Resonado Labs is offering a non-discounted SAFE subject to a $12 million pre-money valuation. Given the early traction that Resonado Labs has generated, this is fairly high, but not necessarily unreasonable. As such, the price score for Resonado is slightly above average.

When it comes to market opportunity, Resonado Labs fares a bit better. According to one source, the global speaker market in 2020 was worth $29.7 billion. By 2027, this is expected to grow to $83.2 billion, implying an annualized growth rate of 15.8%. The wired segment of this market should grow over this time frame at a rate of about 14.2%, taking it up to $32.9 billion by the end of our forecast period. At present, The US is a major player with a market share of nearly 27% — $8 billion in total. In truth, the speaker market is fairly small. It is also likely low margin in nature due to manufacturing, marketing, and supply chain needs. However, the industry is growing quite rapidly, and the licensing piece of the pie would be higher margin in nature. Because of these factors, Resonado Labs scores moderately in the market metric.

The weakest category for Resonado Labs is its team. At the top of the company Is co-founder and CEO Brian Cho. Cho has no documented work experience prior to founding Resonado, except for with the Republic of Korea army where he served as a Sergeant and a weapons specialist. Besides that, his only credential is a bachelor’s degree in business administration with a concentration in finance from the University of Notre Dame. 

Next in line is Peter Moeckel. He is the company’s second co-founder, as well as its COO. Moeckel has worked as a research analyst at O’Shaughnessy Asset Management where he focused on analyzing REITs. Before that, he was a business development employee at Gooroo, an education technology startup. 

Resonado’s final co-founder is CMO Erikc Perez-Perez. Perez-Perez has worked as a lead consultant at Paleta Consulting, a startup that provided consulting services to other firms. He also worked as a leasing agent at Coldwell Banker Residential Brokerage for a brief period. 

Resonado’s co-founders are young professionals, with limited past experience. All three hold degrees in business administration from Notre Dame, indicating little-to-no technical expertise among them. Thus, the team score for Resonado Labs is middling.

When it comes to differentiation, it’s difficult to rate Resonado Labs. Speakers are a dime a dozen, and it’s a space that tends to be very low margin in nature. However, Resonado does seem to have improved on traditional speaker technology. It has secured patents for its slim design speakers, and the company does have its first product rolling out soon. While Resonado is not the first to create a flat speaker, its technology does seem to have better functionality or cost than many current flat speakers. Balancing the presence of strong competitors against patents and new technology, Resonado Labs scores above average in the differentiators metric.

Resonado Labs is excelling when it comes to performance. In 2019, the business generated just $15,918 in revenue. This figure surged to $119,245 in 2020. Cash flow figures were not provided by management, but we do know that the company’s net loss in 2019 totaled $674,771. Unfortunately, this surged to $1.10 million in 2020. Beyond financials, Resonado is experiencing traction in other areas as well. For instance, it plans to launch one of its models in Airstream’s 2022 Touring Coach model line of RV. That shows a great deal of confidence from at least one potentially large client, and more could follow. Therefore, the performance score for Resonado Labs is its highest across all five metrics.

One thing that does seem to be a positive regarding the company is that its risk profile is fairly low. Only a few risk categories are currently elevated. One of these was the investment terms, due to the slightly high valuation of the company and absence of any discount upon conversion. Another risk is time risk. Resonado is facing a recovering economy while operating in a legacy industry. It will need to gain success quickly in order to provide a return for its investors. Finally, there is the funding risk. This relates to the prospect of the company actually getting funded, as well as whether funding will be an issue for the business moving forward. With such significant net losses and no guarantee that the company can trim them, it remains to be seen whether the capital Resonado hopes to raise will be enough to keep it moving forward.

When looking at the business as a whole, there are some negatives that investors need to be cognizant of. Revenue is still limited, and the team is not particularly experienced or qualified. The speaker industry is also not particularly large, which means the company will need to secure a significant portion in order to find success. There’s also the fact that this is a fairly low margin space to be in, so pursuing licensing will only generate so much upside for the firm.

On the bullish side of the equation, though, there are some positives to keep in mind. The company’s traction so far has been impressive. Revenue is growing nicely, and the business already has partnerships underway. If it can continue to secure new partners and maintain its positive momentum, Resonado could grow to be a major speaker supplier for multiple industries. The speaker market, while small, is slated to grow rapidly. Additionally, the overall risk profile for Resonado is encouragingly low, indicating that the startup has created a stable business model based on a promising product.

Resonado Labs has developed a patented flat speaker that is small and slim without sacrificing audio quality. Its technology has the potential to expand the uses for speakers, particularly in the realm of miniaturization. Resonado’s revenue is growing at an encouraging pace, as is the speaker market as a whole. The company’s decision to go with a royalty model that’s based on licensing should improve margins and better enable the company to grow further. Because of all of these factors, Resonado Labs is a Deal to Watch.  

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

Analysis written by Daniel Jones.