designed and built in ny - family office insights...an iconic brand “designed and assembled in...
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Creating a Game-Changing “Premium Motorcycle” Brand,
Designed and Built in NY
$10m “Series A” Fund Raise
September 2016
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No visuals (besides the cover and last image) of our designs, engineering or prototype are shared in this introductory document
We strictly control our communication before we publicly launch our Brand,
at the NY Motorcycle Show in Dec 2016
Our designs and prototype are however presented to interested parties in face-to-face meetings
Thank You for your understanding
Disclaimer
3
“Premium Motorcycles” segment: a gap in the market while the premium car segment is thriving
• Car Market Penetration: 11%
• Faster Growth
• More Profitable
• Better Resilience
Motorcycle market
Car market
The Premium Car Segment
• Design: more considered
• Innovation: ahead
• Customer experience: using “luxury codes”
• Pricing: +30%
Premium Characteristics
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Premium segment: a $3bn+ growing opportunity only seized by incumbent manufacturers by “souping up” existing models
*Heavyweight motorcycles = on-road motorcycles above 601cc **Premium motorcycle market estimated using premium car penetration % by geographical regions, corrected by motorcycle penetration and acceptance Source : Harley Davidson 10K, BMW Group Annual Report, VW Annual Report, Ibis World Motorcycle Report, Press, FXE Analysis
US &
Canada
US &
Canada
Europe
(15)
Europe
(15)
Asia
Pacific
Asia
Pacific
Japan
Japan LatAm
LatAm Rest of the
World
0%
20%
40%
60%
80%
100%
Heavyweight*Motorcycles
(2014)
of whichPremium
Motorcycles**
875,000 Market CAGR
14-20(E)
+5%
+4%
+16%
+11%
+0%
~100,000
MV Agusta F4 RC $45,995
MV Agusta F4 $19,495
Ducati Diavel Titanium $27,995
Ducati Diavel Dark $18,295
Harley Breakout CVO $26,899
Harley Breakout $18,599
Upgraded components, cosmetics
+53%
Upgraded engine and power, cosmetics
+45%
Upgraded engine, power and components
+135%
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We are creating an iconic Premium Motorcycle We have the talent, energy and experience required to make it happen
“Fighter” (2009)
“Wraith” (2006 – engineering) “Hellcat” (2011)
Edward Jacobs – Motorcycle designer since 2004 Designed, engineered and brought onto the road ground-breaking motorcycles
Co-founder (1996 – sold in 2008)
Consultant (1991 – 1996)
F-X Terny – Entrepreneur since 1996 Serial entrepreneur, expert in supply chain and cost optimization,
experienced board member and investor in mid-size companies
Co-Founder (since 2009)
Investor (since 2002)
“Thunderbird” Concept for Triumph (2013)
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Our motorcycle: integration of design and proven technologies Resulting in timeless lines, functional performance and patentable innovations
Design Considered, contemporary, bold, utilitarian
Manufacturing Modular Sub-Assemblies
Technology Innovation driven by necessity
Sourcing Proven technologies, pragmatic choices
• Convincing best-in-class motorcycle component vendors to grant us large volume OEM prices
• Sourcing from non-motorcycle vendors to use proven technologies from other industries (e.g. aerospace)
• Applying high-volume production processes to small to medium size volume production to be cost-competitive
• Highly modular design, based on large sub-assemblies*, allowing to reduce assembly time and non-quality costs
• Modular design and assembly breaks away from traditional small batch assembly, and does not require “motorcycle specialized” workers
• Common powertrain platform for 3 motorcycles covering all riding positions in the market
• Frameless design with a structural engine*
• Unitized crankcase*, integrated exhaust* system with advanced heat shielding, swing arm with shaft-drive and encapsulated rear suspension*
• Digital dashboard and LED front lights
* Patentable innovation
Our design universe
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Our offer: accessible luxury An iconic brand “Designed and Assembled in NY” at a $30,000 retail price
0
10
20
30
40
50
Motorcycle retail price ranges ($ ‘000)
Price Positioning
• Starting at $30,000, a premium price yet within the existing market
• A strong alternative to current premium motorcycles from established manufacturers, offering great value for money
Branding
• Honest, Utilitarian, Authentic, Industrial, Contemporary, Innovative and Pure: our branding focuses on the core values of the motorcycle and its design
• Emphasize the fact that our Motorcycles are “Designed and Assembled in New York”
Marketing
• Combine traditional marketing strategies based on honest communication (product centered, fact-based, transparent) with experiential and “guerrilla marketing”
