Vroom Solar

[Closed for Investment] Vroom Solar, with a valuation of $15 million, is raising funds on StartEngine. The company makes do-it-yourself solar energy kits for portable applications. Vroom Solar’s off-grid DIY solar energy kits are expected to produce five to ten times the output of traditional battery-based portable energy systems and are more cost-effective and sustainable. The product is currently in development, and the company is pre-revenue, with the proof of concept and prototype already established. Luke Phelps founded Vroom Solar in September 2017. The current crowdfunding campaign has a minimum target of $14,993.47 and a maximum target of $617,989.53. The campaign proceeds will be used for research and development, operations, working capital, and inventory.

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Investment Overview

Raised this Round: Raised: $68,832

Deal Terms

Total Commitments ($USD)

Platform
StartEngine
Start Date
06/19/2024
Close Date
09/18/2024
Min. Goal
$14,993
Max. Goal
$617,990
Min. Investment

$252

Security Type

Equity - Common

Series

Seed

SEC Filing Type

RegCF    Open SEC Filing

Price Per Share

$16.79

Pre-Money Valuation

$14,995,837

Company & Team

Company

Year Founded
2017
Industry
Energy, Power, & Natural Resources
Tech Sector
Cleantech
Distribution Model
B2B2C
Margin
Medium
Capital Intensity
High
Location
Springfield, Missouri
Business Type
Growth
Company Website
Visit Website

Team

Employees
6
Prior Founder Exits?
No
Founder Name
Luke Phelps

Financials

as of Fiscal Year 2023
 Revenue
$0
 Monthly Burn
$35,000
 Runway
4.6 months

Summary Profit and Loss Statement

FY 2023 FY 2022

Revenue

$0

$0

COGS

$0

$0

Tax

$0

$0

 

 

Net Income

$-851,979

$-162,055

Summary Balance Sheet

FY 2023 FY 2022

Cash

$44,363

$14,279

Accounts Receivable

$0

$0

Total Assets

$448,411

$16,029

Short-Term Debt

$318,988

$175,047

Long-Term Debt

$745,175

$0

Total Liabilities

$1,064,163

$175,047

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Synopsis

Vroom Solar is a company focused on creating off-grid do-it-yourself (DIY) solar energy kits for portable applications. The company aims to provide a more efficient and cost-effective alternative to traditional battery-based portable energy systems. The primary customers for Vroom Solar include individuals and businesses seeking portable, sustainable energy solutions for various off-grid applications.

The problem Vroom Solar addresses is the inefficiency and high cost associated with traditional battery-based portable energy systems. These systems often require significant investment in batteries and other components, which can be cumbersome and environmentally unfriendly. Additionally, the reliance on batteries limits the usability and convenience of these systems for customers who need reliable, portable power solutions.

Vroom Solar offers a solution through its off-grid DIY solar energy kits, which are designed to produce five to ten times the output of traditional battery-based systems. By eliminating the need for batteries and grid connections, Vroom Solar's kits provide a more sustainable and cost-effective option for harnessing solar energy. The product is currently in development, with a proof of concept and prototype already established.

In everyday scenarios, the problem Vroom Solar addresses can be seen in situations where individuals or businesses require portable power, such as during camping trips, outdoor events, or in remote work locations. Traditional battery-based systems often fall short in these scenarios due to their limited capacity and the need for frequent recharging. Vroom Solar's kits, on the other hand, offer a more convenient and reliable source of power, allowing users to enjoy their activities without worrying about running out of energy.

By focusing on off-grid DIY solar energy kits, Vroom Solar aims to simplify the process of harnessing solar energy, making it accessible to a broader audience. This approach not only addresses the limitations of traditional systems but also promotes environmental sustainability by reducing reliance on batteries and grid connections.

Next Section: Price

Price

Vroom Solar is offering Common Equity to investors in its current funding round. The pre-money valuation for the company is set at approximately $15 million, with a share price of $16.79. Investors have the opportunity to acquire equity ownership in Vroom Solar, which represents 3.96% of the company being sold to new investors.

