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FenSens

Smart IoT technology for any vehicle

87%

Investors

54

Time to Invest

Security Offered

Convertible Note

Minimum Investment: $100

  • 2019 Finalist for Engadget’s Best of CES awardsi

  • Revenue grew by 32.3% in 2018, reaching $744,700

  • Profitable in 2018, generating $97,700 in net income

  • Agreements with Wal-Mart, Best Buy Canada, Fry’s Electronics, and a large automotive accessories distributor

Terms

Investment Terms

Security Type: Crowd Note

Round Size: Min: $25,000 Max: $107,000

Valuation Cap: $7 million

Discount: 20%

Conversion Provisions: In connection with an equity financing of at least $1,000,000, the Company has the option to convert the Crowd Note into shares of a series of non-voting preferred stock, at the price per share of the new preferred stock sold in the equity financing, or a valuation cap of $7,000,000, whichever results in a lower conversion price. Please refer to the Crowd Note for a complete description of the terms of the Crowd Note, including the conversion provisions.

Perks

*You are investing in Crowd Notes in this Offering. Perks are meant to be a thank you from the company for investing. The perks below are inclusive of lower dollar amount perks.

$500 – FenSens Smart Wireless Parking Sensor

$1000 – FenSens Smart Wireless Backup Camera, plus lower level perk

$5000 - Hang out with the FenSens team at CES 2020 with access to exclusive startup events, and VIP receptions, plus lower level perks

Overview

Opportunity

In 2008, the U.S. Congress passed a law mandating regulators adopt rules for car manufacturers to install rearview visibility technology. In 2014, the U.S Department of Transportation drafted those regulations, which went into effect in May 2018. Under this new regulation, all new vehicles sold in the U.S. are required to have built-in backup cameras.ii However, many older car models do not have backup assistance technology. According to the Insurance Institute for Highway Safety, only 8% of cars had rearview cameras in 2006.iii Further, there are more older cars on U.S. roads than ever before; In 2017, cars that were 10 or more years old outnumbered those that were newer.iv The average age of a vehicle on the road in 2018 was over 11 years.v

Founded in 2015, FenSens was created to bring new car technologies to all vehicles, regardless of age. Its technology emphasizes user experience, advanced data collection services, and plug & play installation. The company’s vision is to develop a connected vehicle platform that enables customers to manage end-to-end automotive technology through one mobile app. Its first product, the FenSens Wireless Parking Sensor, enables users to detect objects in front or behind their car. As objects are detected, the information is relayed back to the user’s smartphone via Bluetooth technology to alert the driver.

FenSens is also currently in development of several new products it is hoping to release over the next few years. The first, a wireless backup camera, would enable users to stream live video to the FenSens app on their smartphone from a camera embedded in their license plate frame. The company is also currently developing a theft-prevention device, which would enable users to track lost or stolen vehicles on their phones with the addition of 24/7 roadside assistance for an added monthly fee. FenSens currently has a patent on its existing technology and several patent applications for products in development, all under the founder’s name.

Press

Product

Smart Wireless Parking Sensor

 

Smart Wireless Backup Camera

 

TAP QuickLaunch Button

 

Smart Wireless Parking Sensor

The FenSens Smart Wireless Parking Sensor is a license plate-based parking sensor. The ultrasonic sensors are incorporated into a license plate frame that can easily be screwed on to a vehicle. The sensors can detect objects up to approximately 10 feet away and relay the proximity of the object back to the driver’s smartphone. A free-to-download app is required on a driver’s smartphone to receive Bluetooth signals from the sensors. The app provides audio, visual, and vibration alerts as objects are detected. The closer the sensors get to the object, the more active these alerts become. Multiple phones can be configured to connect to the sensor via the app. The Parking Sensor is designed to safely guide drivers until they are less than a foot away from an object. Sensors are waterproof, run on AA batteries, and generally last five months before battery replacement. The company’s founder has filed for a patent for the device.

FenSens Parking Sensors are designed to be easily installed with only a screwdriver and four custom screws. To help prevent theft, owners are provided with a unique screwdriver that is designed specifically for the custom license plate screws.

In addition to its U.S./Canada Wireless Parking Sensor frame, FenSens has also released a European Union and truck variant to fit the differing license plate sizes.

TAP QuickLaunch Button

All Parking Sensors come with a TAP QuickLaunch Button. The TAP QuickLaunch Button enables users to launch their wireless sensor app on their smartphones at the touch of a button. For Android devices, touching the button will immediately bring a user to the app display screen. For iOS users, tapping the button will send a push notification that will direct a user to the app display screen. Alternatively, iOS users can launch the app using Siri. The QuickLaunch Button has also been designed to work with two Wireless Parking Sensors at a time, enabling drivers to put sensors on both the front and rear end of their vehicle. The company’s founder has been granted a U.S. patentvi for the device design.

