Interview and breakdown of this StartEngine offering!
We’re back talking about another StartEngine startup, and honestly, I think this one is really solid. I was lucky enough to sit down with the Co-founders of Geoji and do an interview with them. With startups, founders are one of the most important aspects of the business because the founders are the business at that point. In many instances, it’s a small team making all the decisions, doing all the work, and making it all happen. It’s not like Apple, where if one person leaves, the ship keeps sailing because it’s such a massive company. However, if a founder leaves a startup, then the startup might just go under. So, I like to talk with and interview founders whenever I get the chance because it’s great to get a feel for their vision and how serious they are for the business. The full interview is posted here to watch (and also make sure to subscribe!):
Overall, it was great meeting them, and Blane and John were both incredible and really great guys. I will get more into the specifics below, but it was all around a really great meeting.
What is Geoji?
Honestly, the idea is amazing, in my opinion. There are two pretty distinctive aspects to Geoji:
The fintech/payment processing side
Both are pretty simple but actually incredibly innovative. The map is basically like Google maps, but it shows you in real-time various events going on in the world. Google maps is excellent because it can provide navigation to your favorite restaurant, but the process of getting on Google maps can be lengthy, and it's more for established businesses rather than
short-term events. Geoji is more about being in real-time. You can tune on and see live events currently happening like garage sales, concerts, farmer's markets, etc. It’s a great opportunity for smaller operations to show people what's going on in real-time or for an unofficial business or side hustle to list their product and sell something. Rather than selling on eBay, you can simply post on a local map, and people can find you selling your homemade wood tables and pick them up in person. This seems like something I would definitely use to find fun events going on for date night or if I wanted to go and look at some stuff for garage sales.
The other aspect of this is the Fin-tech aspect of this. Not only can people and businesses list on Geoji, but they can also sell things like tickets, food, or other items through their listing. This means you can host a garage sale, then list everything through the app that is available at the garage sale and people can purchase it before they even arrive.
Industry — 9/10
Geoji has two industries they are technically in, so it’s a bit unclear what to classify this as. They are a tech startup, which is a pretty hot market right now and a great place to be given the recent tech craze (and the fact it probably won’t ever slow down). However, more specifically, they are in FinTech which is one of the fastest growing industries between crypto, stock investing, equity crowdfunding, and other money-related startups. The other is, technically, social media. At its core, this is a social media company built on making people more social in the real world rather than on the internet.
Unlike the covid tech craze, which rewarded companies for people keeping their distance from each other, this company is about bringing back human interaction. You’re betting on people going to events, having garage sales, businesses advertising, startups using this to get people involved, pumpkin patches, holiday events, farmers markets, etc. That’s one reason I actually like this is because it’s one of the only social media companies focused on actually bringing people together in real life, and the potential is massive. If this takes off, businesses will use it for advertising if nothing else, and lots of small creators will use it for sales and getting found. People will use it to find their niche like date nights, garage sales, holiday festivals, concerts, etc. They technically classify themselves in the “global events” market in their Form C, but I think there’s a lot more to them than that personally.
Overall, there is lots of potential here, and I am definitely excited for all of it.
Market Differentiation — 20/30
Business Model & Product — (7.5/10)
This does take some hits because the app is currently only available on IOS, and their business model could be better in some respects. As some have pointed out, the 7% processing fee is a bit high compared to similar competitors. The founders did note they are experimenting with various monetization avenues like marketing and promotion features, so it will be interesting to see how that turns out. Overall, taking a percentage of sales can be an extremely profitable and easy way to earn revenue, and as the app grows, if the GMV increases exponentially, they could easily scale revenue.
If this becomes mainstream, the potential revenue from advertising could be equally as massive because the discoverability aspects could be really big. For example, Niantic has said they receive 15 cents PER VISITOR sent via Pokemon go. If Geoji is able to work out brand deals like that, then there are millions to be made. Other monetization features like allowing people to pay to sponsor and promote events within the app could help branch out and a host of other monetization features.
However, most of that is speculation. Currently, there is just the 7% based on GMV through their app, only through IOS. It is an early-stage company with less than a $10 mil valuation and is about a year and a half old, so it’s understandable. Not to mention, a 7/10 is still well above average.
One thing I do like about this is it allowed for everyone to use it for free. People can create events for free, and people can find events for free. This makes scaling and growth incredibly easy as they can monetize without needing to convince people to pay money, and they make money solely from the value they provide to people using their platform.
IP, Branding & Social Media— 5/10
To my knowledge, they don’t have any IP, but that’s also not surprising given how young of a company they are. No real complaints with branding, and the only social media I can find is their Instagram and Facebook pages. Their Facebook doesn’t have very much activity, but their Instagram is sitting at almost 5000 subscribers, so that’s actually pretty solid for a company their size.
They did have “patent-pending” on their website in relation to their payment processing system at one point, but I cannot find that or anything else on their materials. So, that might be true, it might be something in the works, but I am not sure. However, a patent would definitely help this category. Conversely, I cannot really blame them for not having much IP, given how young the company is though.
