ARKHAUS

A combination hospitality & property-tech project, the ARKHAUS investment opportunity has been structured to target venture-scale returns.

Currently, only one global player exists in the rapidly expanding market of private membership clubs: Soho House. More importantly, this space has not seen any innovation for decades. The market is yearning for a new player - one that can innovate to excite its clientele and compete globally.

• REVENUE:  Unlike most early stage companies which generate revenue many years after their initial investment, ARKHAUS is already generating revenue in advance of launch; The Miami club is actively collecting full membership dues from pre-sale applicants.

• SCALE:  Hospitality and Real-Estate investments are generally made into a single location. This investment is into the ARKHAUS parent company and, as such, will benefit from all future locations.

• MULTIPLE:  IB Research analysts target a mid to high teens (EV/EBITDA) multiple for the hospitality sector. A detailed examination of analyst reports provides an average 16.4X multiple for a mature membership club business.

• EXIT:  With sights set on becoming the second global player, and with a differentiated offering, ARKHAUS aims to become an exciting acquisition target. The company will consider such an acquisition, or alternatively, target a 5-7 year exit to Private Equity or IPO.

• CURRENT vs FUTURE INVESTMENT ROUNDS:  This investment is into the ARKHAUS parent company and will benefit from all future ARKHAUS locations as well.

Positioned to redefine the members club of yesteryear, ARKHAUS connects 4 futuristic solar-electric yachts to anchor an exciting new vision where community, innovation, and fun collide.

Members can meet, relax or entertain from the modular floating villa, complete with outdoor decks & rooftop lounges overlooking a protected pool in the center. Each vessel is a ~2100sf livable yacht, designed and manufactured by Miami-based shipbuilder, Arkup. With 640 sf of interior space, a 640 sf open roof deck covered by a solar canopy, and wraparound decks, each unit is a mini mansion floating on water. 

To form the club, four Arkup vessels connect and deploy their retractable spuds, anchoring and elevating the club into a solid platform hovering a few feet above water. Eliminating any rocking or motion from the waves, the result is a diamond-shaped platform comprised of wraparound decks that frame a filtered, bay water pool.

On ARKHAUS, guests will experience 360 degrees of activities, entertainment, and amenities across the multi-level structures which will be split between private dining and communal space.

The network of ARKHAUS social clubs will eventually approach a maximum number of clubs which we do not intend to exceed (projected at 40-50 locations). This limit, however, leaves the dominant portion of the world's waterways untapped.

Waterfront hospitality businesses worldwide have a desire to expand, yet no method to do so. Pinned in by competitors to their left, right, and behind, the only direction they can expand is onto water. However, the undertaking and resources required to do so is too large for a single business.

Having established a deep knowledge-base and capabilities offering, ARKHAUS will expand to provide a FHAAS solution (Floating-Hospitality-as-a-Service) to hospitality companies worldwide, empowering them to expand their footprint to water. This turnkey solution will offer the ideation, concept design, vessel procurement, integrated financing, staffing, and operation necessary to bring any floating hospitality effort to life in a seamless, efficient, and riskless manner. 

While Phase II presents tremendous scale opportunity, the ARKHAUS Crew is fully focused on executing on Phase I first. As such, the rest of this presentation will focus on ARKHAUS - the global network of floating private social clubs.

The rate of pre-sale memberships is outpacing projections, demonstrating the tremendous market demand for a new type of member club.

Word of mouth sold over half of Tier 1 Annual Memberships before the release of any primary marketing materials. An initially budgeted $400k for marketing provided a CAC of $1,111 for 360 memberships. However, an early social media advertising test has demonstrated an actual CAC of $472, 58% lower than initial projections. The growing market awareness, applicant excitement, and a larger and more refined advertising budget will combine to drive the CAC even further down.

Prior to opening, interested members can submit an application with a refundable deposit, available in 3 Tiers:

• Tier 1 | 80 available -- $5,000 [FILLED]
• Tier 2 | 90 available -- $6,250 [FILLED]
• Tier 3 | 180 available -- $7,500 [PRE-SELLING NOW]
  
• NFT Forever Memberships | 10 Total, 5 Sold, 5 Available -- The club of the future isn't complete without the membership type of the future. ARKHAUS is offering a very limited 10 'Forever Memberships' via NFT, of which 5 have sold for an average of 9.0 ETH ($24K+ USD equivalent at time of sale).

