Great ideas happen when you wake up shivering in the dead of night in the west of Ireland. We knew there had to be a better way of getting a good night’s sleep in the great outdoors. We needed a tent that is more than a tent; that is a comfortable refuge that would be warm in the winter and cool in the summer. In a moment of freezing clarity, we realized that we were going to have to build it ourselves.
At Crua Outdoors (trading name of Thermo Tents Ltd) we have essentially begun a 'Tent Revolution' by designing and developing what we understand to be the world's very first thermally and acoustically insulated tent or tenting system. Our (patent-pending) multi-layer design and brand new insulation technology have applications in:
- Recreational Tents
- Glamping Tents (Luxury Camping)
- Disaster Relief Shelters
- Industrial Shelters
Our tents keep you cooler in summer, warmer in winter and they muffle noise and light transfer in and out of the tent.
People like to camp but dislike the lack of comfort associated with tents. Typically, once temperatures drop outside conventional tents follow suit and become very cold. The opposite is also true. In warm climates, once the sun rises, traditional tent design means that tents become unbearably hot and bright. When camping in a busy campsite or noisy area, one can find it hard to sleep due to the noise.
People that engage in hunting and fishing etc. & 'hardcore' campers, that are very much at home by the campfire and want to be outdoors all year.
The 'Overland' community - groups into using their 4x4's, bikes etc
The Glamping community
We have also identified a niche in the Oil & Gas industry and have developed an industrial tent that is both insulated and blast resistant which makes it very attractive to the industry. There has been a lot of interest in this from within that massive industry and we're developing different customized solutions for two huge players.
Substantial accomplishments to date
3 x successful crowdfunding campaigns
US$300,003 raised in pre-orders from 965 backers
£70,005 investment raised in Seedrs (Round 1) 119 investors
€50,891 raised in pre-orders from 175 backers
Since our last Seedrs round we have developed and brought to market 3 new products.
We have also been accepted into the 'Enterprise Ireland High Potential Start-Up programme'.
National TV in Ireland:
Some of our media cover:
This is a government body responsible for creating export based employment in Ireland. They’re a small shareholder through their ‘Competitive Start Fund’. We also qualified for their highly regarded ‘High Potential Start-Up programme’, after very thorough Due Diligence process. We now have access to their range of international market offices all over the world, which really help us to enter new markets. They also supply very high quality mentors and grant support.
As we are a product based company, our profits come from sales of Crua products, primarily across The UK, Europe, North America and beyond. Our products are currently manufactured by third parties, but we plan to bring prototyping in-house this year.
We aim for a minimum 50% gross margin on everything as we believe this is what we need this to maintain a sustainable business. B2B sales to retailers / re-sellers will mean slightly lower margins but high volumes.
Recreation: We sell both B2C (online) and B2B (re-sellers - e.g. Cabela's)
Industrial: We sell B2B as this is our end user / customer
Glamping: We sell B2B directly to the sites and through our agent in the UK.
As sales volumes increase, we anticipate that margins will increase by nearly 10%, once we streamline the process, but it is important that quality and unique design remains the main objective through the short-term.
Use of proceeds
We have specific milestones for these funds:
A) Commercial Milestones Recreational
To continue to build brand awareness and sales through:
1. Creation of good online content & Digital Marketing
3. Exhibiting at the Outdoor Retailer Show in Salt Lake city
4. Launching at least 1 new product range through Kickstarter this year
5. Continued development of our website and accrual of suitable re-sellers
B) Commercial Milestones Industrial
1. To continue to liaise with large partners and offer them customised shelter solutions that are blast resistant and insulated in Oil and Gas.
2. To bring in 5 new customers in 2017
3. One strategic hire from industry
C) Tech Milestones Recreational
1. Continued Research and Development of our products - Critical to stay ahead of any competitors in this space
2. 2 x new product design
3. Continued IP protection
D) Tech Milestones Industrial:
1. New patent application
Outstanding Convertible Investments
Investors should note that the company has two outstanding investments that may convert to equity (and dilute existing shareholders):
POINT POSITIVE CONVERTIBLE
Point Positive investors have invested US$262,500 in the form of a promissory note, based on 6% annual interest rate, maturing on 31 December 2020. Point Positive has the option to convert the principal and accrued interest into equity at the Maturity Date (rather than seeking repayment) at a conversion price of US$20.58 per share (the share price of this investment round is £27.97).
However, if Thermo Tents raises US$1,000,000 or more in equity prior to the Maturity Date, then the promissory note will automatically convert to equity at a 20% discount to the price set by the trigger raise.
