Mobility company that wants to build the Uber/Lyft interface for dollar vans. I’ve taken these in New York before and they’re a great service, though I’m uncertain how many would want to give 25-33% of revenue to an app. Tripled revenue in the last year but had next to nothing in 2019.
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- Demand: I’ve ridden one of these dollar taxi vans before, and they’re great. My read is also that they prefer cash transactions and are hyper local. Will there be demand for these apps to lose “Our primary income comes from a $0.50 – $1 service fee collected from each ride.” That’s 25-33 revenue gone to servicing the app. And what incentive is there to stay on the platform?
- Defensibility: What happens when Dollaride proves the unit economics of underserved areas? What’s to stop another company from coming in?
- Competition: Via seems to serve this use-case exactly, with commute emphasis competing with Uber/Lyft. Not sure there’s room for another niche.
The 6 Calacanis Characteristics (91 161 18)
|1. A startup that is based in SV||No: New York, NY|
|2. Has at least 2 founders||Yes: 2|
|3. Has product in the market||Yes|
|4. 6 months of continuous user growth or 6 months of revenue.||Yes: 2019 rev was 102k and 2020 rev was 450k.|
|5. Notable investors?||No: save maybe Columbia Business School, but eh.|
|6. Post-funding, will have 18 months of runway||No: 2019 burn was $133k, raised 115k, so only 14 months.|
The 7 Thiel Questions (ETMPDDS)
- The Engineering question:
- No: Not convinced this is 10x better than Uber/Lyft/Via from a technology standpoint.
- The Timing question:
- No: Uber/Lyft are tackling the commuter solution and just released passes (again) to try and solve retention.
- The monopoly question:
- Didn’t Bother: Targeting transportation deserts. The moment those markets become more affluent, I’m concerned that Uber/Lyft comes in and swoops in.
- The people question:
- Good Not Great: Founders seem competent but neither has full-time experience working in a ridesharing company/the industry. Makes me concerned that they’ll have to lose some time recreating the wheel so to speak.
- The distribution question:
- Bad: Access to consumers is good but competition is fierce and CACs are going to be high.
- The durability question:
- Bad: One of my main concerns is that Dollaride proves a market then a larger competitor comes and kills them through underpricing once they lay the foundation.
- *What is the hopeful secret?:
- There’s a $250MM ARR business to be built in servicing transportation deserts.
What has to go right for the startup to return money on investment:
What the Risks Are
Muhan’s Bonus Notes
- Current Fundraised: $M
- Valuation: ~8MM
This is where I’ll post updates about the company. This way all my notes from offering to post-offering updates will be on one page.