Investing through common equity provides shareholders with ownership stakes in the company, but it does not come with the preferential treatment that preferred equity holders might receive. Common equity holders typically have voting rights and can benefit from the company's growth and potential exit events. However, they are last in line to receive any proceeds in the event of liquidation, after debt holders and preferred equity holders are paid.

For Vroom Solar to provide a 10X return to its investors, the company would need to achieve a valuation of approximately $150 million at exit (not accounting for dilution). This could be realized through various exit strategies, including an acquisition by a larger company in the energy sector or a successful initial public offering (IPO). Given the company's pre-revenue status and the high market potential for solar energy solutions, significant growth in both revenue and market share would be necessary to reach this valuation.

To achieve such a valuation, Vroom Solar would need to demonstrate substantial traction in the market, potentially capturing a significant portion of the $38.7 billion addressable market for solar photovoltaic (PV) systems in the U.S. This would involve scaling production, establishing robust distribution channels, and achieving high market acceptance for its DIY solar energy kits. The company's ability to differentiate itself from competitors and maintain a competitive edge through its unique product offerings will be crucial in driving this growth.

In terms of revenue multiples, if Vroom Solar aims for a valuation of $150 million, it would need to generate substantial revenue to justify this valuation. For instance, assuming a revenue multiple of 5.0x, the company would need to achieve annual revenues of approximately $30 million. This would require significant market penetration and consistent revenue growth over the coming years.

Next Section: Market

Market

The US solar photovoltaic (PV) market, which Vroom Solar is targeting, is influenced by several key drivers and trends. One of the primary drivers is the increasing demand for sustainable and renewable energy sources. Growing environmental awareness and the need to reduce carbon footprints are pushing both consumers and businesses toward adopting solar energy solutions. Additionally, advancements in solar technology and decreasing costs of solar panels are making solar energy more accessible and cost-effective, further driving market growth.

Government incentives and policies also play a significant role in shaping the solar PV market. Federal tax credits, state-level incentives, and various subsidies for solar energy installations are encouraging the adoption of solar solutions. These incentives help reduce the initial investment required for solar installations, making them more attractive to a broader range of customers.

Market trends indicate a shift towards decentralized and off-grid energy solutions, which aligns well with Vroom Solar's product offering. The increasing prevalence of remote work and the desire for energy independence are boosting the demand for portable and off-grid solar energy kits. However, the competitive landscape remains moderately competitive, with several established players and new entrants vying for market share. Vroom Solar will need to differentiate itself effectively to capture a significant portion of this market.

The addressable market size for solar PV in the US is estimated to be approximately $38.7 billion, with a growth rate of 14.2%. This substantial market size and robust growth rate present significant opportunities for Vroom Solar to expand its customer base and achieve revenue growth. However, the company's product may initially appeal to a niche market within the broader solar PV industry. Vroom Solar's DIY solar energy kits are particularly suited for off-grid and portable applications, making them an ideal solution for outdoor enthusiasts, remote workers, and businesses requiring portable power solutions.

While the broader solar PV market encompasses various applications, including residential, commercial, and industrial installations, Vroom Solar's focus on off-grid solutions positions it within a specialized segment of the market. This niche focus allows Vroom Solar to address specific customer needs that may not be fully met by traditional grid-tied solar solutions. However, this also means that Vroom Solar must effectively target and penetrate this niche market to achieve meaningful growth.

Next Section: Team

Team

Vroom Solar's team is led by 4x founder and CEO Luke Phelps, who brings seven years of relevant industry experience. Phelps has a background in engineering and management, which equips him with the skills necessary to oversee the development and commercialization of Vroom Solar's DIY solar energy kits. He previously founded Red Barn Solar and PVpallet, and holds a BA from Drury University. James Bartly (CTO) has 15 years of experience in the solar industry, having previously founded Solar Pile Driver and Skywire Electrical Systems, while also serving as an Electrician at Beaman Electric. Cary Kapper (COO) served as a Manager at Paul Mueller Company, a global stainless steel processing equipment manufacturer for over 30 years. And finally, Robin Loyed (Sales & Marketing Director) previously served as a Principal Consultant URbrandLIVE! for over a decade, and also served as Senior Director of Global Field Marketing at International Game Technology and as Marketing Director at Sprint. 

