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Good morning and happy Tuesday! Welcome to all those joining us for the first time this week. If you're reading this and aren’t subscribed yet, you can join the crowd of investors receiving this weekly below. 

This week I have a shorter look into one of StartEngine's most popular offerings. Graze is a pre-revenue startup that has received notable attention from investors due to its innovative technology and $30 million in *non-binding* preorders. Powered by sustainable energy, Graze is aiming to introduce the most drastic innovation that commercial landscaping has seen since the first rider lawnmower was created decades ago. If successful, the opportunity could be massive.

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Deep dive - Graze

When was the last time you heard about “the next big thing in lawn mowing”? I’d be lying if I said I’d ever heard of a company touting their abilities to disrupt the commercial landscape industry. It would be like hearing a company say they had a breakthrough in the waste management business, and I’m almost certain you’ve never heard a company claim that.
  • Commercial landscaping is an unsexy, stable industry that has seen a shockingly small amount of innovation. As put by CEO, John Vlay, this is exactly why the industry presents a massive opportunity.
The lack of attention directed toward advancing the commercial landscaping industry has effectively resulted in two primary pain points for even the best landscapers.
  • First, the landscaping industry is a commoditized business. Its dependence on manual labor has resulted in razor-thin margins, labor shortages, pricing pressure, etc. Within commercial landscaping, lawn mowing is a loss leader.
  • Second, commercial landscaping accounts for 5% of all greenhouse gasses emitted within the United States. According to the EPA, lawnmowers account for nearly 50% of all emissions attributable to lawn and garden equipment.
Eliminating both of these problems, Graze is working toward disrupting the $100 billion commercial landscaping industry. Its electric, fully autonomous lawnmower uses computer vision to remove landscaping’s most expensive component – the driver. Mowing yields 0-10% profit margins, and at 45% of gross revenue, labor is to blame.
  • Using machine learning, navigation technology, and safety sensors, Graze’s software allows its lawnmowers to map job sites, plan and execute mowing plans, avoid obstacles, and collect data to further optimize for precision and efficiency.
Addressing more than just high labor costs, employee shortages, and rising wages, the lawnmower also offers a safe and sustainable solution – something our world desperately needs right now. Powered by electricity, Graze estimates its more sustainable mower eliminates 75% of fuel costs.
  • Few realize just how environmentally harmful lawn mowers are. In reality, they’re even worse for the environment than a standard gas-powered car. The damage caused by operating a four-stroke, four-horsepower mower for an hour would be equivalent to driving a car 93 miles.
Graze claims its mower will allow a two-person team to do the work of what would have otherwise required a four-to-five-person team. By eliminating >50% of labor costs and 75% of fuel costs, Graze estimates that customers will be able to expand profit margins from 10% to 40%.
  • To map out exactly how Graze helps its customers save money, the Graze team put together the following estimates for one of its customers.
Improving on the lackluster autonomous mowers currently available
Numerous companies have created their own version of an autonomous lawnmower, but none have done it like Graze. Those that have been created are primarily semi-autonomous machines meant for personal use. You can think of them as you might a Roomba vacuum.
  • At nine inches in width, these mowers are only a fraction of the size of a standard lawnmower. They’re built for small, enclosed plots of land, not commercial landscaping.
More recently some competitors have set their sights on the larger commercial landscaping industry. Still, these solutions fall short of what Graze has created.
  • Left Hand Robotics, which was acquired by Toro in March 2021, offers a gas-powered autonomous lawnmower. Though it offers a practical solution for commercial jobs, it’s notably less sustainable than what has been created by Graze.
  • Greenzie is a software company that adds its aftermarket technology to a variety of lawnmowers. As such, it’s reliant on partnerships with existing mower manufacturers. According to the Graze team, however, only one partner is attempting to commercialize the Greenzie product.
Leading a league of its own, Graze’s 60” flagship lawnmower is optimally designed to handle commercial job sites. Graze designed its mower to serve landscaping companies managing parks, city infrastructure, golf courses, stadiums, etc.
  • Dependent on the varied terrain and length of grass being cut, the Graze team expects a full charge to power the mower for roughly 8 hours, which would cover approximately 20-30 acres of land.
The mower is just the beginning. Graze is focused on building a comprehensive suite of landscaping solutions. The team expects future fleets of Graze-enabled technology to take shape in various pieces of commonly used landscaping equipment.

Business highlights
With expected delivery in 2022, Graze has secured a non-binding pre-order from Mainscape, the 14th largest U.S. commercial landscaping company, that totals 200 mowers. Announced in June 2021, Graze has also recently secured a commercial agreement with Skyline Landscape Services, an Australian landscaping company. This partnership represents an order for 50 mowers.
  • Graze has additionally received orders from Sundale Country Club and Miranda’s Landscape. These two partnerships represent orders of 10 mowers and 5 mowers, respectively.
Graze estimates the early interest it has received to be worth $23.85 million over a 7-year period. 66% of this is expected in the form of a recurring software fee.
  • Each mower costs $30,000. Additionally, users are required to pay a $1,000 monthly fee. Over the course of its expected 5-year lifespan, Graze expects each mower to yield $90,000 in total revenue.
The team intends to spend the remainder of 2021 focused on working with pilot customers and refining the product to better fit their needs. Beginning in 2022, Graze will shift its efforts from development to sales.
  • In order to meet delivery expectations in 2022, Graze is closely working with manufacturing partners now to ensure its supply chain will be in order.

Fundraising details
Closing on June 30, 2021, Graze is offering individuals the opportunity to invest at a $23 million valuation. Investors can purchase shares of preferred stock for $5.80, and the minimum investment required is $498. Since opening this round of crowdfunding on February 4, 2021, Graze has raised nearly $3 million from over 2,000 investors. Over the course of its life, Graze has raised over $6.5 million from over 4,000 investors via crowdfunding offerings.
  • In addition to its support received from retail investors, Graze is also backed by Wavemaker Partners and its automation-focused venture studio, Wavemaker Labs. Wavemaker Partners is a global venture capital firm with more than $500 million invested.
You can check out the full Graze pitch on StartEngine here.
Want me to take a deep dive look into a particular offering, ask any questions, or just reach out and introduce yourself? Shoot me an email at drew@thecrwd.com. Otherwise, I'll see you next week.
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