A lot of people are kicking themselves for not having attended the last Boxabl raise in the first place, only for Boxabl to be a nationwide phenomenon in just a few days. The company was certainly doing extremely well, however the tweets of Elon Musk and then the months-long campaigns for advertising and a 10-for-1 split and many other positive news have caused a massive increase in value. The excitement is continuing with more than $4 million raised through StartEngine within their initial day of operation, and the momentum continues to grow.
As people consider this raise, a lot of people are wondering whether the $3Bn price tag will be worth it. and where they are and if this is a location where they should put their cash.
Industry – 10/10
The overall residential and ADU market has seen a huge increase in recent times, and it won’t go anywhere for never. Furthermore, with steady and affordable prices I believe that Boxabls will provide a tempting alternative to a traditional home. While the cost of houses and land will fluctuate over time, the cost of Boxabls will be steady. The empty land remains a problem however, starting with an initial $50,000 Boxabl to get started after which, when you have paid off the debt, focus to add more rooms to your home or buying another one. This is a fantastic alternative for first-time homeowners.
The residential and ADU market is expected to increase in the coming years which makes it an excellent market to invest in at the moment. Even if the conventional housing market declines or persists in the future, it will not affect the value of Boxabl since their prices will remain in a steady state since there is a huge demand for houses in the next few years. Additionally that it’s the biggest market on the planet, which means it can’t get any more lucrative than that.
Market Differentiation – 23/25
Since I’ve been slowly making improvements and adding more information to my articles about companies I decided that it was time to break the article into sub-topics so that readers to understand how each rating actually plays out. This section is split by their business Model and their Product & The IP of the company, as well as branding. These are the two most important aspects, which is that 20% of 100 points are located in this segment. (For purposes of reference the 20/20 figure is what you get by adding the sub-sections points)
Business Model and Product (12/13)
This is an incredible product and business model. Their model of business is simple however, it is extremely efficient. It can bring in huge amounts of money and offers plenty of room to grow. While the base model Boxabls are priced at $50,000, you can easily add different options to every Boxabl so that they can turn the cost into a slightly bigger check. Additionally, the capability to grow and create modular housing allows people to buy several at a time and then purchase more in the future to complement their initial Boxabl.
There’s also the possibility for smaller units for less than $50,000 that include things such as Home Offices Garages, Storage areas, and a lot of other. All of this could improve margins continuously and give an enormous competitive advantage when they can completely, or largely, automate the process in order to cut down on the cost of labor.
Modular houses have been tested with mixed results in various occasions throughout the past, but Boxabl certainly appears to be the leader in the area. They’re doing a fantastic job right now and have plenty of room to expand.
It’s obvious that there’s huge quantities of competition in the form of traditional builders for homes, ADU manufactures, RVs 3D printed homes, and much more. But the market is so huge in this area, and there is an extremely high demand for their product that there isn’t much worry to me personally.
Intellectual Branding and Property (11/12)
With hundreds of patents either granted or in the process of being granted, Boxabls IP portfolio is exceptionally strong. Intellectual property is extremely important as home automation is to become a standard procedure, not only could Boxabls patents hinder competitors, but they can also generate millions of dollars in revenues from licensing agreements. Their patent portfolio can give them a two-decade advantage or generate millions of revenues. If this becomes an industry standard and their patent portfolio is the only one that could be worth billions of dollars in the next two decades.
Their branding has been excellent and it’s a very clear, appealing name. It makes the point clear and is top-notch on that front.
Financials & Valuation – 22/30
If there’s a particular place where the business is most lacking in is this. The valuation is excessive, but the revenues are at a low level and all we can make a decision on is speculation.
Valuation – 4/10
This is admittedly one of the weaker aspects. Even though their financials indicate no income, they have already began shipping Boxabls and making them at an average of 2 per day. They’ve already produced more than 100 boxes this year, and have plans to increase the rate to 4 per day in the coming months. That means they’re likely to earn between $35 and 60 million in revenues this year, taking into account 365 days of work and based on the time they make the conversion. It also assumes a revenue of $50,000 per Boxabl. This could be increased if they are able to further commercialize it.
It means that their value is between 50 and 80 times this year’s revenue. The rule is that anything higher than 10x forward revenue is quite expensive for the majority of sectors. However that this might be a lot more. It will go on for months, probably and while it’s unlikely that you’ll get the chance to invest this amount later on, but however, it could be worthwhile. It’s also contingent on the type of industry you define this to be. Many high-growth companies can take an acceptable multiple since they are able to afford that luxury however, the majority of construction firms have revenues that are around 1-2x. They do have a vast IP portfolio and focus on automation and industrialization, ADUs, and a range of other industries. They tend to have more multiples, so based on the category you categorize this to be, it may be more beneficial.
