Editor’s note: This article was updated on April 30 to replace information about the osteoporosis market with information on the osteoarthritis market.
SeedInvest is one of the top platforms for equity crowdfunding. Founded in 2012, the company has been able to help provide more than $250 million in funding for its startups. The platform also has more than 450,000 investors on it.
For the most part, the deals on SeedInvest are larger, such as the startups on its Regulation A+ level. For that “Mini-IPO” category, startups can raise as much as $50 million.
No doubt, this focus can be an advantage. Often, startups on the platform already have market traction as well as backing from experienced venture investors. In other words, the risks can be somewhat lower when it comes to these crowdfunding deals. Yet, SeedInvest’s minimum investment level is still reasonable at $200.
So, are you looking to invest in startups? If so, here are seven interesting names on SeedInvest:
The Best Startups You Can Buy: Perfitly
While ecommerce for apparel goods continues to grow at a rapid pace and is disrupting the traditional retail industry, there are a host of problems. Just some include the low conversion rates on web sites and apps, the high product returns because of ill-fitting clothes and even the damage to the environment (the apparel segment is the second biggest polluter in the world).
So, how to solve the problems? Well, Perfitly believes it has a good approach. The company is the developer of an online visualization system that helps with fitting of apparel. It’s an end-to-end solution that allows for a “try before you buy” approach that uses sophisticated avatars, measurements and AR (Augmented Reality).
Perfitly has conducted a pilot with a top retailer. The results: there was a two-thirds reduction in returns and the conversation rate jumped 80%.
Since then, there have been six deployments, from small to large retailers. For 2020, the revenues are estimated at $206,000 and are forecasted to reach $1.85 million. As for 2024, the expectation is that they will hit $151 million.
For the equity crowdfunding round, the company has raised over $129,000 and the valuation is $15 million. The minimum investment is $1,000.
Mime is another startup among the options to invest in startups on SeedInvest that is focused on improving the e-commerce experience. But this company’s focus is on the beauty industry. To be more specific, Mime has developed an app to match the color of makeup to skin tone.
This is no easy feat — especially when done online. Keep in mind that over three million people search the phrase “how to match my foundation” and similar queries on Google.
Mime’s first product is a foundation share finder. The app asks a few questions and then there is analysis — which leverages AI — of the user’s photo.
In terms of the traction, a large European retailer has piloted the app and there was a 5X increase in the conversion rate for purchases within a 20-day period. What’s more, Cult Beauty has invested in the company, which is similar too Sephora in Europe.
Regarding the equity crowdfunding round, Mime has raised $51,000 and the valuation is $7 million. The minimum investment is $1,000.
Virtual Reality (VR) has not lived up to the lofty expectations in terms of the market potential. But Virtuix wants to change this. The company is the developer of Omni, which is a multi-directional treadmill that allows users to walk and run in virtual environments.
The company has certainly been growing at a strong pace, as the revenues more than doubled last year. There are currently 3,650 systems deployed across 45 countries and some of the venues include Dave & Buster’s (NASDAQ:PLAY).
Note that the company also has top-notch investors like Mark Cuban. He has said this about Virtuix: “I believe in the Virtuix team and product. Now is the time to bring the popular Omni gaming experience to the home.”
So yes, last year the company launched its version for the home, which is called Omni One. The business model involves monthly recurring subscriptions and game sales.
As for the equity crowdfunding round, the company has raised over $6.5 million from over 2,500 investors and the valuation is $65 million. The minimum investment is $998.
Cytonics is a biotech company that is developing diagnostics and therapeutics for osteoarthritis. The founder and chairman is Gaetano Scuderi, who is a medical doctor and has written more than 45 scientific papers.
He began his quest to find the source of joint pain by assuming that there must be some compound that forms when cartilage begins to degrade due to arthritis. He also saw that alpha-2-macroglobulin (A2M) — a naturally occurring molecule in the body — could be useful in dealing with this. However, the problem is that the joints usually have low amounts.
With this insight, he set out to develop a treatment called APIC. It essentially improves the overall levels of A2M (it is injected once or twice a year). There are currently more than 7,000 patients that have used APIC.
Moreover, Cytonics is now developing a next-generation version of this treatment: CYT-108. It focuses on the creation of a new region within the A2M protein to get even better results. It is in preclinical trials.
No doubt, the market opportunity for these offerings is sizeable. ReportLinker suggests that “The global osteoarthritis therapeutics market is projected to reach USD 11.0 billion by 2025 from USD 7.3 billion in 2020.” Osteoarthritis in the knee is expected to make up the lion’s share of that market.
Cytonics has raised $15 million since inception. There was also $4 million from Synthes, which is a division of Johnson & Johnson (NYSE:JNJ). As for the crowdfunding campaign, the company has raised more than $1.2 million at a valuation of $46.7 million.
Groundfloor operates a platform that offers investors high-yield, short-term debt for real estate assets. Yes, because of the Covid-19 pandemic, this asset class has been under pressure. But by having the protection of debt, this should help with the risks.
How does Groundfloor work? The company originates and underwrites the loans that are converted into investment securities. They are then qualified by the SEC (Securities and Exchange Commission). By doing this, it is possible to sell the debt on a fractional basis for as low as $10.
Launched about seven years ago, Groundfloor has been able to generate 10% average annual returns. The debt investments cover 31 states and the annual volume is over $100 million.
The company has been able to raise over $22 million since inception, and some of the investors include venture capitalists like Fintech Ventures and MDO ventures. For the equity crowdfunding campaign, Groundfloor has raised over $3.4 million from over 1,900 investors and the valuation is $73.9 million. The minimum investment is $984.
During the financial crisis of 2008, Chris Loeffler and Jennifer Schrader saw an opportunity to leverage the internet for real estate investing. It was a gutsy decision, but it has definitely paid off.
The startup was Caliber, and it has become a strong player in its category. The platform allows individual investors to get exposure to long-term real estate investments, such as commercial properties, multi-family units, hospitality, warehouses and tax-advantaged opportunity zones.
A key part of the business is the focus on due diligence. This has certainly helped reduce the risk levels. But Caliber also has a strong team that manages the portfolio, which has a value of over $440 million. The returns have also been particularly strong, averaging 39%.
Note that the company has multiple revenue streams. They include management fees, brokerage commissions and carried interest (which is the profit generated from the portfolio).
Regarding the crowdfunding campaign, the company has raised nearly $3.3 million from those who invest in startups. The valuation is at $130 million and the minimum investment is $2,000.
It does look like the cannabis industry is coming out of its long slump. And yes, there are a variety of startups to invest in to capitalize on the turnaround.
One is called Leafwire. The company operates a digital platform that provides news, events, jobs listings and community features. The mission is to become the LinkedIn of the cannabis industry.
Anyone can join for free. But there are paid features. The company also generates income from ads and listings. There even a monthly subscription service.
Since the launch in January 2019, the member base has grown to over 36,000 and the MAUs (Monthly Active Users) are more than 25,000. As for revenues, they are over $25,000 on a monthly basis.
Regarding for the crowdfunding campaign, the company has raised over $551,000 and the valuation is $8 million. The minimum investment is $500.
On the date of publication, Tom Taulli did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Tom Taulli (@ttaulli) is the author of various books on investing and technology, including Artificial Intelligence Basics, High-Profit IPO Strategies and All About Short Selling. He is also the author of courses on topics like the Python language and COBOL.