Boxable is raising funds by offering preferred equity at a pre-money valuation of $3 billion. The company successfully completed a raise in November 2021 at a valuation of $226,249,347, a far more reasonable valuation than its current $3 billion raise. While startup valuations have been steadily increasing, this is an extremely high valuation for any startup. Boxabl earned $2 million in 2021 revenue, according to its most recent annual report. Given its recent revenue, the company has an above-average revenue-to-valuation multiple compared to the housing alternatives industry average. Despite generating interest and locking down early deposits, Boxabl holds a significant amount of debt, and the company has yet to achieve product-market fit. Boxabl’s valuation is very overvalued given its revenue, market traction, and above-average revenue multiple. Overall, the price is not a good deal for investors.

Boxabl is currently focused on rolling out its accessory dwelling unit (ADU) product, the Casita. Demand for ADUs has increased in recent years, with many using them for housing, storage, or passive income. Changes to zoning laws and the construction permitting process have made building approved ADUs easier than ever. 

Boxabl’s Casitas cater to the wide-ranging US housing market, which is worth $43 trillion in 2022. The market grew by an impressive 19% between 2021 and 2022, and it’s expected to grow another 11% in 2022. The market is enormous and set to grow at a healthy rate. Additionally, Boxabl’s first large-scale factory is based in California, which is home to the nation’s largest housing market. California makes up a fifth of the total housing value in the US and is in dire need of more affordable and convenient housing options. Not every prospective homeowner is likely to want an ADU, though, so Boxabl’s obtainable market is likely much smaller. 

Boxabl faces fierce competition in both the traditional housing and housing alternatives market. Competitors in the traditional housing space include Lennar, D.R. Horton, NVR, Pulte Group, Toll Brothers, Meritage Homes, Clayton Properties Group, and other local contractors. It is estimated that the top 15 home building companies account for more than 73% of the total industry market value. The rest of the market is composed of small builders and independent contractors. Boxabl’s competitors in the housing alternatives market include shipping container companies such as Giant Containers, Honomobo, and Logical Homes, to name a few. 

Overall, the traditional home building market is highly saturated and dominated by legacy companies. The alternative housing market also has many established competitors to contend with. There is still room for Boxabl to exist and possibly do well, but it faces differentiation challenges and can likely only access a small percentage of market share. 

Boxabl co-founder and CEO Paolo Tiramani is also CEO and founder of 500 Group, an intellectual property, investment, and development firm that holds Boxabl under its umbrella. Over the past 30 years serving 500 Group, Tiramani has accumulated 155 patent filings (60 active patents across the US and Europe) in mechanical engineering, industrial design, and more. He holds bachelor’s degrees in mechanical engineering and industrial design from University of the Arts London. 

Co-founder and Director Galiano Tiramani is an experienced cryptocurrency entrepreneur. Tiramani’s past cryptocurrency startup, CoinHub, enabled users to trade crypto and effectively manage their portfolios. However, he has less experience with construction structures. Tiramani holds a Bachelor of Business Administration in international business from Sacred Heart University.

Kyle Denman serves as Boxabl’s lead engineer and spearheads the development of Boxabl’s technology. Denman has past experience as a carpenter, ensign engineer, and mechanical engineer. To date, Denman holds more than 20 civil engineering and automotive mechanical patents. His experience and expertise is critical for Boxabl’s development and product refinement. Denman holds a Bachelor of Engineering in mechanical engineering from Stony Brook University. 

Overall, Boxabl’s team of leaders is rather small and lacks strong marketing and legal expertise, but it includes a good amount of entrepreneurial, business, and engineering experience. These complementary skill sets are well suited to continue growing Boxabl.

Boxabl offers many features and solutions designed to reduce common pain points experienced by builders and homeowners alike. The Boxabl structures are fire, flood, bug, and mold resistant. Boxabl also touts its units’ ability to withstand snow, hurricane winds and seismic activity. Boxabl structures are anticipated to be more energy efficient through the use of LED lights, minimal thermal bridging, smaller-sized HVAC systems, and effective insulation. Unlike some competitors, Boxabl can connect to any foundation, has crane pick-up points for quick setting, and packs down to 2.5x original volume for low transportation costs. Design elements are customizable, and the company aims to limit costs for later electrical retrofitting.

