The License Plate Redefined.
Raised to Date: Raised: $36,949
Rolling Commitments ($USD)
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As of January 30th, Vizrom has raised $20,750
Today we are reviewing the strengths and weaknesses of one of the latest deals on the StartEngine platform: Vizrom. The company’s goal is to redefine vehicle license plates by replacing traditional metal plates with electronic displays.
Vizrom believes that in these times of advanced technology, which are filled with smart and intelligent cars, license plates should also enter the 21st Century.
The electronic license plates will help users do away with the cumbersome process of renewing their vehicle registration at the DMV. The registration renewal can be processed automatically, by connecting the plate to a mobile application.
Along with the ease of registration renewal, Vizrom also envisions displaying information like expired registration, stolen status, amber alerts, parking validation, etc. Sounds pretty smart, doesn’t it?
The concern that we have with this innovation is whether there is a need for such technology. The process of registration renewal with the DMV is not that complicated and is infrequent. Even if one considers renewal to be an annoyance, it is one that happens only every few years.
Even assuming that there may be some target users for the product, the biggest drawback of this idea is that it is still in the development stage – it is completely untested. The prototypes have not been created, and regulatory approvals have not yet been received. We’d know that one of the last adopters of innovation is the department of motor vehicle so pushing this new tech onto an antiquated governance body will be challenging. Worse yet, each state manages their licensing a bit differently, which will lead to having to manage complications across states.
Below we dive in to Vizrom in detail. As always, investors must exercise caution and due diligence, before investing in early-stage companies.
Vizrom: Raising on StartEngine
1. Lack of Market Demand: Vizrom intends to simplify the tedious process of vehicle registration. However, the process itself is not complicated. DMV registration renewal can also be done online. Which begs the question: Why would users want to pay extra to get an electronic license plate for the same purpose?
The electronic license plate sounds technologically-advanced. However, near as we can tell, there is no existing need for the product. There is a wide array of modern gadgets that can offer similar features like geo-fencing, amber alerts, parking validation and toll payment. An electronic plate feels more like a cool tech with no real world application.
2. License Renewal is a once-every-few-years phenomenon: Vizrom is developing the product with the primary purpose of electronic and automatic renewal of vehicle registration with the DMV. Our concern with the objective is that registration renewal does not need to be done that frequently.
Depending on the state regulations, vehicle registration renewal must be done once every few years. A product that will be used only once every few years, in our estimation, does not sound very useful or promising. It certainly would not garner significant interest from the DMV to implement with minimal value add for end users.
3. Management Capability: Another serious concern with Vizrom is the company’s leadership. Emmanuel Umoh, Founder and CEO of Vizrom, only works part-time for the company.
Emmanuel has a full-time job as a Network Analyst with Renasant Bank. His lack of complete and undivided commitment raises serious doubts about the company.
Since his role as the Founder and CEO at Vizrom is not his primary job, it raises serious questions about what it means for investors. Does that mean that he is unsure of the future success of the company? Is he totally convinced of the concept? Will he be able to devote enough time and attention to his ‘part-time’ job, as well as his full-time job? And perhaps most importantly, when does he take the “leap” to full time entrepreneur?
4. Regulatory Approvals: The patent applications of the technology are still not approved. The utility provisional patent is pending, and no decision has yet been made regarding the non-provisional design patent. The survival of Vizrom is based on the approval of these patents, which may or may not happen.
Moreover, vehicle license plates are regulated by state authorities. Therefore, the use of these electronic license plates needs to be approved by the respective states. The process of receiving approvals from all the state regulatory bodies will be a time-consuming and complicated process. These authorizations may or may not be obtained.
Lastly, police need to see the license plate of a vehicle plate at all times. What would happen if the power on the electronic license plate fails? Many questions remain unanswered.
5. Pre-Product Investment: Vizrom is a brand new early-stage company with a brand-new product. The company does not have any operating history, revenues, clients or fully-developed products. Being pre-product adds an additional layer of risk that we do not think is baked into the current valuation. It is not clear whether investors will be able to receive an appropriate return on their investments.
The company is still developing its first prototype. A pilot program will follow the completion of first and second prototypes. It is only after the pilot program is completed that the company will enter the mass production phase.
Due to the lack of an obvious need from the marketplace, pending patent/regulatory approval, and uncertainty surrounding leadership we are assigning Vizrom an Underweight Deal rating.
We advise investors to perform strict due diligence before investing in Vizrom.
If you have any questions regarding the underweight rating of Vizrom, you can reach us at email@example.com.