April has started strong and we are excited as we move ahead through the balance of the year.
This past week we have had two crowdfunding analysts publish articles on WhiteClouds:
--- Andy Gordon, Co-Founder with Adam Sharp of First Stage Investor and EarlyInvesting.com published an update in their April Newsletter titled: “Portfolio Update: WhiteClouds”. You can read it on their site and we have also included it here at the bottom:
https://earlyinvesting.com/fsi-issues/first-stage-investor-issue-no-33/
--- Chris Lustrino, founder of KingsCrowd, published an article about Whiteclouds titled: “Top Deal Reiterated: A Revolutionary Alternative to Product Modeling”. You can read it on Chris' website or below: https://kingscrowd.com/a/336/top-deal-reiterated-a-revolutionary-alternative-to-product-modeling
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I received this link from one of our investors (thank-you) and thought it would be worth a read from each of you. The article takes a look into the future of 3D Printing along with some predictions. Three takeaways from the article are by 2024:
--- 50 percent of all manufacturing companies will have 3D printing operations in production
--- 40 percent of all surgeons will practice with 3D models;
--- 50 percent of all consumer businesses will have revenue-bearing 3D printing operations.
Source: https://www.linkedin.com/pulse/3d-printing-5-anticipated-breakthroughs-watch-peter-diamandis/
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Our goal has been to get to profitability and self-sustainability as a company. We have completed some changes and effecting a few more that will help accomplish our goals and give us net savings of about $65,000 per month ($780,000 annually):
--- We are in the process of moving to another facility (almost next door) that will significantly reduce our rent and lower utilities.
--- Due to a situation with our COO, Joey has changed status to an as-needed-basis and is still a member of our Board of Directors. We hope to get him back full-time in the near future.
--- We have reorganized employee activities and reduced employee count to better match needs and responsibilities.
--- Our content creation along with SEO (Search Engine Optimization) has had great success and is allowing us to reduce our SEM (Search Engine Marketing) activities. Part of our fund-raising proceeds will be used to expand our content creation and SEO marketing activities.
--- Net Impact – savings of almost $65,000 per month
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We like showing off our 3D fabrication and have included some of our cool recent entries – See below:
We are really excited about the future. Join the other 1,000+ investors who have already become part of the WhiteClouds family. See more: https://wefunder.com/whiteclouds
Thanks for your support, Jerry Ropelato
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Portfolio Update: WhiteClouds
By Andy Gordon, Co-Founder, First Stage Investor
Source: https://earlyinvesting.com/fsi-issues/first-stage-investor-issue-no-33/
WhiteClouds is an on-demand industrial-scale 3D printing operation. It provides a cloud-based software platform with a full-color 3D printing facility to give companies a wide range of impressively detailed products whenever they want. Since we recommended WhiteClouds nearly two years ago, it’s made a major strategic shift in focus and now makes much bigger products than before. CEO Jerry Ropelato says there’s much less competition in this space.
How big are the products? The company recently printed an 11-foot statue for DreamWorks. WhiteClouds finished it in just a few days. “Our operations are getting faster and more efficient,” says Jerry. (Of all the products he mentioned, my favorite has to be the 6-foot-tall cupcake.)
WhiteClouds has also picked up some very big customers recently. Jerry told me I can’t mention names, but one is a major private-sector space company. WhiteClouds built a prototype thruster for its new rocket. Other companies include the world’s largest anatomical models supplier, two of the biggest healthcare 3D visualization developers in the U.S. and Europe (used by 6,300 healthcare providers), and two of the biggest trade show organizers in the world (each does roughly 15,000 shows a year).
Trade shows use precise 3D colored props to showcase their industries. The trade show companies (two of 20 trade show companies it works with) have been WhiteClouds’ biggest customers this year.
Its largest customer acquisition this fiscal year (so far) is Mars Petcare, a huge veterinary surgical company. It took a lot of work, Jerry says. “They’ve been ‘trying us out’ for the past 23, 24 months,” he said. “But it was worth it.” Mars has 1,870 surgical centers. And WhiteClouds has now been cleared to provide pre-surgery 3D models of the animal patients to all of them. These models minimize the time an animal is under anesthesia. The same benefits can be applied to human surgeries. Jerry told me that the experience and reputation WhiteClouds will gain in the vet space will pave the way for it to use its 3D printing technology for complex surgeries in humans. “It’s our next big step,” he says.
It’s shaping up to be a critical year for the company. WhiteClouds is once again raising on Wefunder in order to expand its sales and marketing efforts. Jerry anticipates revenues will jump to $6 million this year, from $3.5 million in 2018. While he says the bulk of the sales will come in the latter half of the year, the company began its raise on Wefunder with 70 Fortune 1000 customers. The following month, it acquired 10 more. When I asked Jerry what preparations he’s making to ensure the company can handle a spike in business, he said they plan to rely on third-party 3D printing farms. And he assured me expansion will be achieved without a jump in capital expenditures.