Competitors — 7.5/10
They do have quite a bit of competition, and there are some big names in the space. However, they don’t have any “direct” competitors that I can find or know of. There are plenty of payment processors, there are plenty of companies used to event logistics and software, and there are things like Google maps for discovering people. However, nobody is doing quite what they are. So this does rank very strong in this category generally. However, not perfect because, within each of these categories, there are some significant and established players.
Their FinTech side is mainly competing with the like of Square as a point-of-sale payment processing system. Venmo is another competitor in some sense, as they are a hardwareless payment system (although not targeted at businesses quite as much). Geoji doesn’t use hardware and is targeted at businesses so it’s kind of unique in some respects just in this regard. However, the real differentiation is the map with discoverability.
On the event side, they have some stuff that is really unique and some that isn’t. Selling tickets isn’t anything new, but they do much more than that. You can set up concession stands within the app, and it can be used as a point of sale for tons of different services like bottle service at clubs, for example. So while there are lots of event companies, none are quite as broad as Geoji.
All around, this scores very well.
Financials & Valuation — 27.5/30
Personally, I think the valuation is incredibly fair given everything. It’s currently sitting at a $9 million valuation with roughly $100k revenue in the past 12 months and $1.3 million of sales through its app. They have a ton of momentum right now for only about a year and a half of operating. 80x revenue is, obviously, not a great multiple for something like the open stock market, but for an early-stage company experiencing significant growth, that’s not bad. I’ve seen companies raise at 10x this without a product yet, so sitting at a valuation of under $10 million with substantial revenue and a relatively finished product, I have no complaints about the valuation.
$9 million is also low enough where if they succeed, this could be a 100x or more return. For example, a $1 billion valuation would turn a $500 investment into $50,000. That amount doubles for every $1 billion added to their valuation. Realistically, I think that’s achievable if they are able to get this on a few million people's phones.
For reference, they think they can get up to $10 million in GMV (gross merchandise volume) on their platform in the next 12 months, which would result in about $700,000 in revenue. That would put their valuation at only about 12x future revenue, which is incredibly reasonable.
As I have noted a few times, they have a lot of momentum right now. They have processed $1.3 million in transactions in the past 12 months and said they think they can get that up to $10 million in the next 12 months. Given their platform, I think that’s totally possible as well. They have several customers already using their app several times a year, so if they can just continually increase that pool of people, then it’s pretty simple. People using this for payment processing don’t necessarily need to have others using the app to make it worth their while.
However, they will likely need to ramp up marketing at some point to get everyday people using this for other purposes. Right now, the app obviously isn’t very active, even for those that live in big cities, as it’s so new. As it continues its momentum, that will likely change just because as more people use it, more will discover it. However, making it active enough in various large cities across the country will be a big task. If there are no events posted in various large cities, then people won’t have a reason to use it and that momentum could slow.
However, again, it’s free to use, and there are very few downsides to using this vs. plenty of upsides (like free advertising), so it should be easy to convince people.
Revenue & Financials — 8.5/10
There’s not much here, again, as the company is so new. They have some debt, but all of the debt is literally from the founders at 0% interest and not due for another 3 years, so that’s nothing to worry about. They have some solid revenue for their size and good momentum, so this is solid all around.
Founders & Team — 16/20
Currently, it seems this is primarily a 2-man team between the co-founders, John and Blane. John is the marketing and business side of things, and Blane is the technical side doing the programming for the various platforms. It’s a good combo and seems to work well. They have prior solid skillsets doing what they are currently doing, so they can definitely make this happen.
As a potential downside, they haven’t had any notable exits from previous ventures. Investors like to see founders with previous exits because the logic follows “They’ve done it once, they can do it again.”
Something I do think is important to note is:
Neither of the co-founders take a salary
They have all given tens of thousands of dollars in the form of 0% interest loans to the company, and so have the parents of one of the co-founders.
Meaning they are pretty heavily invested in this. It tells me they are taking it seriously and the progress and momentum up till now shows me they know what they are doing. As well, bonus points for sitting down for an interview and talking with investors about the company.
Meeting and talking with them personally for about an hour showed they were all around super passionate about the project, really great all around, and had an excellent vision for the company. Make sure to watch the video above to decide for yourself, though!
X-Factor/Exit Potential — 9/10
There’s been a number of unicorns minted in this space, and that’s without the map. Square and Stripe are both worth tens of billions of dollars, and they have only been growing. This could easily scale to that as they expand the payment processing side, but I could also see
the map side of things getting large enough within itself to become a billion-dollar company. I think if they expanded the map side of things to have more social features where this is something people can use to chat, make plans, save dates, and centered around being a “social media app for the real world” then this could easily become a big enough company to see a significant exit.
Conclusion — 81/100
Overall, this company ranks incredibly well, especially for a company in such its early stages. I was super pleased all around with this company, and I think it has massive potential, personally.