Manta Biofuel

Reinventing crude oil, renewably this time

Analytics

Raised to Date: Raised: $1,861,738

Aggregate Commitments $
Platform

Republic

Start Date

11/04/2020

Close Date

07/15/2021

Min. Goal

$25,000

Max. Goal

$2,000,000

Min. Investment

$150

Security Type

SAFE

Funding Type

RegCF

Series

Seed

Valuation Cap

$6,000,000

Discount Rate

25%

Rolling Commitments $
Status
Funded
Reporting Date

07/31/2021

Days Remaining
Funded
% of Min. Goal

7,447%

% of Max. Goal

93%

Likelihood of Max
Funded
Avg. Daily Raise

$7,359

# of Investors

4,073

Momentum
Funded
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Location

Owings Mills, Maryland

Industry

Energy, Power, & Natural Resources

Tech Sector

Cleantech

Distribution Model

B2B

Margin

Low

Capital Intensity

High

Business Type

High Growth

Manta Biofuel, with a valuation cap of $6 million, is raising funds on Republic. The company is using algae to make a renewable and cost-efficient replacement of crude oil. The algae biofuel will have net negative carbon dioxide emissions and will be a direct fossil fuel replacement. Ryan Powell founded Manta Biofuel in June 2018 and has raised over $3 million in previous rounds of financing. The current crowdfunding round has a minimum raise of $25,000 and a maximum raise of $1,070,000, and the funds will be used for growth and expansion. Manta Biofuel has raised funds from the US Department of Energy and State of Maryland and has signed $1 million in LOIs.
Summary Profit and Loss Statement
Most Recent Year Prior Year

Revenue

$0

$113

COGS

$0

$1,790

Tax

$0

$0

 

 

Net Income

$-169,922

$-126,378

Summary Balance Sheet
Most Recent Year Prior Year

Cash

$44,174

$262,089

Accounts Receivable

$0

$0

Total Assets

$437,027

$566,058

Short-Term Debt

$258,971

$219,202

Long-Term Debt

$350,000

$350,000

Total Liabilities

$608,971

$569,202

Financials as of: 11/04/2020
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Ratings

Analyst Report

Synopsis

The global oil and gas market was $3 trillion in 2019. The US Energy Information Administration (EIA) claims that in 2019 the US used an average of 20.54 million barrels of petroleum per day. Despite an industry downturn due to COVID-19, the need for oil isn’t going anywhere for a long time. However, the environmental impacts of burning fossil fuels and using oil does have a continued negative impact on the environment.

Manta Biofuel is a company that aims to provide a clean, renewable source of crude oil. It intends to do this through the use of algae – tiny plants that grow in water (and grow quickly). The process is revolutionary, unlike any other method that is used to harvest algae. Manta Biofuel emphasizes that it farms algae, while other companies manufacture it. The product that is created with algae is comparably priced to normal crude oil barrels, all with net zero carbon emissions. 

Manta Biofuel plans on using a franchise system to expand its business, allowing farmers to purchase the company’s technology to make their own renewable crude oil. This plan is aimed at helping with scalability across the country.

Manta Biofuel has received an extremely high commendation from the United States Department of Energy, manifesting itself as a $2.2 million grant donation. The company has also already inked a deal to sell 240,000 gallons of their oil to the University of Maryland, accounting for a $1 million revenue opportunity.

Manta Biofuel’s current Republic raise has been rated a Top Deal by the KingsCrowd investment team.

Price

Manta Biofuel is raising at a $6 million valuation cap with a 25% discount. Given how revolutionary the technology is and how widely it could be used, this seems to be an extremely low valuation. Thus, Manta Biofuel’s price score is strong.

Market

Manta Biofuel operates within the (renewable) crude oil industry, which as a whole has a total available market of $2 trillion. It plans to start out by providing heating oil, which the EIA claims was used by 5.5 million households in the United States in 2018. This amounted to 3.6 billion gallons of total oil used to heat homes.

As Manta Biofuel continues to grow, it plans on entering the marine fuel and heavy industry market. With the growth in e-commerce and the buying of goods from China, shipping products back and forth on oil powered ships is a huge market that isn’t ready to leave oil behind. This represents a huge market opportunity for Manta. 

Finally, the company plans on being able to target refineries and large oil companies in order to break into the overall crude oil market. As companies slowly adopt the idea of carbon neutrality and mitigating their effect on the environment, Manta Biofuel is expertly positioning itself as an oil company with a decreased impact on our planet. This could lead the company to becoming an industry leader in the renewable crude oil market.