Next Section: Differentiation

Differentiation

Vroom Solar operates in a competitive landscape with several established players in the portable solar energy market. Key competitors include Goal Zero, Renogy, and Jackery. These companies offer a range of portable solar solutions, including solar panels, generators, and power banks, catering to both consumer and commercial applications.

Goal Zero is one of the leading companies in the portable solar market, known for its high-quality products and extensive product lineup. Goal Zero offers solar panels, power stations, and accessories designed for outdoor enthusiasts and emergency preparedness. Their products are priced at a premium, reflecting their robust build quality and advanced features. In comparison, Vroom Solar aims to provide a more cost-effective solution with its DIY solar energy kits, potentially appealing to budget-conscious customers.

Renogy is another significant player in the market, offering a wide range of solar products, including solar panels, inverters, and battery storage systems. Renogy's products are known for their reliability and versatility, catering to both residential and commercial applications. Renogy's pricing is competitive, and they have a strong presence in the market. Vroom Solar differentiates itself by focusing on off-grid DIY kits, which are designed to be more portable and user-friendly, targeting a specific niche within the broader solar market.

Jackery specializes in portable power solutions, including solar generators and power stations. Jackery's products are popular among outdoor enthusiasts and those seeking reliable backup power solutions. Their products are known for their ease of use and portability, with pricing that reflects their quality and brand reputation. Vroom Solar's DIY kits aim to offer higher efficiency and output compared to traditional battery-based systems, positioning themselves as a more sustainable and cost-effective alternative.

Vroom Solar targets a specific demographic of customers who require portable, off-grid power solutions. This includes outdoor enthusiasts, such as campers, hikers, and RV owners, who need reliable power sources in remote locations. Additionally, the company's products appeal to remote workers and businesses operating in off-grid areas, as well as individuals seeking emergency backup power solutions. The customer base is likely to be environmentally conscious, valuing sustainability and cost-effectiveness in their energy solutions.

In terms of product differentiation, Vroom Solar's DIY solar energy kits are designed to produce five to ten times the output of traditional battery-based systems, eliminating the need for batteries and grid connections. This higher efficiency and sustainability set Vroom Solar apart from its competitors. However, the company is still in the pre-product development phase, and its ability to compete effectively will depend on the successful execution of its product development and market penetration strategies.

Next Section: Performance

Performance

Vroom Solar's performance metrics reveal several key insights into the company's current financial health and operational status. As a pre-revenue company, Vroom Solar has yet to generate any sales, which places significant importance on its burn rate and cash reserves.

The most recent monthly burn rate for Vroom Solar stands at approximately $71k. This figure indicates the company's monthly operational expenses, including costs associated with research and development, operations, and inventory. With most recent cash on hand reported at $160k, Vroom Solar has a limited runway of just over two months, emphasizing the need for additional funding or rapid revenue generation to sustain operations.

In terms of financial metrics, Vroom Solar's total assets at the most recent fiscal year-end were approximately $448k, while short-term debt stood at $319k and long-term debt at $745k. These figures highlight the company's reliance on debt financing to support its ongoing development efforts. The significant level of indebtedness may impact Vroom Solar's financial flexibility and its ability to invest in growth initiatives.

Vroom Solar's net income for the most recent fiscal year-end was a loss of approximately $852k, compared to a loss of $162k in the prior fiscal year. This substantial increase in net loss reflects the company's intensified investment in product development and operational activities as it strives to bring its DIY solar energy kits to market. The escalating losses also underscore the importance of achieving revenue generation to offset ongoing expenses.

Despite the financial challenges, Vroom Solar has established a proof of concept and prototype for its product, indicating progress in its development phase. The company's focus on creating a cost-effective and sustainable alternative to traditional battery-based portable energy systems positions it well within the growing solar energy market.

