Click here to read this article written by Rod Turner for Forbes.
Arcimoto intends to become the second pure play EV company to make a NASDAQ public offering - the first being Tesla(NASDAQ:TSLA), of course.
The company has developed an innovative electric powered three wheeled EV that features:
- A base price of $11,900
- A range of 70/130 miles
- 230 mpg(e)
- Acceleration to 60 mph in 7.5 seconds.
Arcimoto has also come up with a new label for their ride: Fun Utility Vehicle – or “FUV.” They will be selling it directly to the customer, initially on the west coast. The FUV is available in two models: open-air and fully enclosed, for greater protection against the elements.
Arcimoto is based in Eugene, Oregon, and has a unique and highly efficient manufacturing and development process. They are now producing their first units by hand after raising a total of $10 million prior to this Reg A+ offering. My sense is that Arcimoto has established a modern-era high water mark of capital efficiency by developing their new vehicle with so little invested capital.
The investment research firm Zacks projects they will achieve modest scale production in 2018 and 10,000 per annum scale in 2019.
CEO Mark Frohnmayer says, “Cutting my teeth in the games business taught me a ton about keeping it simple. Find the core appeal that yields a truly fun experience, and then build just enough of a product around it to meet the needs of the audience. Adding more stuff doesn't always make for a better experience, and it always carries a cost multiplier in terms of development time, testing, tooling, and production.”
The combination of fun driving dynamics, easy parking, and 226 miles per gallon fuel economy, with up to a 130-mile range and a starting price of $11,900 – all these make the Arcimoto two-seater an intriguing purchase. At a time when many car owners are considering a transition to owning fewer vehicles, I can see that a segment of car buyers will find the Arcimoto SRK an attractive complement to their current car or their use of Lyft or Uber. Buyers who are environmentally conscious and those with limited parking options could also find the SRK appealing.
The company intends to list on the NASDAQ at the end of their capital raising process . Consistent with Arcimoto's highly cost-efficient approach, they are planning to raise a maximum of $30 million in their Reg A+ with a pre-raise valuation of $83.4 million. Their online marketing program delivered $1 million of invested capital in the first two weeks of the offering which launched in early August.
Arcimoto is using a hybrid capital raising method made possible by Reg A+ (What is Reg A+?). This means:
Marketing online through social media, Google advertising, public relations, and other levered digital online methods to bring in consumer investors of all wealth levels from anywhere in the world (key features of Reg A+) to their online offering. With the cost benefit this marketing effort also draws in prospective buyers of their EV.
Engaging with more sophisticated investors and potential institutional investors through a syndicate of broker-dealers set up by the underwriter WR Hambrecht of Google IPO fame, founded and led by Bill Hambrecht, who earlier built Hambrecht & Quist.
I understand that CEO Mark Frohnmayer recently arranged for WR Hambrecht's broker-dealers to test drive it - there's no substitute for personal exposure to a new car. Smart marketing like this combined with an appealing product makes all the difference.
One thing I really like to see is a management team who pay themselves skinny salaries and depend on the future value of their stock for their return – it aligns their interests with those of the investor, in my view. CEO Mark Frohnmayer is paid $65,000 a year salary with no cash bonus, and CFO Doug Campoli is paid $55,000 a year. This gives you a sense of how the company has made so much progress on such a small amount of capital. All team members have been granted stock options in the company, which helps keep cash expenses under control. Arcimoto signed a lease for their manufacturing facility yesterday, check their Newsletter for more current details.
“Regulation A+ is the missing link in capital formation,” says Frohnmayer. “It gives a lot more confidence in your fundraising potential and truly opens up the marketing opportunity to reach out to investors. For the first time in 15 years small companies can now do an IPO," he added.
Zacks is forecasting revenues for Arcimoto of $29 million in 2018 and $120 million in 2019. See the List Of Service Providers for the Arcimoto offering.
Full disclosure: I am hosting the offering on Manhattan Street Capital's website. See the Manhattan Street Capital fees for this offering
Rod Turner is the founder and CEO of Manhattan Street Capital, the #1 Growth Capital marketplace for mature startups and mid sized companies to raise capital using Regulation A+. Turner has played a key role in building successful companies including Symantec/Norton (SYMC), Ashton Tate, MicroPort, Knowledge Adventure and more. He is an experienced investor who has built a Venture Capital business (Irvine Ventures) and has made angel and mezzanine investments in companies such as Bloom, Amyris (AMRS), Ask Jeeves and eASIC.
Manhattan Street Capital, 5694 Mission Center Rd, Suite 602-468, San Diego, CA 92108.