BMJ Score: 4
Quick Summary20 Investors read this
CommentaryThe construction industry is a $600 billion dollar market, and while materials such as concrete continue to be essential for creating everything from skyscrapers to preventing floods, concrete has not evolved much since 600 AD when it was first discovered. XMaterials has created patent pending technology through AI and machine learning to create replacements for traditional materials such as concrete, granite, marble, and ceramics. First, their algorithm analyzes the optimal combinations of over a dozen natural materials to create new solutions that are stronger, more affordable, faster, longer lasting, and more eco-friendly. Their DigiLab also provides geolocation for material availability to ultimately find the best combination of raw materials based on end user budget, location, material need, and aesthetics. Next, they have a platform called HyperCon which is a machine learning platform that automates the entire production line process of mixing, casting, drying, and packing the products via smart robots. The team behind this project is solid, with good experience. The company is formed from an already existing parent organization that has generated $2 billion this past year in revenue. Their whitepaper is thorough, and what we really find unique here is the token model and use of blockchain. XMaterials realizes that they cannot satisfy the demand for the industry so they have decided to create a franchise model that will allow franchisees to pay their fees in XMAT tokens and receive a huge 25% discount. They will also enable token holders to receive dividends of 15% of the total profit generated by this project. The discount is so large that it almost guarantees demand for the token. We think this is a very unique and interesting project, and look forward to seeing how the team progresses. The one area that can use improvement would be marketing. This is a very niche space and the project could use a targeted approach for generating buzz.
- How to invest: Purchasers must first register on the main website (www.XMAT.io) and complete the whitelisting procedure for the presale or public sale phases of the Token Launch.
- Discount: 20% 10/15/2018, 15% 11/05/2018, and 10% 11/25/2018
- Eligibility: The XMaterials presale and public sale are only open to non-US citizens and non-US permanent residents, non-China citizens, and non-Indian citizens. You do not have to be an institutional or private investor to participate; the presale does not have minimum contribution requirements.
- Token Price: 1 XMAT token is priced at $0.105 in USD excluding the bonus
- Jurisdiction: Cayman Islands
- Problem addressed/solved: XMaterials wants to fix issues surrounding the building materials industry.
- Target customers/customer/ segments/verticals: The target market of XMaterials Holdings’ franchise model is any producer aiming to deliver products similar to: precast concrete products, ceramic products, cast stone, granite, and marble. By participating in the franchise model, XMaterials Holdings grants the franchisee access to its technology package: DigiLab Pro, HyperCon, and the Blueprint. The franchisee would have the ability to produce the exact same materials XMaterials does, thereby revolutionizing their product lines.
- Value creation: XMaterials is using patent-pending, AI-generated recipes and machine-learning robots to create the next generation of building materials. The XMaterials platform can reduce the manual labor required through this process to just 16% of the current labor. The raw materials produced will be stronger, more eco-friendly, faster to produce, longer lasting, and more affordable.
- Competition: The XMaterials Platform’s existing and potential competitors include, but are not limited to, companies that operate, or could develop similar mobile applications and websites. These companies could devote greater technical and other resources than XMaterials Holdings has available, have a more accelerated timeframe for deployment, and leverage their existing user bases and proprietary technologies to provide products and services that users might view as superior to the XMaterials Platform’s offerings.
- Market size/potential: What is the most widely used construction material in the world? Concrete. Over 4 billion tons of concrete are produced annually for an estimated market of more than US$300 billion. Concrete as a building material may encompass a substantial amount of the construction market, but ceramics generates a substantial amount of revenue as well. Grand View Research predicts that the ceramics industry will be worth US$287 billion by 2022. XMaterials has created a method for developing superior products for these two massive industries among others (granite and marble).
- Regulatory risks: The project must take steps to ensure their pending patents come through.
- Investor value: A few benefits of holding the XMAT token include the distribution of profits payable to anyone who holds XMAT in their wallet. Token holders who decide to become franchisees will have the option of purchasing an XMaterials franchise using their Tokens at a 25% discount. Other than that, XMAT holders will want the number of franchises on the XMaterials platform to explode in order to generate the demand required to push the token value to the next level.
