Nickelytics could be one of the best under the radar type startups to become a unicorn in the next several years. Nickelytics is a startup founded by Judah Longgrear with the intention of disrupting the out of home advertising by using technology to get greater tracking of advertisement campaign results. Originally starting out as the nickel ride with intention of providing free rides with advertisements, Judah pivoted into branding advertisements and charging for that. This can occur on rideshare vehicles, gig economy vehicles, and delivery robots. Reported analytics for prospective advertisers can include total impressions, viewer demographics, website visits, store visits, app downloads, and other conversion metrics. They have a website with more information that can be found at https://www.nickelytics.com/

They have raised money via equity crowdfunding available to non-accredited investors (the average joe) twice on republic.com. Once closing on May 1, 2021 for $390,118 USD, and then closing a 2^nd round on November 14, 2022 for $116,165 USD. Those raises and more information published by the company including overview, deal terms, form c, and crowd safe agreements can be found:

https://republic.com/nickelytics-2021

https://republic.com/nickelytics

I ended up participating in both rounds due to the potential that I see, of which I will be covering the multiple reasons why.

Founder

The evaluation of the founder is the most important quality, and the founder seems to be taking calculated risks with a clear vision in mind, shows self-awareness and humility in willingness to change directions and comfortably admit to mistakes. Having a combination of persistent confidence and humble self-awareness is unusual. The founder seems like he’s going to be a winner. By buying the university coffee shop that happened to be available for sale while in school and running it at a profit through that time as a student shows a natural inclination towards entrepreneurship with successful results. He was able to identify an opportunity, seize it, and run it successfully. Employment in salesforce and being able to be placed in good roles also shows grassroots work ethic. From what’s publicly available, Judah certainly interviews well. Furthermore, early lead investor Techstars named Judah a mentor for other startups as part of its seed accelerator program. Clearly, there are successful people in the business that recognize his skill. On both raises, republic has a discussion board where prospective and previous investors can ask questions that are responded to by the company. I asked several questions during both raises while they were live, to which Judah personally responded promptly, concisely, directly, and informatively. He also did so for questions from others, and did not dodge any questions or deflect. This shows preparedness, candidness, and a no-nonsense business attitude.

Previous investors

Having reputable investors on board including Techstars, the main seed accelerator, Aria Emiko, and BDev Ventures. For Techstars to be the lead investor as part of the seed accelerator from meeting a twenty something Judah in Europe, they would not put their money and energy here unless they believed in him and the vision of the product.

Revenue growth

Proof of explosive revenue growth as follows:

2020: $114,400 USD

2021: $427,200 USD, raising at a $6.5m USD valuation. 273% revenue growth vs 2020

2022: $841,900 USD, raising at a $10m USD valuation. 97% revenue growth vs 2021

As a startup, they were not profitable during these years. Measuring valuation against solely revenue, this is not unreasonable, paying ~15 times sales in 2021, and ~12 times sales in 2022. If Nickelytics decides to go the equity crowdfunding route again, in a period of tightening cash with rising interest rates, one might expect to may between 10-15 times sales. With a burn rate of approximately $18k per month, and although profitability is anticipated sometime in 2025, another raise round could present itself in 2024 or 2025, as a bridge or Series A round to cover cash obligations or to expand operations quicker.

Customer retention rate has been at 70-80%, so I expect revenue to continue accelerating. Nickelytics has had many brands advertise in the US market, including names such as: SocialSEO, strata, Suzohapp, Virginia museum of history and culture, Los Angeles Times, Western Governors University, Nationwide, Remax, Smokey, ad council, Beverly & co, Caesars Sportsbook, Compass, Greystar, Hillsborough County of Florida, WesBanco, 121 Financial credit union, Ponce Law, AmTrust, and more.

Income during recessionary times

Airbnb and Uber thrived during the previous recession when users wanted extra supplementary income to support themselves. In this period of high inflation, muted growth and potential recession, supply of willingness to advertise may actually increase, with individual users preferring income over aesthetics. Nickelytics has wrapped more than 15,000 cars from gig economy drivers. They also wrap autonomous robots that are on the road as well. The expansion into scooters, EV charging stations, robotics, and perhaps more, could also actually increase the total obtainable market. If the product technology can contain to lead to positive results for the advertisers on the demand side, then this will have the possibilities of being an untapped unicorn.

Best of its class

Nickelytics according to Tracxn, has 44 competitors, and ranks 2^nd among them. If true, not often do you get to invest in the 2^nd best company in any industry at effectively the seed round, given a Series A round has not yet occurred. The founder was also named a Forbes NEXT 1000 entrepreneur.

Promising unit economics

CPM is only $2.10 per advertiser campaign for OOH (out-of-home) advertising; this is rivalling the levels of Facebook and Google, and in an unsaturated blue ocean market where the industry has stayed stagnant for a long time now. Hence the high 70-80% customer retention rate and 75% gross margin.

If the numbers can indeed hold up for the long-term, the CLV/CAC ratio is a stunning ~17 with CLV, customer lifetime value estimated at $125,000 and CAC, customer acquisition cost at just $7,400, which is spectacular. That’s a combination of high CLV and low CAC; transparent and hard to find. The $125,000 is viable given Nickelytics is targeting the B2B industry, and could land advertisement campaigns with larger companies. This leaves a lot of buffers even if costs go up to acquire more customers, as the lifetime value will likely remain high provided there is a positive EV on advertising spend. Potential positive network effect. This may not be a popular investment due to the perceived small total addressable market of $40 billion, which could increase to further untapped opportunities. Case in point the electric vehicle charging stations in advertising. Profitability in 2025 would be good for a technology company if this is indeed achieved, as there is some risk in the cash burn. But this seems like a big winner years down the line as it’s uncovering an archaic industry and an untapped need.

Disclaimer

This is not Financial Advice. This article is meant only for educational and perhaps entertainment purposes.

Disclosure

I/we have a beneficial long position in the shares of Nickelytics either through SAFEs, stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it from Nickelytics. I have no business relationship with any company who is mentioned in this article.