|1||$1.3M RAISED! BUT YOU CAN STILL INVEST!|
|2||Patented technology increases crop yield by 10% and decreases cost by 10-20%.|
|3||2,000+ sensors deployed across 80+ customers in the US.|
|4||Founder ran 4 startups with multiple exits, including an IPO that led to a $1 billion valuation.|
|5||$1.5M run rate in Q4 2019 and explosive 500% CAGR over the last 3 years.|
|6||$2 billion, recession resilient US market — farmers will farm.|
|7||Multiple moats of competitive advantage to enable long-term competitiveness in a $20B global market.|
|8||Payback period for farmers is less than one growing season.|
When we met Patrick Henry and saw the vision of GroGuru we knew we had to invest. GroGuru is really filling the gap when it comes to the water crisis that the agriculture community is facing. As access to water continues to grow scarce for the farming community around the globe, the GroGuru solution will better help manage farmers crop yield, as well as save them money. With the patented technology that GroGuru has built and the broader adoption of technology into the farming process, we believe GroGuru is positioned to be the leader in the ag tech space for many years to come.
We love the leadership team that has been assembled at GroGruru. With a history of building and exiting previous ventures, we are excited to see what kind of milestones GroGuru can hit along the way. One of the other features that really stood out was the “stickiness” of this product and service. Once farmers adopt this method or technology, it will be hard for them to transition to another service. With all these pieces combined make this a very exciting partnership. We are honored to walk alongside GroGuru as their lead investor.
GroGuru helps farmers implement strategic irrigation management through soil sensors that measure things like soil moisture, temperature, and salinity. We wirelessly transmit this data to the Cloud, where we make AI-based recommendations to farmers about when and how much to irrigate their crops—leading to increased yield, reduced cost, and better crop quality.
A global crisis is brewing, and crop yield MUST increase in order to meet growing demand.
GroGuru helps farmers increase crop yield, while at the same time preserving water and other scarce resources in a sustainable way. As a result, farmers can be more efficient and make more money.
Chris Graebe - CEO at StartupCamp, Investor at RagingBull
Denise Longley - Managing Director at Longley Capital
Matt Shekoyan - VP of Strategy at Sunkist
Ian Buddery - Advisory Board Member at GroGuru, Chairman at Maestrano
Nearly all soil moisture sensors in the market today use cables from the sensors in the ground. This requires labor-intensive annual installation and removal of the sensors, and many farmers do not want any cable-based systems around their crops during harvest. GroGuru solves this problem by eliminating these cables and enabling a permanent installation model for soil sensors.
Our breakthrough Wireless Underground System (WUGS) technology dramatically reduces the total cost of ownership, improves scalability, and gives farmers year-round data through the GroGuru app.
We additionally provide a cable-based permanent installation solution for perennial crops that offers an industry-leading price-performance and uses GroGuru soil sensor technology to measure soil moisture, salinity, and temperature.
According to the FDA, only about 10 percent of farmers in the U.S. (which is a potential $2 billion annual market alone) are using soil sensors today. Farmers that are using this technology are seeing increased crop yield and more efficient use of water and other resources, but the cost of annual replacement has been prohibitive for many. We solve that problem, giving us a unique opportunity in a massive $20 billion potential global market.
We have already deployed over 2,000 sensors across over 80 customers in the United States. This includes deployments on several hundred sites across over 20 crop types including alfalfa, cotton, lemons, walnuts, grapes, asparagus, green beans, blueberries, pistachios, soybeans, corn, hemp, olives, roses, raisins, cannabis, oranges, tomatoes, sorghum, and almonds.
Initial customer deployments started in 2017, and we have now deployed in several key geographies across the US.
We make money both through hardware sales and through our annual subscription model. We’re further growing our revenue channels through planned expansion into contract manufacturing and dealer channels, and we have already achieved a CLTV:CAC ratio of 1:14 via primary dealer sales. As GroGuru continues to scale, we expect to deploy sensing locations every 40 acres instead of every 120 acres and see our CLTV triple.
GroGuru is already actively providing results for farmers around the US. And their feedback says it all:
Over the past three years, we’ve achieved 500% CAGR, and we are confident that we will continue to grow at a rapid pace. Our projections, while not guaranteed, keep us on track to gain over 50,000 subscribers by the end of 2023. Our SAM is $2B in the US and $20B worldwide, in a market with low existing penetration.
Will you join us on our journey? Watch your investment “grow” with us while helping to combat a global crisis.
GroGuru has financial statements ending March 31 2020. Our cash in hand is $239,653.61, as of May 2020. Over the three months prior, revenues averaged $83,199/month, cost of goods sold has averaged $61,853/month, and operational expenses have averaged $152,733/month.
Pursuant to Temporary Rule 201(z)(2) of Regulation Crowdfunding, the Company is omitting the financial statements required by Rule 201(t) in its initial Form C filed with the U.S. Securities and Exchange Commission, which such financial information is not otherwise available and will be provided by an amendment to the offering materials. The investor should review the complete set of offering materials, including previously omitted financial information, prior to making an investment decision. No investment commitments will be accepted until after such financial information has been provided.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
GroGuru helps farmers make more money by increasing crop yield while saving water and other scarce resources in a sustainable way.
We hope to be the leader in strategic irrigation management for commercial farmers, broadening our scope of monitoring and recommendations to other proprietary data sources including micronutrients in the soil.
GroGuru, Inc. was incorporated in the State of Delaware in June 2014.
Since then, we have:
Historical Results of Operations
Liquidity & Capital Resources
To-date, the company has been financed with $2,345,000 in convertible notes and $1,456,007 in SAFEs.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 6 months before we need to raise further capital.
We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.
We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 6 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.