While the QuickLaunch Button is currently only compatible with the Smart Wireless Parking Sensor App, FenSens plans to further develop the Button to launch more applications on a user’s smartphone without having to touch their phone. Eventually, FenSens aims to enable users to program the device to launch any app on their smartphone and launch voice command services such as Siri or Alexa by holding down the button for a longer period.

FenSens also currently licenses out its QuickLaunch Button technology to one of its distributors. As part of the agreement, FenSens receives 5% of the total cost of goods sold.

Smart Wireless Backup Camera

The Smart Wireless Backup Camera will be an aftermarket add-on for cars, boats, and RVs. The camera is being designed to livestream video to a user’s phone via an Android or iOS app. The company plans to make it attachable to the front or rear end of a vehicle by either sticking it on, mounting it with a magnet, or screwing it in with anti-theft screws. The camera will communicate with a smartphone app via WiFi technology. FenSens is anticipating this device will begin shipping in April 2019.

Use of Proceeds and Product Roadmap

FenSens anticipates using a majority of the funds from this raise to increase marketing efforts, develop new product offerings, and for general working capital. Most of the remaining funds are expected to be used for IP development on wireless products currently in development at FenSens. The company has discretion to alter the use of proceeds based upon a change in the business climate that may require the company to invest more into marketing or research and development to help drive future revenue and value for investors.

FenSens is currently developing a smart anti-theft device and car finder. The device is being designed to track lost or stolen vehicles via a users’ phone and enable a user to receive 24/7 emergency support and roadside assistance. The company expects that the device will retail for $90 with an additional monthly fee of around $9.99 to receive the 24/7 emergency support. FenSens is aiming to release this product in May 2019. A patent application has been filed for this device.

Another product FenSens is planning to develop is a projection display for autonomous vehicles (AVs). The system would come in the form of a virtual bumper sticker that could be used to display advertisements or low power messages transmitted via Bluetooth from a driver’s phone. The system would allow for geo-located advertising and a heat map showing impressions as the autonomous vehicle goes around the city.

FenSens currently operates in North America, Europe and South America. In the coming years it plans to expand its product offerings into both India and China. FenSens is also seeking to develop partnerships with insurance companies. Through such a partnership, insurance companies may be able to incentivize drivers to use FenSens products by offering them better rates for safe driving associated with rear view sensors and cameras.

Business Model

FenSens’ products are sold individually through its website, retailers such as Best Buy, Fry’s Electronics, and Walmart, and through online stores including Amazon and eTailz. Both versions of its Smart Wireless Parking Sensor (Standard and European) cost $149.99. Both versions of the parking sensors come with the TAP QuickLaunch Button, however, it can also be purchased separately for $14.99.

FenSens anticipates selling the Smart Wireless Backup Camera for around $149.99. The company is also currently developing an anti-theft device to track lost or stolen vehicles that will retail for around $90, with the possibility of adding a $9.99 per month software-as-a-service component for roadside assistance.  

User Traction

FenSens currently has agreements with several distributors, brick and mortar stores, and online retailers. FenSens is able to reach consumers in North America and Europe via its agreements with distributors, retailers, and product sales through Amazon. The company also previously sold limited amounts of its Smart Wireless Parking Sensor to a customer in South America.

 In July 2018, the company signed a distribution agreement with WinPlus. WinPlus markets, distributes, and manufactures lifestyle automotive products and has retail relationships with large brick and mortar chains such as Target, Wal-Mart, Advance Auto Parts, AutoZone, Costco, and Sam’s Club.vii The company also signed a distribution agreement with SPA, Inc. in July 2018, giving them access to sell their products at Fry’s Electronics retail locations.

In addition to distribution agreements, FenSens also has several direct selling agreements with retailers such as Wal-Mart, Best Buy Canada, Modern Look, eTailz, and Lydia.

The company also conducted a crowdfunding campaign in 2016 through Indiegogo, raising $262,820 from 1,355 backers.viii The company continues to sell its Wireless Parking Sensor through the Indiegogo marketplace.

Historical Financials

In 2018, FenSens generated $744,700 in revenue, up 32.3% from 2017. Annual revenue in 2017 was $354,000. Spikes in revenue in July 2017 and November 2018 were due to large online orders sold over various periods which were accounted for in the month in which they were shipped.