Traditional marketing focusing on website, public relations and endorsements
Experiential and “Guerrilla marketing” focusing on low-cost unconventional ideas, integrating our motorcycle in the urban and social environment, and making direct contact with potential customers to let them experience our product
Our pricing
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Access to market: creating a win-win with the best US dealers An image-builder motorcycle giving access to US-brand riders and Premium clientele
4,500
3,850
3,000 2,850
2,600
Upfront Dealer Commission per Motorcycle (US$)
30 to 50 Dealers in the US
Attractive “Add-on Brand”
Exclusive
Multi Brand
Other Brands
Non Adapted
0%
20%
40%
60%
80%
100%
Heavyweight*Motorcycles USSales (2014)
US PowersportsDealerships
(2014)
314,000 ~7,000
• $4,500+ commission
• Limited floor space (200 to 500 sqft) and set up costs
• 40+% margin on additional products (helmets, gear,…)
• Objective of 30+ unit annual sales per dealer
*Heavyweight motorcycles = on-road motorcycles above 601cc
Our proposition
• Covering 70% of the premium motorcycle market in the top 30 North American metropolis
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Key milestones 2015 for prototyping, 2016 for pre-orders and dealers, 2017 for production
2017 2016 2015 2014 2013
Presentation of Concepts in NY, LA, Paris, London,
Chicago, Tokyo, HK
Final design and engineering. Signing of
OEM contracts
First round of financing (∑ = $1.6m)
Second round of financing (∑ = $10m)
Filing of Patents
Validation of Prototypes begins + Pre-orders and pre-dealers begin
First Deliveries
Founding of FXE Industries
I am the General Manager and Owner of Ducati Triumph New York. Our dealership has had a relationship with FXE since the Company’s founding. We have seen the motorcycle designs and are confident that the new brand has great potential for success in the market. Mototainment looks forward to becoming one of the first dealers to carry the brand. Not only is the brand positioning itself in the growing market for premium motorcycles, but FXE offers an attractive unique design and a “Made in New York” message. We have a strong inclination that FXE’s offering will resonate well with our customers.
Steve Radt, Owner, Ducati Triumph Dealership (New York)
My name is Jared Zaugg, and I co-founded the Legend of the Motorcycle International Concours d’Elegance. I have followed from the very beginning the creation of the concept, philosophy, design, engineering of the FXE Industries motorcycles. What they are producing is truly innovative and I believe the company has the potential to develop a strong foothold in the premium market place. FXE Industries has my full support as they launch the Company, and I believe they will be hugely successful as they are filling a gap in the market where there is a strong demand from discerning riders.
Jared Zaugg, Legend of the Motorcycle
Brand launch
Feedbacks from industry professionals :
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$10m Series A Investment Structure and Use of Funds
1.6
4.6
1.2
1.3
1.8*
0.6
0.7 10.2 11.8
0
2
4
6
8
10
12
Seed K Capex
16/17
Capex 18 Marketing
16/17
Ops
Losses*
WC
16/17
Fund Raise
Fees
Funding
Needs
Total
Funding
Use of Funds ($m)
• Series A: $10m
• Timing: S2 2016
• Structure: Preferred Equity
• Valuation: [33.3]% of capital
• Purpose: Production and Market Entry
Offering Terms
* Total of $2.3m, of which $0.5m are financed by seed capital and capitalized retainers
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Proto
200
500
1,000
1,500
2,200
3,000
0
500
1000
1500
2000
2500
3000
2016 2017 2018 2019 2020 2021 2022
Annual Production (units)
$100m revenue - 3,000 motorcycles by year 6 Capturing a conservative 3% of the premium market
Proto 6
17
34
52
77
106
0
20
40
60
80
100
120
2016 2017 2018 2019 2020 2021 2022
Forecast Revenue ($m)
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EBITDA breakeven with 400 motorcycles EBITDA and Cash positive in 2018/9
-1.6
-4.7** -4.1
-0.9
0.8
5.7
10.8
17.0
-5
0
5
10
15
20
25
2019 2020 2021 2022-1.1
-1.6 -2.1
0.7
4.3
8.2
13.7
20.6
-5
0
5
10
15
20
25
2018 2019 2020 2021 2022
EBITDA ($m) Cash-Flow * ($m)
Pre-Rev 2016 2017 Pre-Rev 2016 2017
* Unlevered, pre-tax cash flows. No tax anticipated before 2020 given first years operational losses ** Out of which $0.5m are financed by seed capital and capitalized retainers
2018
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We look forward to showing you our prototype and detailed strategy
Francois-Xavier Terny FXE Industries Claude-Olivier Coutant
CEO & co-Founder Brooklyn Navy Yard, Building 152 Investor & Adviser to the CEO
Cell: +1 212 518 6106 63 Flushing Ave, unit #199 Cell: +44 7711 205626
[email protected] Brooklyn, NY 11205 [email protected]
Main: +1 718 246 5300
www.fxe-industries.com