Next Section: Risk

Risk

Investing in Vroom Solar comes with several specific risks that potential investors should consider before committing funds. One key risk factor is the company's early-to-market status, as Vroom Solar is currently in the pre-product development phase. This stage presents adoption risks, as the company has yet to demonstrate market acceptance for its DIY solar energy kits. The success of Vroom Solar will significantly depend on its ability to educate and convince potential customers of the benefits and reliability of its product.

Another notable risk is the company's high burn rate relative to its cash on hand. With a monthly burn rate of approximately $71k and most recent cash reserves of $160k, Vroom Solar has a limited runway of just over two months. This short runway indicates that the company must secure additional funding or rapidly achieve revenue generation to sustain its operations and continue its development efforts.

Vroom Solar is also operating in a moderately competitive landscape within the solar energy market. The company faces competition from both established players and new entrants offering similar portable solar solutions. To capture a significant market share, Vroom Solar must differentiate itself effectively and maintain a competitive edge, which adds pressure on its product development and marketing strategies.

The company's financial structure reveals a significant amount of debt, with short-term debt standing at approximately $319k and long-term debt at $745k. This level of indebtedness could impact Vroom Solar's financial flexibility and its ability to invest in growth initiatives. Additionally, managing debt repayments while striving for market expansion may pose a challenge.

Vroom Solar's pre-revenue status further exacerbates these risks. With no current revenue, the company depends entirely on external funding to sustain its operations. This reliance heightens the uncertainty surrounding its financial stability and growth prospects. Investors must consider whether the company can transition from its pre-revenue stage to generating substantial income in a relatively short time frame.

Furthermore, the company's valuation of approximately $15 million may be considered high given its current development phase and lack of revenue. This high valuation implies that investors are betting on significant future growth, which may or may not materialize. Achieving the necessary milestones to justify this valuation will be critical for delivering expected returns to investors.

Next Section: Bullish Outlook

Bullish Outlook

The bullish outlook for Vroom Solar is underpinned by several key factors that highlight the company's potential for growth and success. One of the primary drivers is the substantial market opportunity within the US solar PV market, valued at $38.7 billion and growing at a rate of 14.2%. The increasing demand for renewable energy solutions, driven by environmental awareness and supportive government policies, presents significant growth potential for Vroom Solar's off-grid DIY solar energy kits.

Vroom Solar's focus on creating high-output, battery-free solar energy kits sets it apart from competitors. These kits are designed to produce five to ten times the output of traditional battery-based systems, providing a more efficient and cost-effective alternative. This unique strength positions Vroom Solar to capture a niche market of environmentally conscious and budget-conscious customers who require portable, sustainable energy solutions.

Vroom Solar has also established a proof of concept and prototype for its product, indicating progress in its development phase. This achievement demonstrates the feasibility of their technology and provides a solid base for further development and market entry. Additionally, the company’s ability to produce a more sustainable and efficient alternative to traditional systems offers a competitive edge.

Market trends favor Vroom Solar's expansion plans, particularly the shift towards decentralized and off-grid energy solutions. The company's product is well-suited for outdoor enthusiasts, remote workers, and businesses operating in off-grid areas, as well as individuals seeking emergency backup power solutions. As remote work continues to grow, the demand for reliable, portable power solutions is likely to increase, providing a strong growth driver for Vroom Solar.

Next Section: Bearish Outlook

Bearish Outlook

The bearish outlook for Vroom Solar is primarily driven by several key factors that pose significant challenges to the company's growth and profitability. One of the main market challenges is the competitive landscape of the solar energy market. Established competitors such as Goal Zero, Renogy, and Jackery have already secured strong market positions with robust product offerings and brand recognition. Vroom Solar's ability to differentiate itself and capture market share in this environment remains uncertain.

From a financial standpoint, Vroom Solar faces considerable concerns. The company currently has a high monthly burn rate of approximately $71k, coupled with limited cash reserves of $160k, resulting in a short runway of just over two months. This situation underscores the urgency for additional funding to sustain operations and continue product development. Additionally, Vroom Solar has significant debt, with short-term debt at $319k and long-term debt at $745k, which could limit its financial flexibility and hinder growth efforts.

