Kangaroo is the developer of an affordable home security system. To ramp up its efforts, the company is also raising capital. In fact, anyone can invest in Kangaroo since it is using the crowdfunding platform, Republic. The minimum investment is $150.
The CEO and co-founder of the company, Maximus Yaney, is a veteran of the tech world. He has managed two exits – one of his companies was sold to Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) – and has raised venture capital from firms like Greycroft and Lerer Hippeau.
“After selling my first company to Google, and starting another one that went public,” said Yaney, “I became obsessed with the idea of positively impacting a billion lives. My team and I saw an opportunity to bring home security to everyone — not just the few percent who could afford a costly system. We set out to serve the underserved. We remain relentlessly committed and focused on our mission to make smart home security accessible to everyone.”
A Closer Look
Kangaroo’s main offering is a five-piece kit, which includes two motion and entry sensors, one siren/keyboard, two roo tags, one yard sign and five window decals. Setting this up only take a few minutes and you can control everything via a smartphone.
“We respect our customers’ wallets, and we make sophisticated products and technology easy to use,” said Yaney. “By leveraging the full ecosystem that has developed around our category and staying hyper focused on simplicity, we’ve effectively removed the two biggest sticking points for consumers. By comparison, our professional monitoring is $10 per month while others are in the $40-to-$60 range. That’s a huge savings for the customer, but it also enables a much higher attach rate to paid services for us taking the pressure off of hardware margins.”
Another key for whether to invest in Kangaroo is the market opportunity. And yes, it is enormous. According to research from SafeHome.org, about 10 million households plan to purchase a home security system within the next year and about 40 million are considering a purchase.
But Kangaroo’s low-cost model should open up new opportunities for customer acquisition. The company estimates this at about $3 billion.
As for traction, the company has more than 20,000 users. Besides selling through its website and mobile apps, Kangaroo has distribution with Office Depot, QVC and Micro Center. The company is also in discussions with Home Depot (NYSE:HD) and Walmart (NYSE:WMT).
Invest In Kangaroo?
The company has already raised $18 million from venture capitalists. “Greycroft led our last two financing rounds and it has just been a game changer to work with them,” said Yaney. “They got really hands-on and helped grow the business across the board.”
For the crowdfunding campaign, the company has raised over $28,000 from more than 140 investors. The funding involves a SAFE (Simple Agreement for Future Equity) instrument, which has a trigger for when equity is allocated. This is usually for if there is an acquisition, IPO or subsequent funding.
The equity crowdfunding round also includes a variety of perks that are based on the amount invested. For example, if you commit to $300, then you get two home security kits as well as two one-year subscriptions for the app.
“Crowdfunding provides an incredible opportunity to have the right alignment and connect with real-world customers,” said Yaney.
But of course, as is the case with any early-stage investment, there are risks. The market has many large players, which have the resources to invest heavily in new technologies. Kangaroo’s low-cost model will make it tough to reach profitability.
Thus, before making an investment, it’s important for investors to do their own research and analysis.
Tom Taulli (@ttaulli) is an advisor and author of various books and online courses about technology, including Artificial Intelligence Basics, The Robotic Process Automation Handbook and Learn Python Super Fast. He is also the founder of WebIPO, which was one of the first platforms for public offerings during the 1990s. As of this writing, he did not hold a position in any of the aforementioned securities.
Investing through equity and real estate crowdfunding or asset tokenization requires a high degree of risk tolerance. Despite what individual companies may promise, there’s always the chance of losing a portion, or the entirety, of your investment. These risks include:
1) Greater chance of failure
2) Risk of fraudulent activity
3) Lack of liquidity
4) Economic downturns
5) Dearth of investor education
Read more: Private Investing Risks