ZEUUS

ZEUUS is currently raising $75 million in a Regulation A offering at a $500 million pre-money valuation. Although the company is attempting to operate in several lucrative industries, ZEUUS simply does not have the traction, team, or differentiation to command such a valuation. 

ZEUUS currently trades in the public Other OTC exchange — otherwise known as the Grey Market — under the ticker ZUUS. Securities in the Other OTC are considered over-the-counter but aren’t quoted by broker dealers because of lack of investor interest, lack of financial information, or lack of regulatory compliance. Securities traded in Other OTC are essentially illiquid, speculative, and risky. 

Lastly, investors should note the difference between ZEUUS’ share price on the Other OTC and its share price in its current raise. On the Other OTC, ZEUUS currently trades at $90 per share with a market cap of nearly $950 million. But the company’s current raise values the company at $50 a share and a $500 million pre-money valuation. Overall, it seems the company is having a difficult time finding an appropriate value. Given ZEUUS’ early stage and lack of solid traction and recent revenue, it is overvalued for this round. 

ZEUUS operates in several very large markets. The global data center market was valued at $227.2 billion in 2022, and the market is expected to continue growing at a fair compound annual growth rate (CAGR) of 10.2%. Unfortunately for ZEUUS, it’s competing against large and established companies like Google, Amazon, and Equinix (an internet connection and data center company). Startups and other new entrants rarely succeed in this space due to the established competition. 

ZEUUS will also compete in the ultra-competitive digital software and services space with its ZEUUS SOLAAS division. The global cloud computing market was valued at $446.5 billion in 2022 and is expected to grow quickly at a CAGR of 17.4%. The cloud computing market is also dominated by many of the same names, including Google, Amazon, and Microsoft. 

ZEUUS will also have an energy division focused on providing wind power solutions. The global wind turbine market was worth $55.9 billion in 2021, with a fairly average CAGR of 6.3%. It’s dominated by large and established competitors, including Vestas, a Danish wind turbine service, and Goldwind, a Chinese turbine manufacturer. 

ZEUUS’ final division focuses on cybersecurity. The global cybersecurity market is worth $146.3 billion in 2022, with a decent CAGR of 9.7%. This is yet another large market with even more competition, including Palo Alto Networks, a California-based cybersecurity company specializing in firewalls and cloud-based systems, and CrowdStrike, a Texas-based cybersecurity company offering cloud and cybersecurity services. 

While all of these markets are large and growing at a good pace, they’re also crowded with established and better-funded competitors. ZEUUS hasn’t demonstrated the ability to compete with any of the large competitors above, so there’s no guarantee it can grab a decent slice of any of its target markets. 

ZEUUS founder, President, Chairman, CEO, and do-it-all man Bassam Al Mutawa is a serial entrepreneur with a Bachelor of Business from the University of Wisconsin-Milwaukee. Al Mutawa acts as founder and chairman for six other companies, including a seemingly self-named general trading company and two oil and gas companies. He’s also the founder and president of a construction company called Contractors Buildings and Roads. His combined leadership experience at all of these companies amounts to more than 135 years, but none of his industry experience seems related to ZEUUS. Al Mutawa’s LinkedIn biography also states that he’s supposedly grown the revenues of the combined companies to more than $125 billion — a statement that’s difficult to verify. Al Mutawa is stretched quite thin, which isn’t a good sign for ZEUUS. It’s hard to believe Mutawa will be able to lead ZEUUS to success against the likes of Google, Amazon, and many others when his efforts pull him in so many different directions. 

ZEUUS’ small team also includes its directors. Tommy Dunehew has an extensive background in the defense and aircraft industries, with roles primarily focused on strategy and business development. He spent more than 27 years at Boeing and a couple years as the vice president of international strategic development at General Atomics Aeronautical Systems. Dunehew is now working as the owner and a consultant of IT50 Global Consulting. 

The other director, Khamis Buharoon Al Shamsi, has a background primarily in banking and finance. He has more than 36 years of banking experience and currently runs his own banking consultancy service.

Put together, the three have little in the way of industry experience that can lead ZEUUS to success, especially in industries dominated by behemoths like Amazon, Google, and others. Additionally, while six full-time employees are listed in the company’s Form 1-A, their roles are unclear. Investors can only hope the other employees are engineers and other highly technical personnel needed to run a company competing in the fields of data centers, wind turbines, cybersecurity, and cloud computing software.