In 2018, the company’s expenses totaled $647,000, up 13.9% from 2017. Costs of goods sold (COGS) was the largest expense item (44.7% of total expenses), followed by software and website services (11.5%), wages and payroll (9.9%), and advertising expenses (9.4%). In 2017, total expenses were $568,100, led by COGS (46.9%), research and development expenses (24.6%), wages and payroll (8.6%), and travel expenses (7.4%).

In 2018, FenSens generated a net profit of $97,700, up from a net loss of $5,250 in 2017. Net income increased partially in 2018 due to an improvement in gross margin, from 53% in 2017 to 61% in 2018.

Industry

Industry and Market Analysis

According to data from the U.S. Department of Transportation, Federal Highway Administration, and National Household Travel Survey, the average age of vehicles on the road in the U.S. has been increasing. In 2018, the average age of a vehicle on the road was over 11 years.ix However, as cars get older, the less reliable and safe they become.x While today’s new cars are improving on several different fronts, such as safety technology, not all older vehicles have these features.xi One example is rearview camera technology, with 97% of 2018 car models having rearview camera technology, but only 8% of 2006 car models having the feature.xii In 2016 (the most recent year with government data available), there were over six million car accidents, up 15.6% from 2015.xiii An estimated 30% of those accidents were caused by vehicles in reverse.xiv According to the National Safety Council, the estimated cost of motor-vehicle deaths, injuries, and property damage in 2017 was $413.8 billion.xv

The automotive aftermarket industry was worth $287 billion in 2017 and is projected to have an annual growth rate of 3.6% through 2020.xvi One subsegment of the aftermarket automotive industry is automotive cameras, which is projected to reach a market size of around $11.2 billion by 2020, with a compound annual growth rate of 21.3%.xvii 

According the to the FBI (Federal Bureau of Investigation), there were an estimated 773,139 vehicle thefts in 2017, up 0.8% compared to 2016. Around $6 billion was lost nationwide due to motor vehicle thefts, with an average loss of $7,708 per vehicle.xviii Often, the most stolen vehicles are older cars that lack the newest technologies.xix

Competitors

Garmin (NASDAQ: GRMN)

Founded in 1989, Garmin develops GPS navigation and wearable technology for the automotive, aviation, marine, outdoor, and fitness markets. It currently has more than 12,000 employees in 60 offices around the world.xx Garmin offers a wireless backup camera that captures video of what’s behind a vehicle when in reverse and can transmit the footage up to 45 feet. The video is transmitted to a Garmin navigation display (sold separately) that can be switched between backup camera and GPS mode. The camera can be wired to a vehicle’s reverse lights to automatically display camera footage every time the vehicle is shifted into reverse. Garmin recommends taking the wireless device to a dealer to be installed but it can be self-installed as well.xxi The camera currently costs $169.99 on the Garmin website.xxii​​​​

Nonda

Founded in 2014, Nonda develops smart car solutions including car chargers, tire safety monitors, vehicle health monitors, wireless backup cameras, car key finders, universal car audio adapters, and a smart dash cam. Nonda’s smart wireless backup camera attaches to a car’s license plate and provides a 170-degree view of the rear of a vehicle. The camera has two megapixels, 720p definition, and six-layer glass lens. The camera relays the video feed to a user’s smartphone that is linked to the camera via a Bluetooth connection. The device is powered by a rechargeable battery that will last for around two months. The wireless backup camera currently costs $119.99 on Nonda’s website.xxiii Nonda has raised money through several Indiegogo crowdfunding campaigns, raising over $1.6 million in total.xxiv​​​​

Rear View Safety

Founded in 2007, Rear View Safety is a provider of auto safety and rear-view camera technology. The company develops products for school buses, boats, transit buses, commercial trucks, home, RV, emergency, and industrial use cases. Rear View Safety has a particular focus on providing products to fleets of vehicles. The company offers backup cameras, mobile DVRs, 360° camera systems, backup sensors, driver fatigue systems, and dash cameras. Its backup camera products range from around $149.99 to $999.99 and come in wired and wireless solutions that are connected to dashboard display screens or display screens on rear view mirrors. Its backup sensors are either wired or wireless and offer sensor options for all sides of a vehicle. Its backup sensors range from $199.99 to $699.99. Rear view Safety was acquired in 2016 by Safe Fleet for an undisclosed amount.xxv​​​​

Trail Ridge Technologies LLC

Founded in 2008, Trail Ridge Technologies is a producer of consumer electronic products. One of its products, QuickVu Backup Camera, is a wireless rear-view camera that attaches to license plates on vehicles. The camera is waterproof and transmits a video signal to a display screen in the car via Bluetooth. It operates with a light sensitive imager and LED assist to enable function in low light and no light conditions. The video feed is displayed through a monitor that can be attached to a vehicle dashboard and is powered through a 12-volt accessory socket plug-in. Monitors also display a parking guide that helps drivers judge distances behind them.xxvi Prices for the camera with display monitor range from $299.99 to $399.99.xxvii​​​​