Following a successful 6 month pop-up at the world-renowned Faena Hotel's Bazaar rooftop, CSTM HAUS Miami served to assess, ideate, and develop the evolution of the membership club: ARKHAUS. Announcing ARKHAUS in June of 2021, an aggressive but manageable roadmap was launched.

• (T-9 mo) Assets
  Begin production of the vessels upon closing investment round, with a 30% deposit to fund USA-based shipbuilding.
• (T-7 mo) Location
  Narrow private discussions with preferred options to secure location and docking agreement
• (T-6 mo) Membership Agreement
  Finalize details in a uniquely crafted agreement that allows members and guests access to all four boats
• (T-5 mo) Memberships Awarded
  With the location and membership agreements finalized, we will begin to select and award memberships to applicants.
• (T-4 mo) Vendors & Partners
  Select entertainment, food & beverage, maintenance, and other vendors from our curated roster.
• (T-2 mo) Staffing
  Hire 32 staff members across management, captains, hosts, lifeguards, bartenders, servers, operations, facilities, and security.
• (T-1 mo) Training
  Engage in a rigorous hospitality and safety training program.

Revenue is driven by a combination of membership dues, guest passes, and food & beverage sales. The club's capacity is governed by 'Capacity Hours' that are available to members and guest. 'Capacity Usage' is the Actual Used Capacity Hours divided by the Total Capacity Hours Available. Selling only a conservative 360 memberships and expecting an average of 2 guests per member visit, ARKHAUS anticipates operating at 50% Capacity usage in most of year 1.

After monitoring safety and experience at 50%, as well as alternative revenue opportunities during year 1, the club can opt to sell a greater number of memberships or allow more guests in order to approach 75% or 100% Capacity Usage scenarios.

With food & beverage sales as the second source of revenue, Other Income will also be generated in the form of cabana rentals, event bookings, charters, and activity rentals.

With a projected annual top-line revenue of $10.7mm in year 1 of full operations, ARKHAUS still leaves much room for growth 1) on a per location basis, and 2) via global expansion.

Per Location

ARKHAUS will initially offer only 360 total memberships (350 annual + 10 NFTs) at reduced pre-sale rates. In year 2, all pre-sale members will lock into a $7500 annual rate, which will increase membership revenue from $2.31mm to up to $2.8mm. Over time, as memberships are retired, new members will sign up at $10k annually. A full 350 annual membership base at $10k annual will increase membership dues revenue to $3.5mm annually.

More importantly, 360 members plus an average of 2 guests per visit only results in 50% of Capacity Usage. This metric is the Actual Used Capacity Hours Used divided by the Total Capacity Hours Available. After monitoring safety and experience at 50%, as well as alternative revenue opportunities during year 1, ARKHAUS can offer a greater number of memberships to those on the wait list, eventually reaching 75% or nearing 100% Capacity Usage scenarios.

By expanding Memberships, which also serves to increase Guest Pass revenue as well as Food & Beverage revenue, ARKHAUS can approach $16mm (75%) and $21mm (100%) in top-line revenue.

Global Expansion

With the Miami location open and generating buzz, ARKHAUS will accelerate the expansion plans it is quietly deploying. As discussed in the Vision section above, ARKHAUS will open 7 clubs in its first 5 years, and 25-30 more in a subsequent 5-year expansion phase.

Summary: With highly attractive base economics per location, increasing per unit gross revenue combined with location expansion serve to create a multiplier effect in growth. As this investment is offered by the parent company ARKHAUS Inc., your investment will benefit from all single club growth and all future locations, creating a truly scalable hospitality business.

While many competitors in the private members club market prove consumer demand, Soho House reigns supreme as the only global player. In July 2021, Soho House’s parent company, Membership Collective Group (ticker: MCG) IPO’d, providing vast information to analyze ARKHAUS’ market potential.