ENTERPRISE IRELAND CONVERTIBLE PREFERENCE SHARES
Enterprise Ireland have invested €250,000 in the form of Cumulative Convertible Redeemable Preference shares. These shares carry the following rights:
• A cumulative and preferential dividend equal to 3% of the investment per year. The dividend will only be paid if the shares are redeemed or on a return of capital to shareholders of the company, without conversion of the shares to ordinary equity.
• The preference shares are convertible into ordinary equity if the Company raises €250,000 or more from a VC or other institutional investor within 5 years. They will then convert at the same price as the qualifying investment, subject to a discount ranging from 15% to 55% depending on the time at which the qualifying investment takes place.
We are focusing on three specific markets:
1. Insulated camping tents (for the hardcore outdoors person that wants to camp all year) - in the US alone there was an annual spend of $646 billion on outdoor recreation (Source: Outdoor Industry Association). All indications are that this market has responded very positively to our products. We are very targeted in our approach as we are building the brand from the inside out - i.e. appeal to the hardcore market first and the mass market will follow.
2. Industrial - Middle East and North America - We were approached by companies in the Middle East and North America to develop customized shelter solutions for the Oil and Gas industry. This has resulted in us developing insulated tent products for two large players in this field, including the largest construction company in the USA.
3. Glamping (Luxury Camping) Tents in UK, Europe and the USA - There is massive potential here as our Safari Style product offers an unparalleled level of comfort while offering the Glamping site an opportunity to extend their season as well as decreasing their heating and air-conditioning bills.
These three markets utilise the same technology and design so they compliment each other, allowing us to remain laser focused on our product and business objective.
We have a presence in Europe through our Irish office and in North America through our office in upstate New York.
Characteristics of target market
We target the 35-60 year olds
North America, UK and Scandinavia
High Outdoors interest - all year activity, e.g. family camping in the Summer, fishing in the Spring and hunting in the Autumn / Winter
Above average disposable income
We sell direct B2C and through re-sellers, e.g. Cabela's
Market as a whole is worth $646 Billion in the USA alone per annum.
Glamping and camping businesses in North America and The UK - higher end sites with higher price demands
This is two pronged.
1. We target construction companies that do the work for Oil and Gas companies on their sites
2. We target rental companies that rent shelters, plant and machinery to these construction companies, and directly to the Oil and Gas companies. The main characteristics of both of these types of customers is their scale - so by customising an insulated shelter exactly for their needs, you open very large volume possibilities.
The Oil and Gas industry is a $1.7 Trillion dollar business and one of the companies we are developing a shelter for has annual revenues of $32.3 Billion per annum, making it the largest construction company in the USA by revenue.
We will have 4 primary routes to market which we must consider:
1. Directly Online through our ecommerce website www.cruaoutdoors.com - this is the preferred option as we can control margin and the reaction times etc. We market to this audience through SEO, SMO and targeted advertising / remarketing with Google Adwords and Facebook primarily. (B2C)
2. Through resellers and retailers, carefully selected as we must be careful with how our brand is portrayed. Not every outdoor shop is suitable, so we have hand-picked some that we are focusing on at the moment. (B2B and B2C - dropship). We also use this strategy with our Glamping tents, using distribution agents.
3. Through exhibitions and tradeshows - we have used these in the past and have learnt that some are more effective than others so we will concentrate on the Outdoor Retailer Show in Salt Lake City for 2017/2018.
4. Direct engagement with Industrial partners and customers is essential. This is done through contacts within the Oil and Gas industry, which we have acquired ourselves and through the 32 localised Enterprise Ireland offices around the world.
Because what we do is to our knowledge completely unique, we don't consider there to be any direct competitors. But we do have indirect competitors so we make it our business, in a very measured way, to analyse the major players in our two key markets.
However, we very much feel that concentrating on getting our own unique offering correct, and in front of the right people, is much more important. So, although we observe what the competition is doing, we don't obsess over it. More, we make sure that our products are presented in the best way possible, aiming to be better than the industry standard, and that they offer a better solution than anything available.
We also monitor best online practices for selling and displaying products, in other industries. eCommerce is ever evolving and as this is an important part of our strategy, we must be sure that we are ahead of the curve.
In Oil and Gas, we have been careful to discuss what we are doing with the companies themselves, ensuring that we are solving an actual problem for them, thus aiding productivity on site.
Also, we are careful to protect our IP with one patent pending and another due to be filed in May 2017.