I knew the world had gone mad when I saw this CNBC headline:
“Live in this Silicon Valley man’s tent… for $900 a month.”
The backstory here is that a man set up a tent in his parents’ backyard and listed it on Airbnb. He recognized that demand for housing is driving prices through the roof, and he wanted to take advantage of it.
The thing is, I recently came across a startup that reached this same conclusion…
And the solution it came up with to solve this problem could put big profits in your pocket.
Housing Industry Is Stuck in Past
To set the stage here, consider this:
By using an assembly line, car factories like Ford or Tesla can build one car every minute.
This approach leads to a huge supply increase as well as lower costs.
But housing is stuck in the past. Houses are mainly still built by hand, foot by foot, inch by inch.
Sure, mobile homes can be factory-built. But since they’re manufactured far from where they’ll be placed, shipping costs and complications are still high.
But now a startup has created a solution to this problem…
Boxabl is a housing company. Its mission is to vastly lower the cost of home ownership.
Thanks to its manufacturing and shipping innovations, it can create affordable, mass-produced housing in a factory.
Its first home — a $50,000 house called “Casita” — folds up flat so it can be shipped easily and inexpensively. Upon arrival, it can be unfolded and set up in a few hours. It includes a washer, dryer, fridge, stove, bathroom, kitchen, HVAC, and more. Just add your bed, couch, and TV.
Furthermore, its products aren’t just meant to solve the housing crisis. They can also be used for disaster relief, military, multi-family, residential, hospital units, etc.
Progress to Date
In 2020, Boxabl started raising money to build a new type of house factory.
After raising more than $55 million, it now runs a 170,000 square foot factory capable of making thousands of homes and producing millions in revenues.
In addition to the homes it’s already shipped, it’s received 80,000 reservations for new homes, 4,000 of which include paid deposits.
Now that the company has proven its ability to execute, it’s seeking to raise about $1 billion to build the world's largest and most advanced housing factory.
And of that $1 billion, it’s aiming to raise about $70 million from investors like you.
Should you invest?
The Pros and Cons of an Investment
There are plenty of “pros” to this investment, including these:
- Massive Market. Globally, the construction industry is expected to be worth $15 trillion by 2023.
- Traction. Customer interest already exceeds the company’s ability to supply product for the next several years.
- A Moat. The company hold 39 patents to protect its unique solution.
But on the con side…
The valuation for this round is $3 billion.
We aim for 10x returns on our startup investments. So in this case, an exit would need to be worth at least $30 billion.
Is that possible? Given that major home builders like Toll Brothers (NYSE: TOL) are worth just $5 billion or so, it seems unlikely. That helps explain why I’m not recommending you run out and blindly invest in Boxabl. This is a risky venture. It requires substantial research to understand how things might play out, and what its return profile might look like.
But if you believe renting a $900 per month tent is insane, this startup might be worth a look.
Please note: Crowdability has no relationship with any of the startups we write about. We’re an independent provider of education and research on startups and alternative investments.