When it comes to mitigating the risk with regards to mitigating factors, a solid IP portfolio with high growth, lots of demand, as well as a huge number of pre-orders can help improve the situation.
Momentum — 10/10
Their momentum is undeniably solid. Their first day was the biggest 1 day amount of money raised on StartEngine They’ve also been contacted by Elon and they’ve got sufficient reservations that could last for the next decade if they could get to double their current output. With an estimated 80,000 pre-orders, they can make 20 Boxabls every day ($365m annual revenue) however it will take them another decade to complete the current orders. In addition that they’ll likely receive more orders during that time which means that production is not the only problem. As I understand it, this is not 80,000 units that have been pre-ordered instead, 80,000 people who have indicated their desire to buy. This includes a variety of major developers of real estate, and includes an agreement with D.R. Horton which is the biggest home builder within the U.S.
Therefore, it’s likely that the an 80,000 figure is much higher. It’s obvious that they’ll keep operating without major advertisement for the near future.
Revenue and Financials 8/10
They’ve been fundraising for the last year, and have been raking in $100,000 per day in revenues (Well it is possible that some of the revenue will be delayed or paid overtime but they still) thus the cash flows are likely to be strong. However, since they are accelerating their growth and building a huge factory (Their utilization of funds is to construct a billion dollars or more factory) It is most likely to be burning through funds, which could be an issue. They have built a complete factory from scratch to producing 2 boxes per day in just only a few months, so this high-growth approach is great for investors, but a few blunders could have a negative impact. They’re currently raising $1 billionor more for a huge manufacturing facility, which would be incredible if they build it and get it to market however if they need to take on a lot of debt or things aren’t as they were planned as well, things may not go as planned.
Additionally, revenues are strong and expanding rapidly, but in relation to the value of their business the company’s performance is not as high in the moment. Although high-growth businesses, as well as those that are in the crowdfunding industry, are rewarded with a premium however, it’s expensive. They have a straightforward path to growing the revenue they earn and plenty of chances to increase revenue through IP licensing, to the upcharges for Casitas which is why it has a high score.
Founders and Team – 20/25
As with all ventures, this is an enormous undertaking and the co-founders perform quite well. A solid team is crucial as, in theory when they’ve had an exit in the past they will be able to do it again, and they know what they need to do. They will not make the same mistakes again, are equipped with contacts and knowledge and won’t be more hesitant to make decisions.
In this article, they just list only a few bios of individuals however, the Co-Founders are each long-time entrepreneurs. Paolo is the owner of more than 150 patents, and has licensed the patents, while Boxabl’s portfolio is already very robust, which adds an enormous amount of value. Being able to control and license a portfolio of patents is a major advantage and generate a lot of bonus income.
Although Galiano does not have specific exits however, he has previously-owned ventures, and is an entrepreneur.
In the end, they’ve constructed the company, possibly with a valuation of $3bn and probably thousands of million in revenue this year, and it does earn the company a lot of points.
Exit Potential and ‘X-Factor” – 10/10
Most companies plan at IPO after they have crossed the $100 million/year revenue threshold. Boxabl will likely surpass this threshold in 2023 and is an easy ramp-up to billions of dollars in potential income as they continuously build more houses. The IPO opportunity here is as good as you can receive from a company, but it’s only an issue of the right time.
“X-Factor “X-Factor” is a kind of thing that I am including, but mostly to highlight the coolest aspects of a company. This is a good example. Elon Musk owns one and it’s located on his Starbase as well as has posted tweets about Boxabl at least a few times, which is huge. Furthermore, they’ve got the most attention at the most favorable time for the market which may ever be. North America and Europe are close to an economic crisis in the housing market and traditional materials are out of stock and prices are soaring. The time to think about alternatives has never been more ideal, ever.
Take all of this into consideration and add the massive market demand and I believe this could quickly become a $100 billion company in the next 10 years.
Conclusion – 85/100
In the end the company is extremely solid in this area and the biggest issue is the valuation. Although it’s too high, the others of the company are extremely solid. The most important thing to consider is whether you believe that they can successfully manage their ramp-up process with their massive factory and whether the current price is worth it in the near future. It is possible that they will not get another Equity Crowdfunding campaign after this, which means this could be the final chance for retail to raise funds prior to an IPO.
Disclaimer: Do not seek investment or taking legal or tax advice. Always conduct your own investigation. Every statement I make must not be taken to mean a fact.