Boxabl’s pricing is very competitive in the alternative housing market. Its initial product, the Casita, runs about $50,000 for 375 square feet, averaging about $133 per square foot. (Though it’s important to note that assembly costs are not included in the base price of $50,000.) Building a new home can typically cost anywhere from $100 to $500 per square foot. This makes Boxable’s pricing reasonable, especially since its cost includes furnishings and appliances.

Logical Homes is a competitor that makes alternative housing out of shipping containers. Its designs are environmentally friendly, including materials that reduce the need for heating and cooling. The company’s various offerings can range from 160 square feet to 3,580 square feet or have a completely custom design. Each option costs around $200 to $300 per square foot, which doesn’t include furniture and appliances.

Meka Modular is another competitor that makes alternative homes. Its designs boast sturdiness against natural elements, such as earthquakes and snow. One of its models is 320 square feet and sells for $88,900, about $278 per square foot, without appliances. Its next largest option is 480 square feet and costs $114,000, around $238 per square foot.

Boxabl’s Casita doesn’t currently come with as many size options as competitors, and some of its competitors have similar perks, such as weather endurance. However, the Casita benefits from combining customization, sturdiness, energy considerations, and low pricing. Boxabl has filed more than 40 patents since its inception, making its design and implementation highly defensible against competitors. Overall, Boxabl is well distinguished from competitors.

While the company is still in a pre-profit phase, Boxabl boasted revenue of almost $2 million in 2021, a drastic 2,073% increase from its 2020 revenue of $90,000. To date, Boxabl has raised more than $9.6 million from prior funding rounds, including its last StartEngine raise that ended in November 2021. 

Despite promising financial progress, Boxabl is beginning to accumulate significant debt. While some debt is to be expected and is often a good sign of early business growth, Boxabl’s $7.8 million short-term debt and $32.1 million long-term debt as of 2021 are quite high. Boxabl’s net loss grew from $1.2 million in 2020 to $10.6 million in 2021, a 809% decrease in net income. This increase in debt and decrease in net income could be a red flag for investors.

But despite some financial challenges, Boxabl has received more than 4,000 paid deposits and more than 90,000 Casita reservations. With two purchase orders from the federal government totaling more than $9 million, Boxabl is making noteworthy progress to expand into the market. With a franchising business model (setting up franchises to build their own factories), Boxabl hopes to quickly scale production facilities worldwide. Boxabl has received interest from 440 parties, from 17 states and 25 countries, that hope to partner in the franchise. More than half of these parties, 260 in total, indicated having access to at least $5 million to spend on these factories. 

Overall, Boxabl has some concerning debt and losses. However, it has greatly increased its total revenues, strengthened its customer base, and earned patents to further strengthen its defensibility, which are all promising signals for potential investors. 

Boxabl is overall a low-risk investment given its strong early performance, diffensibility, and leadership team. However, the company has significant financial risk. Given Boxabl’s extremely high valuation, the company will need to perform exceedingly well and gain market dominance quickly for investors to see significant returns on their investments. Boxabl could reach key development and expansion milestones, such as setting up new factories, but it will likely take a very long time given the nature of the business. If Boxabl continues to grow its debts and fails to generate cash flow for many years into the future, investors could suffer. 

Boxabl also faces market and customer preference risk. It is possible that buyers will not find accessory dwelling units or plug-and-play home building designs desirable in the coming years. If preferences change enough that Boxabl’s addressable market shrinks, the company will fail to generate revenue or profits for investors. Further, it could be difficult for Boxabl to drastically shift its product offering to accommodate new preferences, as it is a consumer goods company focused on improving large-scale construction. 