Lastly, investors should note that the company was originally founded as Kriptech International by Aleksandr Zausayev. Meshal Al Mutawa later acquired a near 76% stake in Kriptech International, then handed the reins over to Bassam Al Mutawa. It’s generally a bad signal when a founder steps aside so early. It can imply the founder doesn’t believe in their own company or that an executive team with a majority share pushed the founder out for whatever reason. 

There is little to differentiate the quality and prices of ZEUUS’ products and services. The company provides very little, vague, or generic information on its products and services and how they may differ from its competitors’ offerings. 

Notably, ZEUUS aims to make its vertical axis wind turbines more compact and efficient than competitors’, and it plans to use them to power homes and data centers (presumably ZEUUS’ own). Unlike horizontal axis turbines, which look like pinwheels, vertical axis turbines have axes that are perpendicular to the ground. Because they often don’t perform as well as horizontal axis options, vertical axis turbines are less common. However, they’re more suited to narrow spaces and residential areas, so vertical axis turbines serve ZEUUS’ purposes better. 

ZEUUS obtained its wind turbine technology through an acquisition and has two patents pending. Patents aren’t hard to apply for, though, so that alone doesn’t mean much. The company’s turbines were around 32.8 feet high and around 23 feet wide during initial tests. They can capture wind energy at speeds from about 8.9 miles per hour to 134.2 miles per hour, and power ranges from 25,000 watts to 600,000 watts. 

Residential turbines are already available, although they’re generally much smaller than ZEUUS’ prototype. One of ZEUUS’ closest competitors is Flower Turbines, which offers vertical axis turbines in three different sizes. The largest size generates much less power at 3,000 to 5,000 watts. It reaches 16.4 feet high — exactly half the size of ZEUUS’ prototype — and starts moving at as low as 2.2 miles per hour. Flower Turbines’ model seems more suitable for narrow and less windy areas than ZEUUS’ prototype, but ZEUUS’ power generation seems much stronger. 

The problem with ZEUUS’ prototype, however, is that the company provides little information about the wind turbine company it purchased to acquire its technology. While the company claims its technology is better, there’s no way for investors to verify such information. Lastly, while the technology may work well for residential homes (that is, if a homeowner wants a 32-foot-high wind turbine on their property, which is questionable), data centers can require between 28 million and 100 million watts of energy. At its current levels, the company’s prospective technology will not be able to power a data center by itself.

All in all, ZEUUS doesn’t offer much information on its various business divisions, though the company seemed to stuff its offering circular full of as many buzzwords as possible. While initial tests of its wind turbine technology look promising, ZEUUS’ claims are difficult to trust without any means of verification. There is no reason to believe ZEUUS’ diversified offerings will be better than any of its much stronger, more established competitors, which include the likes of Google, Amazon, and Microsoft.

ZEUUS was founded in 2016 and has achieved nothing notable since then. While its Form A isn’t barren, it doesn’t offer much substance either. The company had no revenue in 2020 up until June 2021, down from $10,900 in 2019. As of June 2021, ZEUUS has $175,608 in cash on hand and $16,596 in property, plants, and equipment — which isn’t much. ZEUUS also had a net loss of $180,839. Overall, ZEUUS’ financial performance is underwhelming.

ZEUUS partnered with IPTP Networks, a global team of companies that deals with software and networks, to provide internet services. It previously planned to have its first patent-pending wind turbines ready for production in June 2022. ZEUUS’ website indicates the turbine prototypes are still in their final phase of development, though, so that plan seems to be delayed. Perhaps the most noteworthy thing about the company’s performance thus far is that ZEUUS is supposedly acquiring various data centers across the globe for more than $29 million. The company’s financials don’t match the supposed acquisition costs, but that may be due to a lag between the publication of the offering circular and the time since the offering went live. Nevertheless, ZEUUS has been around for six years and hasn’t achieved much. Investors shouldn’t expect the company to suddenly start living up to its $500 million valuation anytime soon — or maybe ever.

An investment in ZEUUS is among the riskiest investments an investor can make. There is significant product risk associated with ZEUUS, as it is in the very early stages of development for most of its business divisions. As such, it’s difficult to say how much better or cheaper its products and services will be once they’re complete, but if the company expects to compete in highly technical and competitive markets, it already faces a very steep uphill climb.

