Canopy is raising via common equity at a $6.5 million valuation. This amount is low in comparison to many other crowdfunding campaigns at this time. However, Canopy has not earned the revenue to back it up.. As a result, Canopy’s price score is below average.

The US PPE market was valued at $13.5 billion in 2019 and is expected to grow at a CAGR of 12.5% to $24.3 billion in 2024. The specific segment for respiratory protection is forecasted to be worth $5.1 billion on its own in 2024. While the average American may not see the need for a state-of-the-art mask once the pandemic ends, healthcare workers will continue to need such equipment. Thus, the market score for Canopy is its highest across all five metrics.

Canopy was founded by Joe Rosenberg, a former Google manager for Strategic Partnerships and Business Development. He brings with him expertise in strategic partnerships, ecommerce, and enterprise sales.  In 2018, he founded Grove North Ventures, which provided business incubation and acceleration services.

Rosenberg is joined by Qing Xiang Yee as the Head of Product. Yee’s background includes studying at Johns Hopkins University’s Center for Bioengineering Innovation and Design and being a senior engineer at DSO National Laboratories (Singapore’s national defense research agency). Doug Clift and Kim Rosenberg round out the executive team, with the former acting as the Head of Operations and the latter as the Advisory Board Chair. Clift spent five years in Operations Innovation management at DaVita, Inc (a publicly traded healthcare company), working on operations and sustainability. Rosenberg serves as a Senior Vice President and Head of Pension Risk Transfer for Athene alongside her work at Canopy.

Overall, the team has many different areas of expertise, including business operations, engineering, and business development. However, the founder brings no medical or healthcare experience, and there is minimal entrepreneurial record within the team. Thus, Canopy’s team score is middle of the road.

Perhaps the most needed differentiator in PPE equipment is reusability. The ongoing pandemic has created a plastic waste crisis all around the world due to single use PPE equipment being improperly handled after use. The reusability of Canopy’s masks will make hospitals and the average person throw out much less PPE, especially in a time where it’s being used at such a high rate. Canopy’s design also has comfort in mind. Its utilization of the silicon face seal is supposed to leave no abrasions on the skin, which would be a welcome change from the currently used N95 masks for clinicians. The transparent nature of Canopy’s N95 is also a notable difference, allowing for easier communication. The company’s pending patents also provide encouraging defensibility for this well-distinguished product. The differentiators score for Canopy is quite high due to these factors.

Canopy is still pre-product and has no financial data to extrapolate on. However, the company does have some early partnerships that indicate it may be on the right path. The largest health system in New York State, Northwell Health, is leading an evaluation to compare Canopy’s mask to the normal N95. On top of this, Canopy also has entered into a strategic partnership with Access Strategy Partners, a sales organization with billions of dollars’ worth of medical device sales and purchasing experience. 

Despite these strategic partnerships, Canopy still has no revenue to show and is very early-stage still. Therefore, its performance score is mediocre. 

Once COVID-19 is a thing of the past for everyday Americans, will there still be as large a market for N95 masks? If the answer is no, this severely limits the opportunity that Canopy can access. Additionally, Canopy still has to prove that its mask is effective while being more comfortable than existing industry standards. If its trial partnership with Northwell Health doesn’t go well, the company would essentially be left back at square one. Even if the trial does go well, Canopy will still face hurdles in establishing a supply chain and securing enough customers to justify its currently overly-high valuation.

The market of PPE has been desperately needing a quality, affordable, and (most importantly) environmentally conscious alternative for some time now. Canopy’s mask checks all three of those boxes. With a successful clinical trial with Northwell Health, it could break into the mainstream as a B2B company. There has been much press around hospitals and plastic waste, especially in the midst of a global pandemic that requires much PPE to be used. Canopy could come in and become the emerging leader in the environmentally friendly PPE space.

The early stages Canopy finds itself in makes it difficult to pin down exactly the trajectory the business is on. The impending end to the COVID-19 pandemic will likely result in the general public wearing masks less. This consumer behavior will limit the company to hospitals and healthcare workers for its market opportunity. Canopy’s product has yet to be a proven success in a clinical setting, and it has no financial data to show any levels of success. With that being said, Canopy’s mask is strongly differentiated from other mask providers by being environmentally conscious, and the market for PPE remains relatively large, given how important it is in hospital and clinical settings. Taking everything into account, Canopy has been rated a Neutral Deal.

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

Analysis written by Ethan Thomas.