Boxabl has been incorporated since 2017, but it didn’t raise its first round of funding until 2020. Since Boxabl’s last crowdfunding round on StartEngine in November 2021, it has grown its annual revenue by 2,073%, going from $90,000 in 2020 to nearly $2 million in 2021. Boxabl made moderate progress on its product development, hired 60 new employees, and gained more in-market traction. By the end of 2021, Boxabl received 4,000 deposits from potential customers.

Given such positive growth, the company’s valuation has seen a steep increase from $226,249,347 during its last round in 2021 to $3 billion in the current round. But Boxabl’s progress doesn’t seem to justify such a dramatic valuation increase. Furthermore, Boxabl’s debts are concerningly high, and the company’s net loss ballooned from $1.2 million in 2020 to $10.6 million in 2021.

Boxabl faces stiff competition in a large and crowded market where innovative competitors dominate. While housing trends in recent years have gravitated toward more mobile and dynamic spaces like Boxabl’s small accessory dwelling units, it is possible that consumer preferences could shift in the coming years, making Boxabl’s future uncertain. Boxabl could struggle to convert new customers if its product offering is no longer appealing, trendy, or cost effective. To avoid losing relevance or becoming one of many, Boxabl will have to continue differentiating itself and acquiring more of the market share. 

Boxabl’s leadership team is also small and appears to lack experience in marketing, branding, and legal efforts. If Boxabl fails to bring on new team members to support these efforts, it might struggle to grow quickly and acquire new customers. Boxabl’s $3 billion valuation this round is also wildly overpriced. Finally, Boxabl’s financials have suffered over the past year. Its short-term and long-term debts have both increased significantly, and its net loss increased from $1.2 million in 2020 to $10.6 million in 2021. If Boxabl is unable to recover quickly, investors may not see decent returns on their investments. 

Boxabl’s revenue has grown dramatically from $90,000 in 2020 to $2 million in 2021, according to its most recent annual report. Boxabl has also grown its employee base from 15 people to 75 people, according to SEC filings. 

The competition in the home construction and alternative housing market is fierce, but since it’s not a winner-take-all industry, Boxabl could find success if it distinguishes itself among competitors. With more than 40 patents, Boxabl seems committed to protecting its technology and unique building process. Boxabl is working to develop its offering with stackable units, which could attract more customers. Additionally, to draw more attention and actionable interest to its building options, Boxabl may develop a showcase community of Boxabl creations in Las Vegas after this fundraising round. A Boxabl community would also help to test and prove the versatility of Boxabl structures.

Boxabl’s customer base seems to be strong and enthusiastic about Boxabl’s offerings. The company’s first customer was the US federal government, with purchases totaling more than $9 million. The company has also received more than 4,000 paid deposits and more than 90,000 no-deposit reservations for its accessory dwelling unit, the Casita. The Casita’s versatility — able to be used for disaster relief, military housing, multi-family developments, hospital units, and other residential facilities — helps to further differentiate it from competing products. There are many other niches Boxabl could expand into with its growing customer base, such as transitional housing for homeless people. Under the guidance of a CEO with significant business experience, Boxabl may have what it takes to achieve success.

Boxabl offers affordable, innovative, and customizable accessory dwelling units that are built ahead of time and assembled within a day. There are many established competitors dominating the housing market, some of which offer relatively similar products, making the market difficult to tap into. Boxabl’s valuation is very ambitious at $3 billion, a 1,226% increase over its valuation in November 2021. Given Boxabl’s massive valuation, its revenue-to-valuation multiple is well above average compared to others in the market. Additionally, Boxabl has yet to achieve profitability, and the company is beginning to accumulate significant debt. 

However, Boxabl seems to be gaining important early traction. Its revenue rose sharply from $90,000 in 2020 to nearly $2 million in 2021. The company’s leaders are experienced and have complementary skill sets, and the team has grown. Boxabl’s products appear to be sturdy, versatile, and competitively priced. The company has grown its customer base and received more than 4,000 deposits. Boxabl is also working to further expand its production and could prove to be a meaningful solution to the current housing crisis. For these reasons, Boxabl is a Neutral Deal. 

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

Analysis written by Carolyn Price, June 3, 2022.