VOXX International Corporation (NASDAQ: VOXX)

Founded in 1965, VOXX is a global manufacturer and supplier of consumer electronic products in the automotive, audio, and consumer accessory industries. The company has a portfolio of over 30 companies that include: Klipsch®, 808 Audio®, RCA®, Acoustic Research®, Audiovox®, Magnat®, Heco®, Schwaiger®, Oehlbach®, Invision®, Jensen®, Advent®, Code-Alarm®, and Look-It®. Under its Look-It® brand, VOXX sells a wireless backup camera. The wireless backup camera is a license plate frame with camera attached that screws onto the back of a vehicle. The camera feed is relayed back to a smartphone app where a user can see what’s behind the vehicle. The camera has an adjustable swivel that enables it to be adjusted up to 45 degrees. To launch the system, users need to tap a QuickView remote and the camera and corresponding phone app will be powered on. Users can also configure the device to automatically turn on when a car is put into reverse.xxviii The device currently costs $149.99 on the Look-It® website.xxix

 

Team

Andy Karuza

Founder, CEO, and President

Andy founded FenSens in 2015 and was appointed CEO and President of the company in 2016. As CEO and President, he is responsible for overall strategy, business partnerships, and product promotion. In addition to working at FenSens, Andy is also currently a principle at The Agency LLC, a business metrics and marketing strategy consulting firm. At The Agency LLC, he is responsible for working with large and small brands on exploring new areas of growth and competitiveness. Prior to joining FenSens, Andy served as the CEO of Brandbuddee, a place for brands and influencers to connect and collaborate. He holds a Bachelor of Arts in Marketing from Eastern Washington University.

Nik Talreja

Co-founder and Advisor

Nik co-founded FenSens in 2015 and served as COO from January 2017 to January 2019. He currently serves as an advisor and helps oversee company operations. In addition to working at FenSens, he is also currently serving as partner at Talis Partners LLP, a law and strategy firm for startups, and as Director of Finance and Operations at Spiral Therapeutics. Prior to his current roles, Nik worked as an associate at two law firms, Cooley LLP and Weil, Gotshal, and Manges LLP. He holds a J.D. from UCLA School of Law and a B.S. in Corporate Finance and Entrepreneurship from the Marshall School of Business at USC.

Andrew Klein

CFO

Andrew joined FenSens in 2018 as an advisor and was appointed as CFO in 2019. In addition to serving as CFO at FenSens, he also currently leads his own small business accounting firm, Zccounting.com. As CFO at FenSens, Andrew is responsible for overseeing company financial performance and generating financial statements. Prior to working for FenSens and founding Zccounting.com, he worked in Strategy and Development for Nomad Financial, was Executive Vice President at ZINO Society, and was the co-founder and CFO of BuildersCloud. Andrew holds a bachelor’s degree in Accounting and an MBA in Venture Finance from Seattle University. 

Alex Werff

CTO

Alex joined FenSens in March 2018 as an application developer and was promoted to Chief Technology Officer in January 2019. In addition to serving as CTO of FenSens, he also currently serves as the CTO of Phlint, software development consultancy. Alex has also worked as a developer for several other companies in the past including Fashion Cloud and Orgadata AG. He holds a bachelor’s degree in Computer Science from the University of Bremen.

Kyle Ellicott

Advisor

Kyle joined FenSens as an advisor in 2016. In addition to advising FenSens, he also co-founded and serves as Chief Labs Officer at ReadWrite Labs, an accelerator focused on the Internet of Things (IoT), Wearables, and other emerging technologies. Kyle is also is a founding member and keynote speaker at The Asia Matters Institute, a non-profit think tank focused on connecting the world with experts on growth and technology in Asia. He also serves as an advisor to several other companies in the wearables, IoT, and eSports industries. Kyle holds a degree in Computer Information Systems from Eastern Michigan University.

Alex Shirazi

Chief Product Officer

Alex joined FenSens as an Advisor in December 2017. In April 2018, he was appointed as Chief Product Officer where he oversees product development. In addition to working at FenSens, Alex also serves as the Managing Director at Phlint, a retail software consultancy firm. Prior to working at FenSens and Phlint, he served as an advisor for Tsukemen, Inc. and co-founded and served as CEO of Graph, Inc. Alex also has experience in user experience design and product design. He holds a degree from the University of Illinois at Urbana-Champaign.

Discussion

Endnotes

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