BMJ Score: 3
Quick Summary28 Investors read this
CommentaryThe auto industry is big. It’s lumbering. Most of all, it’s s-l-o-w to adapt, if only because its planning and production cycles are soooo long and complex. We have, however, seen lots of indications that the auto industry is embracing the blockchain for things like data sharing, ride sharing, car sharing, toll-tracking, and even usage-based insurance. When it comes to buying and selling cars, though, well, not so much. Autobay could be a better way for enabling transactions between private parties -- buying a used car based on a Craigslist ad. But this is also a demographic likely to lag, not lead.
- How to invest: Register on the Autobay website. Those contributors who apply to the Whitelist as Early Birds will earn a 2.5% extra bonus when contributing during the presale. Accepted forms of payment are BTC and ETH.
- Discount: 37% bonus throughout the pre-sale
- Eligibility: Residents of the U.S. or the People’s Republic of China are not allowed to participate.
- Problem addressed/solved: For the last 100 years, the process of buying a vehicle has been fairly consistent, and, by today’s standards, it’s an outdated and insecure process. Buyers often have to carry around large amounts of fiat currency, struggle to find their desired vehicle from private owners, and then hope that the seller of the vehicle is reliable throughout the transaction. Losing money, payment fraud, and time loss are part of the risks involved in cash payments.
- Target customers/customer/ segments/verticals: AutoBay wants to target a massive industry that has millions of customers. They want to change the way car buying is done, so their target market really revolves around anyone purchasing/selling a vehicle, particularly among private parties. Our concern is that this market is just too broad. Realistically, location will matter, and there are multiple car markets to consider, both nationally and internationally. To put it mildly, this is an ambitious target.
- Value creation: AutoBay creates value in a number of ways, including: solving the problem of transferring large sums of money for vehicle purchases; simplifying safe and secure vehicle purchases; giving sellers a larger market beyond regional auctions for vehicle sales; using smart contracts to verify transactions, speed payments, and lower costs; allowing secure data exchange and ensuring data integrity and identity management. Added value to investors includes the chance to win a Lamborghini and the ability to purchase tokens at a discounted price and later use them to purchase vehicles at a higher value.
- AutoBay will face heavy competition, not only from competing blockchain companies but also from established platforms like TrueCar, Cars.com, AutoTempest, etc. AutoBay knows other blockchain projects like TrustedCars and Bitcar will give them issues, so AutoBay cleverly made a chart on their website showing how their project has significant advantages over others.
- Market size/potential: The motor vehicle industry stands as one of the largest in the world with an estimated $3 trillion dollar value. The market has also seen an increase in ecommerce sales due to the internet and subsequent buy/sell platforms. The industry is quickly becoming one of the most sought-after industries for blockchain. According to Frost and Sullivan, 15% of connected vehicle transactions are expected to be on the blockchain by 2025. Major car brands are looking at multiple use cases for blockchain tech, including secure data sharing, rideshare transactions, usage-based insurance, car ewallets to handle tolls and car sharing, etc. One interesting use case for AutoBay is to have a vehicle’s maintenance and sale history on the blockchain because it will allow buyers and sellers to have access to more transparent information of a vehicle’s lifecycle.
- Regulatory risks: There will be many risks of international and domestic compliance issues in an increasingly complicated regulatory environment such as the automotive industry. AutoBay will have to ensure to abide by the security and information protection standards seen in GDPR regulations, PCI, and SOX, as well as to manage warranty, regulatory, and commercial litigation risks.
- AutoBay will enter a massive market that has no shortage of customers, but focusing on too broad a market might be a downside. The question will be whether they can influence buyers/sellers to use their product rather than non-blockchain and blockchain-based alternatives. The competition will play a factor in their journey, so they’ll have to definitely set themselves apart in order to compete in this saturated market. Lastly, they’re certainly solving a problem, but it’s difficult to say whether or not that problem negatively affects people as much as AutoBay claims it does. 2.5
- Investor value: Using ABX tokens garners users a discount on the AutoBay platform. However, users can still transact with BTC or ETH. This means that the demand for ABX will be stifled since it’s not absolutely necessary to function on the platform. ABX will derive its value from the demand it generates via enticing discounts or promotions.
