As restaurants around the country reopen, then close, then reopen, folks are still lining up to place orders at food trucks. But there’s less time spent waiting thanks to TruckBux, an app for food trucks. How can you invest in TruckBux to benefit from industry disruption?
Food trucks are a big business — as in $2 billion — in the U.S. Food trucks are an industry that, even before the novel coronavirus shuttered traditional restaurants, was outgrowing brick-and-mortar locations. The industry clocked in annual growth of 5.4% versus 4.3%. The average revenue stream of a food truck is $290,000.
Most industry analysts chart the surge in food truck popularity to the 2008 financial crisis. It’s likely that 2020 will soon be seen as another inflection point. Would-be restaurateurs and now-displaced chefs see the truck as a feasible alternative to pursue their culinary dreams.
Long Lines Are a Catalyst for TruckBux
You’ve seen it. The line for a popular food truck is winding its way around the block. It’s a cash-only transaction. And, the truck element can make its location hard to find.
Those are the problems that TruckBux solves. It effectively puts a full-stack online ordering platform in the hands of eaters. The app allows customers to find nearby or favorite food trucks. It allows them to order ahead — for pick-up or delivery. Consumers can pay via a traditional card or a payments app.
TruckBux helps food truck operators receive orders in advance. Food trucks blast out their live location, integrating with social media platforms. And in real time, the TruckBux app provides a broad array of data to analyze sales by product, location or time of day.
Software or Mobile Tacos?
Yet despite the mobile tacos, falafel and knish vendors that it serves, management will tell you that TruckBux is a pure software company. Investors may see brick-and-mortar restaurants as the prime competition for food trucks. But the company sees Grubhub (NYSE:GRUB), DoorDash and Uber (NYSE:UBER) as its rivals.
There are other startups trying to disrupt niche markets in the food truck business. EzCater and Roaming Hunger are squarely in the business of booking food trucks for events and catering.
TruckBux lists that it achieved more that $157,000 in gross merchandise value in 2019, using a fairly standard metric of marketplace sites. It shows that more than 60 food trucks are on the platform, with nearly 10,000 app downloads.
Some of its customers do more than 120 orders a day via the TruckBux platform.
Interestingly, TruckBux has a delivery integration with Postmates, giving the app the ability to deliver in all 50 states. Postmates recently agreed to an acquisition by Uber.
Uber’s deal with Postmates has TruckBux “energized.” Founder and CEO Nick Nanakos wrote on a TruckBux chat that the deal “will only strengthen our delivery model by providing a higher supply of drivers, capability, and technology. Our service will become more efficient, faster, and reliable.”
How to Invest in TruckBux
TruckBux is raising money now on SeedInvest in what the startup says is a 45-day fundraising campaign. The company’s website advises that “this is the only time we will ever open fundraising to the public, so there is a limited window.” SeedInvest shows that the window closes on July 31.
TruckBux has currently raised $140,900 toward a $1 million total. There’s a $6 million valuation cap.
As the term sheet details, the minimum investment for non-accredited investors is $1,000. For accredited investors, that minimum is $10,000. The offering is a side-by-side deal, raising capital under two offering types. If you plan on investing less than $20,000, you will automatically invest under the Regulation CF offering type. If you invest more than $20,000, you must be an accredited investor and invest under the Regulation D offering type.
As for prior fundraising, TruckBux raised $40,000 via equity in October 2017. It pulled in another $210,000 a year ago in a SAFE note sale. Its SeedInvest fine print notes, “The Company issued a total of eight convertible equity securities for cash proceeds of $123,000 between April 2018 and July 2019,” among the risks and disclosures. The sole VC investor to date is Houston-based EES Ventures.
Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups. He was previously emerging markets editor for Bloomberg News in Tel Aviv. He is a contributor to the Powered by Battery blog. Robert does not own 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
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