Analysis of 5 Investment Bank research reports (Bank of America, JP Morgan, Morgan Stanley, Loop Capital Markets, HSBC) results in an average EV/EBITDA multiple targets of 16.4x for year-end 2023.

We then apply this multiple to the projected1st year of full ARKHAUS operations to obtain a projected valuation

Summary: Investment in this round is at a $20mm valuation ($15mm for Early Bird). The above analysis indicates a single Miami ARKHAUS location will be valued at $77mm (applying a more conservative 12x multiple for single location). With 6 additional locations opened, ARKHAUS would be valued at projected $747mm (applying the same 16.4x multiple as Soho House).

With $550k already raised, this investment round will accelerate ARKHAUS towards reality. Since the prior crowdfunding campaign, the company has made tremendous progress (see Traction above).

Vessel deposits
A deposit must be placed to secure financing and begin production of the 4 vessels. US-based production will take approximately 6 months.

Membership marketing
The Marketing budget will be allocated toward content creation, digital marketing, and member acquisition events. As membership presales have exceeded expectations for a favorable Customer Acquisition Cost, ARKHAUS will have the flexibility to allocate this surplus towards further marketing or other operations.

Pre-launch operations
ARKHAUS must undertake a variety of operational activities including surveying, legal, agreements, club furnishings, payroll, and other ancillary expenses.

WeFunder Fee
7.5% of funds raised will go towards the WeFunder fee.

Other Marketing Fees
ARKHAUS 17b Disclosure

Work Days - Limitless Views Inspire
Break away from the office to work with a view, or host a lunch meeting in style.

Play Days - Indulge & Let Loose
The fun is just getting started as the week comes to an end. Featuring resident DJs and performances, join us on the weekends as we unwind and party on deck—with bookable cabanas, daybeds, rooftop jacuzzis, and food & bar service.

Evenings - The Night Caps
As the sun sets and the moon rises, mix & mingle with rooftop cocktails and great company.

Membership details

• Food & Beverage:  On-board dining will span from breakfast to dinner, featuring fresh, rotating menus from local noteworthy chefs and restaurateurs. Beverage service will be available on board at the bar or through the wait staff.
• Programming:  Members and guests will have access to weekly hosted events—from master mixologist cocktail hours to world class music performances to the latest in health & wellness activities.
• Access:  Every member will receive 30 hours of access to the club per month.
• Guests:  Members can choose to draw on their 30 hours of access or purchase guest passes.
• Charters:  Only members can charter individual ARKHAUS vessels for private experiences. Whether they keep the vessel connected for a private party or disconnect for a sunset sail, members are sure to offer their guests an unforgettable experience.

With only 360 memberships available, ARKHAUS has the luxury of staying true to its core culture. This means members enjoy exclusivity and fun without the drama. Access will be limited to Members and their Guests.

Membership Demographics

By design, our application process allows us to handpick a curated membership base. Every application is followed by a 1:1 conversion to assess the demographic mix, according to the following targets:

While competitors such as Soho Beach House, Fisher Island Club, and Bath Club are all based on land, ARKHAUS is securing its market position as the next generation-floating members club.

COMPETITORS:
Soho Beach House | The Bath Club | Faena Rose | 1 Beach Club
Fisher Island Club | The Edition Club| The Standard Sp

Miami and many other cities with an active boating and aquatic culture present a great opportunity for a differentiated marine-based club. However, yachts and boats do not provide suitable configurations or headcount capacities for this, which means no other membership club has been able to expand into this space.

In partnership with the designers and manufacturers of the vessels, ARKHAUS envisioned a way to accommodate the necessary hospitality operations, redefining the concept of the membership club both in terms of the venue as well as the experience.

Anchored in Smart Design
Outfitted with electric engines, solar rooftops, and spuds that elevate the entire platform out of the water, the modular club is built on four Arkup 40' vessels; a state-of-the-art mansion on water meets the next generation of Transformers.

