeglasses company selling patented, ultra-thin reading glasses that attach to the back of smartphones. With these efficient, reliable reading glasses, ThinOptics hopes to eliminate the frustration of juggling multiple pairs of reading glasses scattered across the home or office. The pitch seems to be working. ThinOptics has generated more than $100 million in revenue over the last decade with strong customer reviews and a healthy repurchase rate. The company also benefits from a sizable market opportunity, a strong team, and a fair valuation.

On the other hand, ThinOptics’ growth seems to be slowing. Revenue declined between 2019 and 2020, and ThinOptics doesn’t offer many specifics about growth plans from 2021 forward. Increased revenue is essential given the $10.7 million in debt that ThinOptics is carrying on the balance sheet. Stalled growth and large liabilities could indicate operational hiccups in ThinOptics’ past, which may raise red flags for investors. While ThinOptics has convenient designs and many patents under its belt, consumers may not be as picky with over-the-counter glasses and could see the company as one of many similar options. Therefore, ThinOptics 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 November 12, 2021.