Additionally, the company faces some team risks, as the executive team doesn’t have much technical expertise or experience in any of the company’s prospective markets. Should investors really trust founders with little to no experience in cloud computing, blockchain, and more to compete against the likes of Google, Amazon, and a myriad of capable startups? Lastly, ZEUUS’ do-it-all founder and CEO Bassam Al Mutawa is at the helm of several other businesses that will more than likely divert his attention from ZEUUS. So it seems unlikely that Al Mutawa and his team will be able to grow ZEUUS into its prospective $500 million valuation.

The company’s current valuation also poses a major risk for investors. For investors to see a 10x return on their investment, ZEUUS would have to go public at more than $20 billion (taking dilution into account). For a company valued at $500 million with no recent revenues, that’s impossible to justify. Taking into account the other risks and lack of verifiable differentiation, investors should very carefully consider the risks before they consider investing in ZEUUS.

ZEUUS was founded in 2016, but it is still a very early stage company. It has little product development and differentiation for a company that’s competing against household names like Amazon, Google, and Microsoft. The presence of numerous industry-leading competitors doesn’t bode well for ZEUUS. 

In addition, the team lacks industry experience. It doesn’t help that the founder and CEO doesn’t seem to be giving ZEUUS the dedication it needs in order to navigate challenges and outmaneuver its competition. Questions remain about why the original founder, Aleksandr Zausayev, handed over the company so early. This is usually a bad signal, as it could suggest that the first founder didn’t believe in his company or that he was pushed aside by executives with a majority share for some reason. 

Finally, ZEUUS currently trades on the Other OTC exchange, which usually lists risky companies that lack investor interest, financial information, or regulatory compliance. ZEUUS’ market cap and share price is higher there, too, for some reason — $90 shares with a $950 million market cap as opposed to this round’s $50 shares with a $500 million valuation. Investors should be concerned that ZEUUS seems indecisive about its own value. Putting these factors together with the company’s lack of recent revenue and significantly overpriced valuation, ZEUUS offers investors plenty of warning signs.

The most generous reading of ZEUUS’ prospects is that its integrated set of solutions has potential. ZEUUS’ various business divisions could work together in theory. Data centers, powered by wind turbines, play into providing digital services like cloud computing. Data centers and digital services require robust cybersecurity. 

Additionally, the company intends to have a strong presence in the Middle East, with three of its projected eight data centers in Kuwait, Dubai, and Abu Dhabi. This stands out since the Middle East is fairly underserved compared to North America and Europe, so ZEUUS has an opportunity to provide more service options there. 

Finally, although ZEUUS faces numerous industry-leading competitors, each of its markets is large and growing at a good pace. If ZEUUS does manage to capture decent market shares, investors might see favorable returns. But aside from these things, there isn’t much for investors to be optimistic about. 

ZEUUS is an early stage company attempting to tackle too many industries. The data centers, digital business solutions, wind energy, and cybersecurity industries are large markets that have churned out multiple household names in recent memory. So while ZEUUS’ seems to be targeting large and growing markets, the company faces stiff competition on every front. ZEUUS’ wind turbines are pending patents and may begin production soon, but the company’s timeline seems to be delayed. 

There are a number of other concerns investors should keep in mind before investing in this company. ZEUUS’ current $500 million valuation is excessive for a company with no recent revenue, no solid traction, and limited product development. The company’s exorbitant valuation also makes it less likely that investors will see a suitable 10x return. The company does not seem far along in developing its products or rolling out any of its supposed services, and so far, its offerings lack verifiable differentiation. 

Additionally, ZEUUS does not have an exceptional team to help the company outmaneuver its well-known and well-regarded competitors, which include Google, CrowdStrike, and Amazon. The company offers little to stand out among its more developed and well-funded competitors. Founder and CEO Bassam Al Mutawa has little to no technical expertise, nor does he have experience in the company’s target industries. He is also deeply involved in six other businesses, which means ZEUUS probably isn’t getting the attention it sorely needs. Overall, ZEUUS has many obstacles to overcome in order to achieve success. Therefore, ZEUUS has been rated an Underweight Deal.

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

Analysis written by Francis Vu, July 6, 2022.