Manta Biofuel has formulated a savvy and logical approach to entering the renewable crude oil market. This well-formulated plan is reflected in the company’s extremely high market score.

Team

One of Manta Biofuel’s founders, Ryan Powell, has a Ph.D in algal biofuels from the University of Maryland. He has real life experience with large scale agriculture, growing up working on his family’s 2,000-acre grain farm. The other founder is Onur Unal, who oversees the business and fundraising. Unal is a seasoned entrepreneur, with over 15 years in the biotechnology industry.

Powell’s real life agriculture experience and his academic knowledge of renewable algae make him well suited to lead a company like Manta Biofuel. Add in Unal’s entrepreneurial background, and there is a very good duo heading this renewable crude oil company. Manta Biofuel’s team score is strong due to this well-paired founding team.

Differentiators

The tech that Manta Biofuel brings to the renewable crude oil industry is nothing short of revolutionary. Using algae to make oil is already a forward-thinking idea, but Manta Biofuel takes it one step further by innovating within this already niche space. The company’s patented approach to harvesting the algae is inspired by agriculture – naturally growing the algae and collecting it with Manta Biofuel’s own magnetic harvesting machine. This process has been tested and has shown it has the ability to harvest over 200,000 gallons of algae per day.

Manta Biofuel is a company that provides a carbon neutral, renewable way of obtaining oil – both descriptors that are vastly different from other oil companies. Although one could argue that Manta will have to compete with more traditional oil producers, the differentiator of producing renewable oil sets the company apart. There is some risk of future competitors in the renewable energy sector, but Manta Biofuel seems to have a first mover advantage at this time. Thus, the company’s differentiators score — like its market score — is near perfect.

Performance

Thus far, Manta Biofuel’s operations have garnered them much support and interest from third-party entities. The Department of Energy has given $2.2 million in grants to the company. It has been selected by the Maryland Energy Innovation Accelerator for two cleantech programs and was a finalist for the Department of Energy Clean Energy Challenge. Manta’s third party successes date all the way back to 2015, when the Chesapeake Bay Seed Capital Fund awarded the company a $150,000 investment.

As for the financial performance, there is much room for growth for Manta Biofuel. It has managed to run at a slight profit, and that’s before any government given subsidies for their carbon neutrality. As the company continues to grow, profitability prospects are looking very good. Manta Biofuel’s high performance score reflects both these early successes and its promising path to profitability.

Bearish Outlook

The goals that Manta Biofuel has for itself are lofty – and a failure to procure enough funding could leave it struggling or failing (the company itself says, “If we are not able to raise sufficient capital in the future, we may not be able to execute our business plan, our continued operations will be in jeopardy…”). Beyond this, the manufacturing of its products is dealt with by external companies, and any delay or malfunction in product could lead to a downturn of trust against Manta Biofuel. It must continue to scale efficiently if it hopes to grow into a company with a sizable stake of the oil industry.

On top of these internal potential problems, the continuing drop in oil prices is also a concern. Global oil demand is set to drop 9.3 mb/d (millions of barrels per day) due to COVID-19.

Bullish Outlook

The world continues to make a push towards renewable energy. In 2020, electric vehicle stocks have shot up (such as Nio, Xpeng, Tesla, etc.). Solar and wind stocks have also followed suit (ETFs ICLN and TAN). The market has been rewarding companies who have a green outlook (environmentally speaking), and Manta Biofuel fits within that umbrella.

The technology the company brings to the table is revolutionary – providing comparably priced crude oil with a net zero emission of carbon into the atmosphere. The Department of Energy seems convinced that Manta Biofuel is a company worth watching, as they’ve given multiple grants to the company. Manta Biofuel is still very early in its development, but with a shift towards renewables and the revolutionary renewable oil technology it brings to the table, it looks well positioned to grow exponentially. Additionally, the low valuation on this raise makes this an excellent opportunity for investors to get in on a promising startup with a very reasonable price.

Executive Summary

The technology of Manta Biofuel is industry-changing, and the company’s ROI appears to have the potential to be extremely promising as well. The company’s franchise model provides great opportunity for growth, and its revolutionary process is patented and carbon neutral. Manta Biofuel looks poised to become a major mover in the renewable crude oil industry. This raise represents an exciting chance for investors to participate in an early-stage investing round of a promising cleantech company. Therefore, Manta Biofuel has been rated a Top Deal.  

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com

Analysis written by Ethan Thomas.

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