The company's valuation of approximately $15 million may also be challenging to justify given its pre-revenue status. Achieving the milestones necessary to support this valuation will be critical, and any delays or setbacks in product development or market adoption could negatively impact investor returns. The high valuation relative to the company's current stage may deter potential investors who seek a more favorable risk-reward balance.

Vroom Solar's early-to-market status presents adoption risks, as the company has yet to demonstrate significant market acceptance for its DIY solar energy kits. Convincing potential customers of the benefits and reliability of its product will be crucial for driving sales and achieving revenue growth. Limited market adoption could result in slower-than-expected growth and revenue generation, further exacerbating financial challenges.

Next Section: Executive Summary

Executive Summary

Vroom Solar is a company focused on developing off-grid DIY solar energy kits for portable applications. Their primary customers include outdoor enthusiasts, remote workers, and businesses requiring portable power solutions. The company aims to provide a more efficient and cost-effective alternative to traditional battery-based systems, with a focus on sustainability and ease of use.

Vroom Solar is offering Common Equity in its current funding round, with a pre-money valuation of approximately $15 million and a share price of $16.79. The company is pre-revenue, and achieving a 10X return for investors would require significant market penetration and revenue growth, targeting a valuation of around $150 million at exit (not accounting for dilution).

The US solar PV market, valued at $38.7 billion with a growth rate of 14.2%, presents substantial opportunities for Vroom Solar. Key market drivers include increasing demand for renewable energy, technological advancements, and supportive government policies. Vroom Solar's focus on off-grid solutions aligns well with trends towards decentralized energy and the growing need for portable power.

Financially, Vroom Solar faces challenges with a high monthly burn rate of approximately $71k and limited cash reserves of $160k, indicating a short runway. The company has significant debt, with short-term debt at $319k and long-term debt at $745k. These factors highlight the urgency for additional funding and revenue generation to sustain operations.

Vroom Solar differentiates itself through its high-output, battery-free DIY solar energy kits, targeting a niche market of environmentally conscious and budget-conscious customers. Competitors such as Goal Zero, Renogy, and Jackery offer similar products, but Vroom Solar's focus on efficiency and sustainability sets it apart. The company's success will depend on its ability to effectively market and differentiate its products.

On the bullish side, Vroom Solar operates in a growing market with strong demand for renewable energy solutions. The company's focus on off-grid, high-efficiency solar kits aligns well with market trends, and its team has the relevant experience to drive product development and market entry. Additionally, supportive government policies and incentives could further boost market adoption.

On the bearish side, the company's financial health is a concern, with a high burn rate and limited runway. The competitive landscape is moderately competitive, and Vroom Solar must effectively differentiate itself to capture market share. The company's pre-revenue status and high valuation add to the investment risk.

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Company Funding & Growth

Funding history

Total Prior Capital Raised
$712,601
VC Backed?
No
Close Date Platform Valuation Total Raised Security Type Status Reg Type
09/18/2024 StartEngine $14,995,837 $68,832 Equity - Common Funded RegCF
06/02/2023 StartEngine $9,000,000 $388,796 Equity - Common Funded RegCF
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Growth Charts

Revenue History

Note: Revenue data points reflect the latest of either the most recent fiscal year's financials, or updated revenues directly from the founder, at each raise's close date.

Valuation History

Price per Share History

Note: Share prices shown in earlier rounds may not be indicative of any stock splits.

Employee History

Founder Profile

Pioneering Plug-and-Play Solar Power Solutions with Luke Phelps

Solar energy brings lots of benefits to customers: independence, cheap electricity, and a low carbon footprint. Still, installing solar panels requires to deploy capital, and owners of small homes may not have the space for it.

Vroom Solar is innovating in the space by offering a plug and play solar panel solution. Vroom solar is ideal for remote jobs and can easily replace gasoline generators during daylight hours. We talked to Luke Phelps to better understand the company’s positioning and it’s growth strategy.

Read Founder Interview

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Vroom Solar on StartEngine 2024
Platform: StartEngine
Security Type: Equity - Common
Valuation: $14,995,837
Price per Share: $16.79

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