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.

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.

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.

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.

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.

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.

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.

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.