January's Startup Scene: Higher Investments Amidst Fewer Launches

CHART OF THE WEEK 📈

Here are some key takeaways from private investing last month:

• More money was invested across debt and equity in January than in December. If investing more in startups is part of your 2024 resolutions, it is definitely the right move!

• The number of new deals launched this month is declining. This decline is expected given that companies filing now without updated 2023 financials will have to update their financials by April 2023.

• Therefore, many startups wait until their 2023 financials are up to date before launching a new round.

• The healthcare and pharmaceutical industry was the industry where investors backed the most Reg CF deals in January. A very successful deal, PSYONIC on StartEngine, just closed this month and raised $626,000 in the last 31 days of its raise.

Together with HMX Invest

Have you ever wanted to invest in high-end restaurants with the best restaurateurs? Now is your chance. HMX Invest offers opportunities to invest in some of the standout restaurants in the industry. Right now, you can invest in deals, including one of the hottest restaurant groups, José Andrés Group. Renowned for over 30 restaurants, including a two-Michelin-starred experience in DC and a vibrant Manhattan venue, the group now offers investment in two Chicago gems, Bazaar Meat and Bar Mar, starting at $500.

Explore exclusive deals like this today at HMX Invest and be part of this gourmet revolution!

PITCH REVIEW 💸

Brief: CurlMix specializes in haircare products for curly hair, aiming to help customers master their curls in just 21 days. With over 260,000 customers and $32 million in sales, its products, including shampoos and conditioners, are popular in the curly hair community and available in 460 Ulta Beauty stores. It’s raising $5M with a pre-money valuation of $38.4M and a minimum investment of $250.

Key People: CurlMix was co-founded by CEO Kimberly Lewis and CTO Tim Lewis. The husband-and-wife team has spent around ten years in the industry at the company and with The Natural Hair Academy Inc., a social network for the natural hair community that they founded in 2013. Both have degrees from the University of Illinois at Urbana-Champaign.

Interested in CurlMix? Access the deal report HERE 🔓📈

Summary

Here's what we like: CurlMix has established itself as a strong player in the US natural hair care products market. With over 260,000 customers and $32 million in lifetime sales, CurlMix has demonstrated its ability to attract and retain a loyal customer base. The company's products have gained traction and are now available in 460 Ulta Beauty stores. With annual revenue reaching $10 million in 2022 and a remarkable growth rate of 117.48%, CurlMix has proven its ability to generate substantial sales in a competitive industry.

Furthermore, the company's valuation of $38.4 million presents a great deal for investors in this round. In terms of funding, CurlMix has received commitments from Backstage Capital's Arlan Hamilton and venture capital firm Cleveland Ave, further validating its business model and growth trajectory.

CurlMix's strong revenue growth, loyal customer base, strategic partnerships, and experienced investor backing position the company for continued success in the beauty and personal care industry.

Here's what we don't: While CurlMix has shown impressive revenue growth and has a loyal customer base, it operates in the competitive beauty and personal care industry. Competitors such as Curlsmith, Shea Moisture, DevaCurl, and Mielle have established products and brand recognition in the market.

The industry entry barriers are relatively low, allowing new entrants to introduce their own haircare products easily. This poses a risk to CurlMix's market share and growth potential.

Furthermore, CurlMix reported a net loss of $4,569,819 in its most recent fiscal year, indicating potential challenges in achieving profitability in the near future. According to the offering circular, the team intends to reach profitability in 18 months.

While CurlMix has achieved notable milestones and generated substantial revenue, investors should be cautious of the competitive landscape, the company's burn rate, and the challenges of achieving profitability in the highly competitive beauty and personal care industry.

ON THE POD 🎙️

In this episode of Inside Startup Investing, Chris catches up with Crowdcube Co-CEO Matt Cooper. Celebrating over a decade of innovation, Crowdcube is a pioneer in online capital raising, transforming the startup investment landscape in the UK and globally. With over $2 billion raised for startups and more than $100 million returned to investors, their impact is undeniable. Chris and Matt dig into the challenges and triumphs of building the platform in the UK, the evolution of investor engagement, and the future of digital private markets.

Listen to the full episode here

STAFF PICKS 🌶️

FuelGems

FuelGems is revolutionizing the global transportation sector with its advanced fuel additive, enhancing fuel efficiency and reducing environmental impact. Their nanotechnology-based additive, effective in tiny quantities, offers a substantial return on investment and cuts greenhouse gas emissions by up to 50%.

• Valuation Cap: $17.5 million

• Minimum Investment: $100

Texas Inn (Debt)

Texas Inn, a classic diner with three Virginia locations, is crowdfunding on Honeycomb. Renowned for its original chili and the iconic Cheesy Western sandwich, the diner offers hot dogs, burgers, and an all-day breakfast. In 2022, it served nearly 300,000 customers and expanded its reach by shipping meal kits and bulk items to 48 states.

• Interest Rate: 11.5%

• Minimum Investment: $100

Monad.Social

Monad.Social is revolutionizing content creation with a membership-powered platform, addressing the needs of creators outside traditional categories like gaming or adult content. The platform offers virtual venues for digital live performances, leveraging AI, XR, and Web3 technologies. It provides a safe, intimate, and engaging space for creators and fans, with content behind a paywall. Revenue comes from subscriptions, tips, and NFT sales, with 80% returned to creators.

• Valuation Cap: $12 million

• Minimum Investment: $100