- Disclosures: There is a lengthy 60-page whitepaper that’s jam packed with details on the business model, token structure, roadmap, and more. The team bios also go into intense background information on each member. The only “unnecessary” item they provide would have to be the revenue projections. It’s almost impossible for blockchain startups to legitimately forecast earnings as they either have not had any yet or are entering a brand new market where demand is completely unknown.
- Token distribution: 84% ICO, 8% team, 5% treasury, and 3% advisors.
- Use of proceeds: 36% machine and equipment, 22% buildings and infrastructure, 17% hypercon marketing and development, 13% research and development, 10% commercial offices, 1% digilab marketing and development, and 1% listing on exchanges.
- Caps: Soft cap: $1.61 million USD; Hard cap: No indication of a hard cap.
- Track record: After analyzing the XMateriels team, one thing is certain - they have decades of experience as most members appear over the age of 40. Some investors may find more experienced professionals to be more trustworthy and qualified, but in terms of blockchain projects, seeing youth on a team often means there’s innovation, creativity, and drive. Having said that, the fact that the XMaterials team is older takes nothing away from their experience and accomplishments. Svetlin Savov (CEO) has over 20 years of work experience and is an expert in the field of economics. Svetlin worked for over seven years as the CEO of Zavodski Stroezhi – Devnya AD, where he honed his skills in business process and accounting. On top of that, the CBDO, Todor Totev speaks his native Bulgarian and is proficient in English, German, Russian, and Spanish as well. He is skilled in all Microsoft software systems, Lotus Notes, and the design and drafting software AutoCAD.
- Integrity: XMaterials checks all the boxes in terms of its team’s qualifications and experience. The project also gives lengthy explanations with precise detail regarding the backgrounds of each individual team member. Although most members have less than 300 connections on LinkedIn, they still attached their profiles to the main site. This may seem insignificant, but it shows that they want to represent themselves online no matter how few followers they have. Some projects would sooner omit subpar LinkedIn profiles than actually post them on the site.
- Svetlin Savov, CEO (LinkedIn)
- Mihail Kamburov, Communications Advisor (LinkedIn)
- Horst Siewert, Chief Production Technology Office (LinkedIn)
- MVP: As of the writing of the whitepaper, Intellihouse LTD has completed its first module and has a fully functional factory and a list of active clients. Having said that, the franchise model, which is the essence of their ICO and blockchain platform, will be built using the funds raised through the ICO.
- Token use case: The XMAT token will be used in two ways: 1) for every cubic meter of materials produced by any of the XMAT franchises, XMaterials will take a royalty and use that for the dividends it gives to token holders. 2) Franchisees can pay their fees in XMAT tokens and receive a huge 25% discount.
- Value-added: Token holders will receive dividends from 15% of the total profit generated by this project, which is the most value that XMAT really provides for this project. It doesn’t have many other functions other than the discount to franchisees. Having said that, the discount is so large that it almost guarantees that each franchisee will use it for their payments.
- Decentralization: Using the blockchain technology and network and the capabilities of DigiLab, XMaterials will make the research, development, and trading more transparent, democratic, and decentralized in the building industry.
- Token Supply: Max token supply at 1.4 billion XMAT
- Technical difficulty/investment expertise needed: The XMaterials project is not your typical ICO. They’re attempting to use AI to create a better system for identifying the strongest and longest lasting building materials. The process is complicated, but XMaterials has a solid instructional video that breaks down the project at the following link. In order to truly understand this project, you’ll almost certainly need to watch the instructional video.
- Halo effect: XMaterials has a list of its business partners on the main site, but most are small advisory companies that very few people would recognize. A few of these foreign companies include Solvay, Devnya Cement, Minerali Industriali, and Quarzwerke Gruppe. It’s encouraging to see so many partners, but none of them give that added benefit of brand recognition like an IBM or Google partnership.
- Buzz: The XMaterials social media accounts definitely need some more action. Their total following between Facebook, Twitter, and YouTube is less than 400. Plus, their Telegram account appears to be having issues as the link doesn’t even work. We hope XMaterials plans on putting some funds towards marketing to generate some sort of buzz around the project.