Creating a Game-Changing "Premium Motorcycle" Brand, Designed and Built in NY $10m "Series A" Fund Raise - September 2016 - Family Office Insights
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Creating a Game-Changing “Premium Motorcycle” Brand,
Designed and Built in NY
$10m “Series A” Fund Raise
September 2016
Disclaimer
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
2
“Premium Motorcycles” segment: a gap in the market
while the premium car segment is thriving
The Premium Car Segment
• Car Market Penetration: 11%
• Faster Growth
• More Profitable
• Better Resilience
Premium Characteristics
• Design: more considered
• Innovation: ahead
• Customer experience: using
“luxury codes”
• Pricing: +30%
Motorcycle Car
market market
3
Premium segment: a $3bn+ growing opportunity
only seized by incumbent manufacturers by “souping up” existing models
Market CAGR
875,000 ~100,000 14-20(E)
100% Rest of the
LatAm +11%
Upgraded components,
cosmetics
World
LatAm Japan +0%
Japan
+53%
Asia
80% +16% Ducati Diavel Dark
Asia Pacific Ducati Diavel Titanium
Pacific $18,295 $27,995
60%
Europe Europe
+4% Upgraded engine and
(15)
(15)
power, cosmetics
+45%
40%
Harley Breakout Harley Breakout CVO
$18,599 $26,899
US &
20% US & Canada +5%
Canada
Upgraded engine, power
and components
0% +135%
Heavyweight* of which
MV Agusta F4 MV Agusta F4 RC
Motorcycles Premium
$19,495 $45,995
(2014) Motorcycles**
*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 4
We are creating an iconic Premium Motorcycle
We have the talent, energy and experience required to make it happen
Consultant (1991 – 1996)
“Wraith” (2006 – engineering) “Hellcat” (2011) Co-founder (1996 – sold in 2008)
Co-Founder (since 2009)
Investor (since 2002)
“Fighter” (2009) “Thunderbird” Concept for Triumph (2013)
Edward Jacobs – Motorcycle designer since 2004 F-X Terny – Entrepreneur since 1996
Designed, engineered and brought onto the road Serial entrepreneur, expert in supply chain and cost optimization,
ground-breaking motorcycles experienced board member and investor in mid-size companies
5
Our motorcycle: integration of design and proven technologies
Resulting in timeless lines, functional performance and patentable innovations
Design Technology
Considered, contemporary, bold, utilitarian Innovation driven by necessity
• 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
Our design universe
Manufacturing Sourcing
Modular Sub-Assemblies Proven technologies, pragmatic choices
• Highly modular design, based on large sub-assemblies*, • Convincing best-in-class motorcycle component vendors to
allowing to reduce assembly time and non-quality costs grant us large volume OEM prices
• Modular design and assembly breaks away from traditional small • Sourcing from non-motorcycle vendors to use proven
batch assembly, and does not require “motorcycle technologies from other industries (e.g. aerospace)
specialized” workers • Applying high-volume production processes to small to
• Common powertrain platform for 3 motorcycles covering all medium size volume production to be cost-competitive
riding positions in the market
* Patentable innovation 6
Our offer: accessible luxury
An iconic brand “Designed and Assembled in NY” at a $30,000 retail price
50 Price Positioning
• Starting at $30,000, a premium price yet within the existing market
• A strong alternative to current premium motorcycles from
40
established manufacturers, offering great value for money
Our pricing Branding
• Honest, Utilitarian, Authentic, Industrial, Contemporary,
30
Innovative and Pure: our branding focuses on the core values of the
motorcycle and its design
• Emphasize the fact that our Motorcycles are “Designed and
Assembled in New York”
20
Marketing
• Combine traditional marketing strategies based on honest
10 communication (product centered, fact-based, transparent) with
experiential and “guerrilla marketing”
Traditional marketing focusing on website, public relations and
endorsements
0 Experiential and “Guerrilla marketing” focusing on low-cost
