Is Graze a good investment?
/Described as the “The Tesla of Agriculture” and the Roomba for commercial lawncare, Graze is the most recent robotics stock investment opportunity to catch our attention at Money & Mimosas.
Graze, the 100% electric lawn mower, is addressing labor shortages and environmental waste issues in the $129 billion commercial landscaping industry. To date, Graze has raised over $14.7 million from more than 9,300 investors.
And now, you have the opportunity to invest in this rising startup through Graze’s equity crowdfunding raise. But, is buying Graze stock worth the risk? Keep reading to decide for yourself.
About Graze
Graze, also referred to as Graze Robotics, Graze Mowing, and Graze Mower, currently manufactures the world’s only commercial-size autonomous mower. It is a solar-powered, self-driving mower and is reported to be able to cut fuel costs by 75%, cut traditional labor costs associated with mowing by 50%, and increase profit margins by 5x.
The mower is designed specifically for golf courses, country clubs, and the landscaping companies that service them.
Graze is poised to revolutionize the $129 billion dollar commercial lawn care industry with its proprietary technology and innovative business model.
Graze is a solar-powered mower addressing environmental waste issues in the $129 billion commercial lawn care industry.
Tech investments in commercial landscaping
As an investor, it’s necessary to understand the industry before diving in with your dollars. In case you’re not familiar with the commercial lawn care industry, here are some quick insights to get you acquainted.
Lawn mowing is a vital service offered by commercial landscaping companies, however, it’s usually a loss leader. Lawn mowing has a 10 percent profit margin, at best. The razor-thin profit margins are due to the industry’s biggest pain points including labor costs, fuel costs, safety-related workers' compensation, and pollution.
Labor costs can account for 45% of gross revenue. Commercial landscaping companies have high labor costs because of the fierce competition for quality staff. On top of labor costs are the exorbitant fuel costs. Mowers consume about 1.2 billion gallons of gasoline annually, and commercial mowers consume more than 100 million gallons of diesel annually. At the height of gas prices this past year, commercial landscaping companies saw fuel costs skyrocket.
Safety-related workers’ compensation is also costly. Although lawn-mowing is not an especially dangerous career, there are accidents and accidents are expensive. For example, Graze cites one of its potential clients as having roughly $100,000 in safety-related workers comp payouts in 2018.
Another cost is pollution. Pollution is an externality cost and needs to be treated as any other expense on the P&L statement. Lawnmowers are major contributors to pollution and global warming. There are multiple studies detailing how lawnmowers are as harmful as gas-powered cars. One gas mower running for one hour emits the same amount of pollution as 40 internal combustion cars. 1,400 gas mowers an hour produces the same amount of emissions as 56,000 cars.
Graze’s innovative design addresses all of these pain points. The result is lower fuel costs, reduced carbon emissions, increased efficiencies, and improved safety measures.
Graze stock is green technology
Graze is powered by electric and solar panel technology. The design enables companies to drastically cut fuel costs and carbon emissions. Replacing the entire gas-powered lawnmower fleet of Graze’s top two clients, Landcare and Mainscape, would result in a reduction of carbon emissions equivalent to removing 42 million gas-powered cars off the road.
Additionally, Graze’s equipment is whisper quiet which means commercial lawncare companies can run them at night. A major win for the environment.
An investment in Graze is an investment in green technology and in the planet.
Is Graze a good investment?
If you’re wondering, “should I invest in Graze?”, at Money & Mimosas we encourage you to ask yourself three questions:
What are the potential roadblocks?
What is the potential growth or upside?
How does this align with my values and/or overall investment strategy?
The biggest roadblock we see is sales contract fulfillment. Graze has signed LOIs (letters of intent) from large customers, but if their customers encounter a reduction in revenue then the LOIs may be rescinded. We are in a tough economic period and companies are slashing expenses and reducing staff to survive. Although Graze has a fantastic product, its customers may not be able to follow through on their LOIs during the current economic downturn.
With that stated, there are many potential upsides and huge growth potential.
Firstly, the Graze business model is innovative. Graze is both a hardware and a software company. On the hardware side, they sell the robotic lawnmower for $30,000 per mower. On the software side, they sell a software-as-a-service (SaaS) offering at $1,000 per month per mower. That service is necessary to keep the mower up-to-date and functioning. The software side allows for recurring revenue. As we say at Money & Mimosas, cash is king, but cash flow is queen. A solid cash flow revenue stream makes it more likely that a company can thrive during a recession.
Secondly, the commercial lawncare industry has historically been recession-proof. There are approximately 13 million commercial lawnmowers in the U.S. and annual sales volumes hover around 300,000 units. Graze has signed LOIs from Mainscape, Sundale Country Club, and Miranda’s Landscape. Graze also has terms with the city of Glendale and Pasadena. Government contracts are usually a very reliable source of revenue. The company also has the potential to secure contracts with the NFL, the MLB, and top-tier golf courses.
We are also impressed by Graze’s leadership experience. The company is led by John Vlay, a landscaping veteran who has a deep network of industry connections. These connections helped Graze to secure $36 million in preorders from landscapers and country clubs.
Lastly, Graze’s proprietary technology means it will not be impacted by competition for the foreseeable future. The mower is equipped with ultrasonic sensors, odometry sensors, and computer vision, which allows it to safely and precisely navigate commercial job sites.
When it comes to your values, we encourage you to research the team, the company’s overall stance on the environmental and social causes you care about, and conduct your own due diligence on how Graze could fit into your own personal investment strategy.
How to invest in Graze stock
Graze is currently offering shares at $7.10. The minimum investment is $1,001.40.
The process of investing is really easy. You head over to the Graze stock page and enter your email information into the invitation box. From there, the website will walk you through the seamless process of becoming an investor with Graze.
Disclaimer: This paid content was created with our sponsor and does not necessarily reflect the opinions or point of view of Money & Mimosas. Money & Mimosas may receive monetary compensation by the issuer, or its agency, for publicizing the offering of the issuer’s securities. Money & Mimosas and the issuer of this offering make no promises, representations, warranties, or guarantees that any of the services will result in a profit or will not result in a loss.
An Offering Statement Regarding This Offering Has Been Filed With The SEC. The SEC Has Qualified That Offering Statement, Which Only Means That The Company May Make Sales Of The Securities Described By The Offering Statement. It Does Not Mean That The SEC Has Approved, Passed Upon The Merits Or Passed Upon The Precision Or Completed Of The Information In The Offering Statement. The Offering Circular That Is Part Of That Offering Statement Is At: Graze
