ICO Analysis: carVertical

The aftermarket car industry is large, with the size of the U.S. market alone expected to reach $284 billion in 2018. When it comes to carVertical, the overall model is to use ICO funds for a five-year runway to see if this product is applicable in the marketplace. The organization still needs to build four products to make this data-driven engine work. As the company states,

“Producing car’s history blockchain registry will enable our team to build four different products which will fully utilize blockchain technology, the token of our company, and will be the core elements of a stable cash flow.”

Now, let’s dive into the project info provided in the whitepaper.

Data Access: “Trusted sources” – these have been identified by carVertical but does not include any roadmap to partnerships or timeframe to gaining access to these integral datasets.

Vehicle owner only accessible data – this is making a big leap on a small market target. The average car owner has no idea what cryptocurrency is or how it works, so if a main piece of the puzzle is to onboard individuals to volunteer their data in exchange for tokens, there will most likely be a long learning curve depending on the customer acquisition strategy (which is not listed).

The IoT Miners – I wonder how different will this be compared to the progressive OBD slot tracker launched 20 years ago that they use for safe driver discounting? Not a lot of info provided on this.

Product Features: Notifications feature is interesting as a car vertical can notify the user when there are maintenance issues when tires are due to be updated as well as insurance premiums that are due. This provides the user some real-world value by sharing their data with carVertical.

carVertical can then provide service provider recommendations through their marketplace for user convenience. The carVertical reports product sounds a lot like Carfax but claiming to have better data.

I found it interesting they provided a SWOT analysis for the business but there was no mention of how the organization is going to obtain customers? I find this the common plague of many blockchain startups they focus so much on building technology they are lacking customer segment and value prop alignment with an MVP they are selling. The milestone is 40,000 reports sold but with no go to market strategy to acquire those buyers? In reviewing the firm’s opportunities the market is ripe for innovation and data interoperability but they are not the only blockchain based car data company there is a very close competitor targeting slightly different markets called VinChain.

Token

carVertical is an ERC 20 token that allows users who share their data the ability to earn cV tokens. A person can earn cV by using carVertical.Wallet product. The person will earn a small amount of cV by downloading the carVertical.Wallet mobile application, confirming their identity with Civic identity verification blockchain, and confirming their car’s ownership with their country’s national car registry. Service or product providers will need to pay cV tokens (or other crypto or FIAT currency) for a possibility provided by carVertical to make offers (e.g. insurance offer) to the carVertical.Wallet users. A person or a company will be able to purchase a report about a particular car by using a cV token (or other crypto or FIAT currency).

Team

The core team looks to be heavy on the development side of the business. Most carry dev titles and boast mostly about technical expertise in their public profiles. On a development perspective, the organization looks to have a strong team in place but I am unsure how that will translate to product adoption or customer acquisition. There is no listed CEO of the organization just a few co-founders: with my experience in management consulting this is a red flag as governance structures help organizations manage the scaling post-funding. There have been a number of governance issues in blockchain startups over the last few years so just something to look out for. The organization looks to have a bevy of auto industry advisors listed on their website spanning Asia and the EU as well as designated country ambassadors. The needed industry experience will be an asset to carVertical post-ICO.

Verdict

Risks

• As stated in the whitepaper, the gathering of data may take up to two years, so fast adoption across markets may be an issue. –1

• The company was born in July 2017, which means this is still an idea phase organization without clear customer acquisition strategies mapped out. -1

• Lack of research support for blanket statements about the industry in the whitepaper *if you are going to make a - claim please provide proof) -1

Growth Potential

• The experience of the tech team looks strong and the organization has a working alpha at this time. + 2
  The lagging technology adoption in the auto industry especially in the aftermarket segment can produce a blue ocean strategy for the firm if executed correctly. +3

• The path to acquisition for a firm in this market could be fast if their tech works well and they hit revenue numbers faster than the timelines listed. I could see a major insurance firm adding this to their portfolio. + 2

• With few blockchain based competitors, but several off chain competitors, the strength of the data and customer experience will be the differentiators required, which I see as doable. +2

Disposition

Based on the above analysis, we arrive at a score of 6 out of 10 for carVertical. The project can be a viable solution in an industry that has lacked technology adoption around data interoperability. The hurdles will be gaining data point access to provide the granular results the project claims. If the project takes off I would assume acquisition would be an exit plan for the founders.

Investment Details

• Type: Crowdsale
• Symbol: cV
• Token Sale: Dec. 26, 2017 – April 15, 2018
• Platform: Ethereum
• Tokens Available Via ICO: 4.2 Billion
• Token Price: 1ETH = 240,000 cV

Source: Hacked