unconventional ideas, integrating our motorcycle in the urban and
Motorcycle retail price ranges social environment, and making direct contact with potential
($ ‘000) customers to let them experience our product
7
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
314,000 ~7,000 4,500 Our proposition
100%
3,850
30 to 50 Dealers in the US
Other
80% Brands
Non
• Covering 70% of the premium
Adapted motorcycle market in the top
3,000
2,850 30 North American metropolis
60%
2,600
Attractive “Add-on Brand”
• $4,500+ commission
40%
Multi • Limited floor space (200 to
Brand 500 sqft) and set up costs
• 40+% margin on additional
20%
products (helmets, gear,…)
• Objective of 30+ unit annual
Exclusive
sales per dealer
0%
Heavyweight* US Powersports Upfront Dealer Commission
Motorcycles US Dealerships per Motorcycle (US$)
Sales (2014) (2014)
*Heavyweight motorcycles = on-road motorcycles above 601cc 8
Key milestones
2015 for prototyping, 2016 for pre-orders and dealers, 2017 for production
Validation of
Presentation of Concepts Final design and Prototypes begins
in NY, LA, Paris, London, engineering. Signing of + Pre-orders and Brand First
Chicago, Tokyo, HK OEM contracts pre-dealers begin launch Deliveries
2013 2014 2015 2016 2017
Founding of First round of Second round of
Filing of Patents
FXE Industries financing (∑ = $1.6m) financing (∑ = $10m)
Feedbacks from industry professionals :
I am the General Manager and Owner of Ducati Triumph New York. Our dealership has My name is Jared Zaugg, and I co-founded the Legend of the Motorcycle International
had a relationship with FXE since the Company’s founding. We have seen the motorcycle Concours d’Elegance.
designs and are confident that the new brand has great potential for success in the I have followed from the very beginning the creation of the concept, philosophy, design,
market. engineering of the FXE Industries motorcycles. What they are producing is truly
Mototainment looks forward to becoming one of the first dealers to carry the brand. Not innovative and I believe the company has the potential to develop a strong foothold in the
only is the brand positioning itself in the growing market for premium motorcycles, but premium market place. FXE Industries has my full support as they launch the Company,
FXE offers an attractive unique design and a “Made in New York” message. We have a and I believe they will be hugely successful as they are filling a gap in the market where
strong inclination that FXE’s offering will resonate well with our customers. there is a strong demand from discerning riders.
Steve Radt, Owner, Ducati Triumph Dealership (New York) Jared Zaugg, Legend of the Motorcycle
9$10m Series A
Investment Structure and Use of Funds
0.7 10.2 11.8
12 Use of Funds
($m) 0.6
Offering Terms 1.8*
10
1.3
• Series A: $10m
8 1.2
• Timing: S2 2016
4.6
6
• Structure: Preferred Equity
• Valuation: [33.3]% of capital 4
• Purpose: Production and
Market Entry 2 1.6
0
Seed K Capex Capex 18 Marketing Ops WC Fund Raise Funding Total
16/17 16/17 Losses* 16/17 Fees Needs Funding
* Total of $2.3m, of which $0.5m are financed by seed capital and capitalized retainers 10$100m revenue - 3,000 motorcycles by year 6
Capturing a conservative 3% of the premium market
Annual Production Forecast Revenue
(units) ($m)
3,000
3000 120
106
2500 100
2,200
2000 80 77
1,500
1500 60
52
1,000
1000 40
34
500
500 20 17
200
6
Proto Proto
0 0
2016 2017 2018 2019 2020 2021 2022 2016 2017 2018 2019 2020 2021 2022
11EBITDA breakeven with 400 motorcycles
EBITDA and Cash positive in 2018/9
25 25
EBITDA ($m) Cash-Flow * ($m)
20.6
20 20
17.0
15 15
13.7
10.8
10 10
8.2
5.7
5 4.3 5
0.7 0.8
Pre-Rev 2016 2017 Pre-Rev 2016 2017 2018
0 0
2018 2019 2020 2021 2022 2019 2020 2021 2022
-1.1 -0.9
-1.6 -2.1 -1.6
-5 -5
-4.7** -4.1
* 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 12We 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
fxterny@fxe-industries.com Brooklyn, NY 11205 cocoutant@fxe-industries.com
Main: +1 718 246 5300
www.fxe-industries.com
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