UpChoose

Early Stage

Reimagining consumption, starting at birth

Analytics

Raised to Date: Raised: $282,220

Aggregate Commitments $

Platform

Republic

Start Date

12/04/2020

Close Date

04/30/2021

Min. Goal

$25,000

Max. Goal

$1,070,000

Min. Investment

$100

Security Type

SAFE

Funding Type

RegCF

Series

Pre-Seed

Valuation Cap

$8,000,000

Discount Rate

20%

Rolling Commitments $

Status
Funded
Reporting Date

05/02/2021

Days Remaining
Funded
% of Min. Goal

1,129%

% of Max. Goal

26%

Likelihood of Max
Funded
Avg. Daily Raise

$1,920

Momentum
Funded
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Location

San Francisco, California

Industry

Apparel & Fashion

Tech Sector

CommerceTech

Distribution Model

B2C

Margin

High

Capital Intensity

High

Business Type

Growth

UpChoose, with a valuation cap of $8 million, is raising crowdfunding on Republic. The company has leveraged technology to create a frictionless experience for consumers and a simpler life for parents. The first release of UpChoose is a smart clothing service for babies that sends a curated set of organic clothing essentials for babies at each stage of growth. The clothing sets can be swapped as the baby sizes up. Ali El Idrissi founded UpChoose in July 2017. The current crowdfunding round has a minimum target of $25,000 and a maximum target of $1,070,000, and the proceeds will be used to build the infrastructure required to handle growth, expand the team, invest in marketing, and develop the tech platform. UpChoose has over 750 customers in 180 cities and reported a 300% year-to-year growth.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$51,568

$18,063

COGS

$12,081

$14,677

Tax

$0

$0

 

 

Net Income

$13,064

$-42,828

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$17,008

$19,355

Accounts Receivable

$0

$0

Total Assets

$53,732

$33,613

Short-Term Debt

$4,174

$0

Long-Term Debt

$0

$0

Total Liabilities

$4,174

$0

Financials as of: 12/04/2020
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Ratings KingsCrowd Startup Rating Methodology Article

Analyst Report Analyst Report Methodology Article

Synopsis

The USA accounts for 4% of the world’s population yet produces 12% of the world’s global waste. There are numerous reports showing that today’s consumers are consciously choosing more sustainable brands or products, especially millennials. Unfortunately, there is still an incredible amount of waste happening — whether it be food waste or product waste. When you factor in parents who must choose between a myriad of products at multiple different ages, the amount of goods that are then wasted is massive.

UpChoose is reimagining consumption for new parents with its subscription service that curates sets of clothes that fit a new parents’ needs at a flat monthly fee. In order to make the service more accessible, it also created a “GoFundMe-like page” that allows anyone to receive gift contributions.This would mean parents could potentially clothe their children not only less wastefully but more affordably.The kicker here is when a child is ready to size up, parents can swap sets at no extra cost. Returned sets are then made available to the next family (if they want to use used sets). The startup is currently targeting a large market in children’s clothing but also has plans to tackle different “stages” of an individual’s life. UpChoose has been entirely bootstrapped to date and will use the current raise to handle company growth, build its team, continue developing the technology, and more.

UpChoose’s current Republic raise has been rated a Deal to Watch by the KingsCrowd investment team.

Price

UpChoose is raising a SAFE with an $8 million valuation cap and a 20% discount. This valuation is reasonable both in comparison to other startup campaigns and in context of the company’s revenue numbers. Thus, UpChoose’s price score is its highest across all five metrics.

Market

The US children’s clothing market is a fast growing segment of the apparel market. However, it’s important to note that the startup mentions it intends to cover the first 12 years of life. Given the sub-segment of children’s clothing, that should reduce the size of the target market. That said, UpChoose earns an above average market score given the startup is appealing to a segment of the large market.

Team

UpChoose founder Ali El Idrissi has an incredibly strong educational and work background. Idrissi has a BA in Philosophy from La Sorbonne and a Master’s of International Affairs from Po Paris. He also has a Master’s of International Affairs from Columbia University. His work background has focused heavily on impact investing at Columbia University and the Department for International Development for the UK Government. He was also a vice president at J.P. Morgan, focusing on impact investing and social finance. His cumulative years of relevant experience grant Idrissi a particularly strong background running a startup focused on sustainability. The rest of the team is a diverse and well-rounded group with specialties ranging from data, operations, technology, and more. The above points aggregate into a very solid team score for UpChoose.

Differentiators

UpChoose’s moderately above average differentiation score makes sense given there are other businesses doing something similar to UpChoose. A startup does not, however, need to be a first mover to be successful. UpChoose has refined the subscription model for baby clothes. Not only is the startup’s offering of higher quality than others, but it’s also cheaper. Its gift contribution option creates an opportunity for even more affordability, as well. 

Although not a first mover in the space, UpChoose has refined and simplified the process for new parents by being higher quality and cheaper than competitors. Taken all together, the startup received a better-than-average score.

Performance

Although UpChoose’s Form C states 2019 revenues to be $51,568, the company has achieved over 300% growth YTD meaning 2020’s revenues are a little more than $200,000. Although an impressive growth number, investors should consider that the startup has been around since 2017. It should ideally have more traction given three years, but it also takes time to build a technology platform and more. Despite Ali El Idrissi being a founder with good experience, he has had no formal fundraising experience because UpChoose has been bootstrapped thus far. Given capital and fundraising is the lifeblood of an early stage venture, investors should note if Ildrissi can successfully raise multiple rounds of capital from crowdfunding investors as well as institutional investors. On a positive note, the company does have partner clothing brands including Levi Strauss & Co. These factors culminate in a strong performance rating for UpChoose.

Bearish Outlook

New parents may not use UpChoose’s services, especially parents with multiple children, as their children can use hand-me-downs from their siblings. Additionally, consumers in general may not be ready to buy used clothing for their children. Lastly, UpChoose may not be differentiated nor defensible enough to stand out in the eyes of consumers, thus removing any perceived advantage the company may have.

Bullish Outlook

UpChoose offers investors attractive terms with its $8 million valuation and 20% discount rate. The company has also seen growing revenue, and it has reached early profitability. This stage is especially impressive given that UpChoose has been entirely bootstrapped until this point. With a significant inflow of capital, the business could be primed for major growth. That success will allow the company to expand its services into marriage and moving out. Lastly, although this is founder Ali El Idrissi’s first venture, he has proven to be an excellent founder-CEO thus far.

Executive Summary

UpChoose has been rated a Deal to Watch. There are numerous reasons to believe in UpChoose. It is better quality and cheaper than the traditional way of purchasing children’s clothes. The company has shown strong growth year-over-year despite a pandemic. The founder has a strong educational and professional background, and his team is also well-rounded. Amongst all the positives mentioned, the company’s mission of reducing waste in a smart way is an immense strength as well. 

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

Analysis written by Francis Vu.

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UpChoose on Republic
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Platform: Republic
Security Type: SAFE
Valuation: $8,000,000

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