Runway & Short/Mid Term Expenses
GroGuru, Inc. cash in hand is $239,653.61, as of May 2020. Over the last three months, revenues have averaged $83,199/month, cost of goods sold has averaged $61,853/month, and operational expenses have averaged $152,733/month, for an average burn rate of $131,387 per month. Our intent is to be profitable in 12 months.
We have had no material changes to our business since the start of 2020. We continue to add additional customers and drive revenue growth.
We expect to generate revenue of $100,000 per month over the next three months. Over the subsequent three months, we hope revenue to be closer to $200,000 per month or more. During the same period, we expect expenses to hold steady at about $120,000 per month, although we can cut expenses if needed.
We have been granted a SBIR grant of $100,000 that we will get in September 2020. We also generate cash from revenue.
GroGuru continues to have success in selling our products as farmers continue to farm. We have been impacted by Covid19 as it relates to raw materials supply from China including semiconductor components and potting materials for our products. This creates longer lead times for manufacturing our products here in the USA. We have also seen that some farmers have a reluctance to deploy new technologies due to the impact of commodities prices and the general economic impact related to Covid19. It is uncertain what future impact the company will see from Covid19 and the resulting impact on the US and world economy.
GroGuru is in the early stage of a multi-year growth plan. Macroeconomic changes could slow sales growth.
Our future success depends on the efforts of a small management team. The loss of services of any of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.
Laws and regulations in the United States that provides financial incentives to farmers, such as the Farm Bill, could be removed or changed, which could slow sales growth and adeversely effect the company.
GroGuru has protected some of its core intellectual property with United States and international patents (patents owned by GroGuru, Inc.). If these patents are challenged or overturned, this could aversely effect the company.
For GroGuru to execute on its multi-year growth plan, it needs to add key people in target geographies to build sales channels and drive sales growth. If we are unable to hire these key people, it can potentially slow sales growth and could adversely effect the company.
COVID-19 has had an impact on our business. In the first quarter of 2020, we experienced disruption to our supply chain that affected our sales revenue. In addition, our year-to-date revenue is approximately 20-25% lower than our forecasted revenues for the same period. This is also due to the COVID-19 health crisis and its impact on the economy. For example, some farmers have delayed adopting new technology due to the economic impact and uncertainty caused by the COVID-19 pandemic. These factors, coupled with decreased business and consumer confidence and substantial unemployment resulting from the declared global pandemic of COVID-19 and restrictions on activity, have precipitated a sharp economic slowdown and recession, and the economic climate may deteriorate further. The extent and duration of the effects of the COVID-19 pandemic and economic downturn are difficult to predict, which makes our future performance more difficult to predict. If the COVID-19 pandemic and economic downturn persist, or if they worsen, we expect that our business will continue to be adversely affected, resulting in a further negative impact on our business, financial condition, results of operations and cash flows.
We are a growth startup company and are not currently profitable. We expect to need to raise additional capital to further develop our business. We can give no assurance that we will successfully negotiate or obtain additional financing on terms favorable or acceptable to us, or at all. We do not have any commitments for additional financing. Our ability to obtain additional capital will depend on market conditions, the U.S. economy and other factors outside our control. If we do not obtain adequate financing or such financing is not available on acceptable terms, our ability to continue our operations would be significantly limited. If we are not able to sell all of the securities offered in this financing, or complete such additional equity or debt financing, we may not have the funds necessary to fully execute our objectives. Our failure to secure necessary financing on a timely basis when needed (including the maximum offering amount hereunder) could have a material adverse effect on our business, prospects, financial condition and results of operations.
If we raise additional funds through the issuance of additional debt securities, then such securities may have rights, preferences or privileges senior to those of the securities offered hereby, and holders of the securities offered hereby may experience dilution. If we raise additional funds through the issuance of debt, we will be required to service that debt and will likely become subject to restrictive covenants and other restrictions contained in the instruments governing that debt, which may limit our operational flexibility.
Offerings under Section 4(a)(6) of Securities Act of 1933, as amended (the “Securities Act”), are exempt from state and federal registration requirements. Therefore, there is less disclosure of, or publicly available, information contained in this document than would typically be provided in a registered offering. While we have attempted to summarize the risks to the best of our ability, there may in fact be risks associated with participating in this offering, and Company-specific risks that have not been contemplated in this document.
Investments in private companies, particularly early stage companies such as us, involve a high degree of risk. Early stage companies are usually comparatively more vulnerable to developments such as rapid changes in technology, fluctuations of demand and prices and to marketing competition from larger, more well established competitors. Therefore, we cannot assure that we will ever achieve or maintain profitability from our operations.
The market values of investments in private companies (especially early stage companies such as us) are difficult to determine. They generally are subject to negotiations between company management and prospective investors, and may result in values that are highly arbitrary. Furthermore, a private investment made in our company will be illiquid and likely will be long term in nature and may require years from the date of initial investment before disposition, if ever. The value of your investment may be lost or substantially devalued at liquidity.
Neither the Convertible Promissory Notes to be issued in this offering (the “Notes”) nor the securities issuable upon their conversion will be registered under the Securities Act, or the securities laws of any state or other jurisdiction, and will not be subject to resale unless they are subsequently registered under the Securities Act and other applicable securities laws or an exemption from registration is available. Thus, there will no public market for the Notes or the securities issuable upon conversion of the Notes, and no public market is expected to develop.
Given the early stage of our company and the rapidly evolving nature of the markets in which we compete, we may experience significant fluctuations in our future operating results due to a variety of factors, many of which are outside our control. Factors that may adversely affect our future operating results include, without limitation, unforeseen development costs, variable operating costs, general economic conditions and market conditions, and the development or introduction of new technological innovations, products or services by our competitors. If we are unable to address the above factors, our operating results may fall below the expectations of management, which could adversely affect our business.
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