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Rumbleon Inc. IPO

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Attention Harley-Davidson hogs everywhere, Rumbleon is out to make buying and selling a lot easier. With their “unique online platform” and “dealer partner relations”, Rumbleon wants to be the True Car of the motorcycle industry. That is how they see themselves. Here are the details.

Rumbleon aims to operate a capital light disruptive e-commerce platform facilitating the ability of both consumers and dealers to Buy-Sell-Trade-Finance pre-owned motorcycles. Their initial focus is the market for 650cc and larger on-road motorcycle brands, particularly those concentrated in the “Harley-Davidson” brand.

Rumbleon serves both consumers and dealers. Cash offers are made for the purchase of vehicles and sellers are provided with the flexibility to trade, list, or auction their vehicle through the Rumbleon website and mobile applications.

The goal is to transform the way motorcycles and other recreational vehicles are bought and sold by providing users with the most efficient, timely and transparent transaction experience.

Acquisition of NextGen Dealer Solutions

In February 2017, Rumbleon acquired the assets of NextGen Dealer Solutions, LLC, which is expected to drive the company’s business model from this point forward.

The NextGen Dealer Solution software provides integrated vehicle appraisal, inventory management, customer relationship and lead management, equity mining, and other key services necessary to drive the online marketplace.

Rumbleon founders are creating a comprehensive online buying and selling experience with a vertically integrated supply chain that allows them to buy and sell high quality vehicles to consumers and dealer partners transparently and efficiently at a value-oriented price.

The way Rumbleon sees it, using the website or mobile application, consumers and dealers can complete all phases of a used vehicle transaction including: (1) selling a vehicle, (2) listing a vehicle, (3) purchase a used vehicle; (4) finance a purchase.

Once all the bugs are ironed out, Rumbleon plans to extend listings to additional recreational vehicle types like ATVs, personal watercraft, snowmobiles, side-by-sides, boats, and both towable and motor coach RVs.

Financials: Starting With $5 Million in Equity

Rumbleon is something close to a startup company. Founded in September 2016, the company sports just $155, 411 in revenues that so far have resulted in a $2.8 million loss. Even so this balance sheet shows $5 million in equity. That is most unusual for a young company like Rumbleon. The obvious implication here is that Rumbleon has already found some deep pocket investors to absorb a big chunk of the startup risks.

Use Of Proceeds: Needs Clarification

On September 1, 2017, the company filed an S-1 with the notion of rising
$23 million in new equity. Will their so-called unique software platform and business model be attractive to investor’s remains to be seen? One bit of advise for young companies like Rumbleon, the more details you provide the investor the better are your chances for success. Their use of proceeds statements is a masterwork of vagueness.

“We will retain broad discretion over the use of the net proceeds of this offering. We currently intend to use the net proceeds of this offering for working capital and general corporate purposes, which may include purchases of additional inventory held for sale, increased spending on marketing and advertising and capital expenditures necessary to grow the business. “

“The net proceeds received by us may be used for other purposes that our Board or management deem to be in our best interest. This expected use of proceeds represents our intentions based on current plans and business conditions. Thus, as of the date of this prospectus and except as explicitly set forth herein, we cannot specify with certainty all of the particular uses”.

Management

Rumbleon’s use of proceeds statement is not all that different than other startup companies these days. But as long as investors are risking their capital, it is nice to know how management is spending it. Vagueness can quickly create to suspicion.

It needs to be noted that management includes founder Marshall Chasrown who LinkedIn bio includes 14 months as CEO of Auto America, a local North Carolina used car dealership. In 2013 Marshall Chasrown filed a $72 million bankruptcy.
Fire up your engines for Rumbleon.