- Disclosures: AutoBay provides loads of information about their company in creative ways, ensuring that their level of transparency is obvious at first sight. They have a video presentation that explains their value proposition simply, dedicated MVP page, a detailed roadmap that indicates the plan to launch the platform in Q4, and a list of ways to contact them including email and telephone.
- Token distribution: 54% ICO, 30% fund prevision, 9% team, 4% bounties/rewards, 3% advisors/experts.
- Use of proceeds: 40% operating expenses; 34% marketing; 10% new products; 8% legal, taxes, corp fees; 4% miscellaneous expenses.
- Caps: While there is no indication of a soft cap, the hard cap is set for $24 million USD.
- AutoBay does a great job in keeping transparent with its project and its subsequent operations. Only 9% of the tokens go toward the team, which shows they care more about the success of the project rather than their own economic benefit. Having said that, owning ABX tokens might not bring investors the value they might expect from other projects considering coins like BTC and ETH can also be used on the platform. 3.0
- Track record: Many members of the AutoBay team have prior experience working at major companies that are recognizable to the common investor. For example, Lucas Taylor (CTO) previously worked for PlayStation while Strategic Advisor Luciano Hertzriken currently serves as Santander’s Director of Operations in Madrid. The CEO, Alejo Serrano, has prior entrepreneurial experience stemming from his previous start-up icWall.
- Integrity: Most of the AutoBay team has yet to reach the midpoint of their professional careers, but they show promise in their level of transparency and openness on the website. It’s clear they want to associate themselves with AutoBay due to the YouTube videos of the team testing the MVP and talking about upcoming milestones. Now it’s a question as to whether or not they have the capacity/knowledge to carry out this project.
- The AutoBay team is a mixed bag. They lack international experience as well as blockchain technology expertise. That said, they offer transparency and innovative ways to share information about their project, and it seems clear that the team is passionate about bringing their vision to fruition. 3.0
- Alejo Serrano, CEO & Co-Founder (LinkedIn)
- Prof. Sofia Serrano, CFO & Co-Founder (LinkedIn)
- Lucas Taylor, CTO (LinkedIn)
- MVP: AutoBay has a working MVP as of June 7th. They have a link on their website demonstrating the functionality of the MVP. The AutoBay app is also available on the Apple Store and Google Play.
- Token use case: An ECR20 Token, the ABX Token will create a smart contract between two parties, which will outline the model, year, price, and other information as specified by the buyer and seller. Tokens will be used both as a payment method between parties and a payment method for the “gas” used to create the blocks in the Ethereum blockchain.
- Value-added: Paying with ABX will offer users and companies a discount over Bitcoin (BTC) and Ethereum (ETH), benefiting users for having more competitive prices and creating a higher utility for ABX Tokens.
- Decentralization: Autobay appears to be the first decentralized e-commerce platform to buy, sell, and auction any vehicle with cryptocurrency.
- Token Supply: Max token supply of 945 million ABX.
- AutoBay has a specific page on their site describing their MVP and showing how it works. Its comprehensive explanation allows investors to see the progress the project has already made. In terms of the ABX token, it appears that it’s not required, but instead just provides a discount on transactions, which could negatively impact demand for the token. 3.0
- Technical difficulty/investment expertise needed: The concept of AutoBay is basic and to the point. They’re creating a decentralized platform to buy, sell, and auction cars with cryptocurrency.
- Halo effect: AutoBay has partnered with a local Ford dealership and a few other ICO projects that they hope will help them in their own efforts.
- Buzz: AutoBay has decent buzz surrounding it according to buzzsumo. They also have over 25,000 followers on Facebook and an additional 5,700 on Twitter. Furthermore, they list a whopping 21 examples of press coverage on their site. AutoBay markets their product effectively with pictures of foreign sports cars to get people excited about their company
- AutoBay has a solid amount of buzz for their ICO, and having a major brand name like Ford on their website doesn’t hurt either. Their promotion and marketing team does a terrific job using sports cars and high-quality videos to garner interest for the project. It’s also super easy to understand their project. 4.0