Charting the Course for Our Collective Future
As sea levels rise and water-based cities like Miami face the inevitable reality of disappearing coastlines, ARKHAUS looks ahead to marry Green Tech with Blue Tech through a partnership with Seaworthy Collective, an organization that drives regenerative ocean and climate impact through its community of current and aspiring entrepreneurs known as sea change makers. The partnership is part of ARKHAUS’ “Party up top, Research on the Bottom,” a campaign that aims to equip ARKHAUS vessels with innovative startup solutions, such as drones that will run underwater operations like mangrove restoration and cleanup, among other initiatives.

Power in The Members' Hands
Gone are the days of membership dues leading to red velvet ropes and anonymous crowds. Today's luxury depends on those who are at the forefront of the changing tides, and forming community around them. All perks and member benefits (such as vessel charters) are designed to enhance the members' lifestyle. With only 360 memberships available in Year 1, the value of exclusivity reaches beyond enjoyment of the club -- it also means opening doors and creating access to unique opportunities that will, in turn, recharge the caliber of the membership as a whole.

What we stand for
We're building a membership club that breaks the mold. A club for the world's disruptors, innovators, and those who care about moving the world forward. In a nutshell, we're creating a community of good work by day, and good people by night.

As a marine-based offering, the primary governmental interface for ARKHAUS is the US Coast Guard. The company will have to secure its business filing, liquor licenses, entertainment permits as required by city of Miami, Miami-Dade County, and the State of Florida. However, ARKHAUS' location and its operations are governed by USCG.

The US Coast Guard governs all bodies of water in the USA. Once ARKHAUS establishes and approves its Miami operations with the USCG, it can deploy clubs nationwide using the same framework. Opening a new club simply requires 1) producing the vessels, 2) pre-selling the membership, 3) identifying the location, and 4) selecting food, beverage, and entertainment partners.

ARKHAUS has engaged maritime-specialized legal counsel, Holland & Knight. H&K has been in regular communication with USCG, working to verify every aspect of operations. They have already produced a legal memo which clarifies the exact mode of operations that fit within the USGC regulatory framework.

Flagship Location: Miami

Boasting open water views and positioned away from marine traffic, ARKHAUS has the ability to be permanently docked with a hospitality partners, or "floating" a few hundred feet from the seawall.

The Miami location has been identified, negotiated, and agreed to in principle. ARKHAUS will soon sign a 2-year lease for said location, but until then, cannot disclose it.  Below are a few potential locations.

ARKHAUS at Paraíso in Miami

ARKHAUS at Maurice Ferré Park in Miami

Future Cities

Expansion beyond Miami will roll out in two separate 5-year phases. 

Once the first location is live and generating buzz in Miami, pre-sale memberships will be made available to future locations in New York City, Los Angeles, San Francisco, Paris, Istanbul, and Dubai. This is the first 5-year phase of expansion.

With 7 clubs opened in the first 5-year expansion, ARKHAUS will have refined its vessel production, on-board operations, pre-sales marketing and site selection.  In the second 5-year expansion period, ARKHAUS can open 25-30 more locations globally. Any body of water with the appropriate aesthetics, a suitable local economy, and enough tourism draw to attract members from other locations is a potential location.  Options include the French Riviera (Cannes), Sydney, Tulum, Cabo San Lucas, Mykonos, Ibiza, Cape Town, Punta Del Este, Barcelona, the Caribbean, Italy's Amalfi Coast, and many more.

ARKHAUS has already identified hospitality and investment partners in Dubai and Mexico, and continues to receive regular inquires about opportunities to bring ARKHAUS to new destinations.

How CSTM HAUS paved the way for ARKHAUS

Founded in early 2020, CSTM HAUS is a multi­-faceted hospitality business offering a hybrid co-working & lifestyle membership as well as an event space from a single flexible venue.

Following the NYC location in the Meatpacking District's famed "Little Flatiron Building", CSTM HAUS set out to get its feet wet in Miami with a pop-up atop the Faena Hotel's Bazaar Rooftop. The breathtaking views soon became the backdrop for a new kind of membership club: a bright, inspiring space that cultivated a healthy blend of powerhouse networking by day with vibrant fun by night. Events such as the fast-growing #NFTuesdays series gained substantial notoriety, leading to sponsorship from Stella Artois and Diplomático Rum.

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