WhiteClouds is raising at a valuation of $22 million, a 22% increase over the $18 million valuation it had when we recommended it. If all goes according to plan, Jerry says, it’s very possible the company will be doing a Series A round toward the end of the year.
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Top Deal Reiterated: A Revolutionary Alternative to Product Modeling
By Chris Lustrino, KingsCrowd
Source: https://kingscrowd.com/a/336/top-deal-reiterated-a-revolutionary-alternative-to-product-modeling
Key Deal Stats
Raising Platform: WeFunder
Valuation Cap: $22MM
Security Type: SAFE
Minimum Investment: $1,000
Raise Completion Date: April 26th, 2019
At the time of publication, March 14th, WhiteClouds has raised $102,373
In September of 2018, WhiteClouds was rated a Top Deal by KingsCrowd. As a reminder, WhiteClouds is a 3D printing as a service solution that enables organizations to easily order both prototype products as well as consumer products with no in-house design or 3D printing expertise. With rapid delivery on high-end customized color parts both big and small, the team has found an ability to service multiple verticals with beautiful end-products. At the time we rated the company a Top Deal because of its strong market traction, long term defensible moat in a growing industry, and proven management team including CEO Jerry Ropelato, who built a $100M business prior. With the team back for another raise, we are analyzing the business to determine if it warrants continued investment.
Business Model Refresher
As a reminder, WhiteClouds provides 3D printing as a service in its 60,000 square foot printing facility. Their 3D printers can print in full color with extreme precision, capable of printing details as small as 16 microns, or ⅙ the size of a human hair. With over 70 production printers, WhiteClouds is capable of producing a large variety of prints in many different sizes, enabling them to help any company with their needs. They produce their 3D prints on demand, and often times the company can complete orders within a day, producing thousands of individually customized products every month. The global 3D printing market is estimated to be a $30B+ global market opportunity by 2023, up from $7.9B in 2016 driven by an improvement in the end products produced by 3D printers to be utilized in more consumer interfacing applications.
Business Updates
Healthy Top Line Growth: When we last rated the company in 2018, White Clouds had stated 2017 revenues of $2.29M. With 2018 closed out the team reported ~$3.5M in fiscal year revenues, a 53% CAGR in top line growth, after having discontinued less profitable lines of business in 2017. With strong growth from a portfolio of customers that includes the likes of Google, IBM, Amgen, Harley Davidson and more, it is apparent that White Clouds is building a strong book of business driven by its position in the market as a large and versatile 3D print provider.
Improving Underlying Business Fundamentals: Having discontinued less profitable lines of business in 2017 led to a gross margin of 66% in 2018 versus 53% in 2017 and the team expects to elevate that to 69% during 2019. Part of the improvement in bottom line cost comes from the $496 customer acquisition cost in relation to $21,578 in customer lifetime value with a 98% retention rate. Many of the efforts put in place by the team around SEO (search engine optimization), which you may remember is a core competency of this team, are taking hold. Normalizing the company’s financials for past acquisitions and capital investments reveals a company with a strong, and thus far successful, plan for growth on a trajectory heading toward profitability in the next few years.
Large Entity Customer Acquisition: WhiteClouds continues to gain a foothold with large corporate customers. Across its portfolio of customers, it has built a strong presence in healthcare, event-planning, and consumer retail companies. Currently, the company has 70+ Fortune 1000 companies, 38 of which were acquired in 2018 alone. These Fortune 1000 companies include very diverse brands like American Express, NASA, Amazon, Disney, and Google. WhiteClouds’ acquisition of Fortune 1000 customers indicates their ability to serve large clients with trusted quality products. As that list continues to grow the network effects of being known as the trusted provider of 3D printed products will help separate WhiteClouds from other potential competitors.
The Rating: Top Deal Reiterated
WhiteClouds continues to show signs of being a Top Deal. When we last rated the company in 2017, the team was raising at a $20M valuation cap. Today, that stands at $22M on meaningfully improved revenues and gross margins. This experienced management team continues to execute and build a healthy business that has a growing list of Fortune 1000 companies that are proving to be high repeat business customers. As we stated in our prior rating, if the team continues to build the business in the way it has shown to date, acquisition opportunities in the $150M to $175M range could be within reach in the next 3 to 5 years with 3D printing companies typically transacting in the 2 to 2.4X revenue multiple range. The company’s customer acquisition cost to customer lifetime value clearly shows that marketing investments are likely to provide a high return on investment, and the company has also indicated that they plan on spending the majority of funds raised on sales and marketing. An investment in WhiteClouds is effectively a stake in this new marketing push, and the margin between customer acquisition cost and customer lifetime value, as well as the potential growth in their various market segments. With the company’s current growth trajectory and their high-value product offering, WhiteClouds is a uniquely promising investment. If interested, be sure to invest HERE.