I’m publishing this series on LinkedIn called Colors to explore a topic that I care deeply about: the Renaissance Mind. I am just as passionate about entrepreneurship, technology, and business, as I...
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When startup founders review a VC term sheet, they are mostly only interested in the pre-money valuation and the board composition. They assume the rest of the language is “standard” and they don’t want to ruffle any feathers with their new VC partner by “nickel and diming the details.” But these details do matter.
VCs are savvy and experienced negotiators, and all of the language included in the term sheet is there because it is important to them. In the vast majority of cases, every benefit and protection a VC gets in a term sheet comes with some sort of loss or sacrifice on the part of the founders – either in transferring some control away from the founders to the VC, shifting risk from the VC to the founders, or providing economic benefits to the VC and away from the founders. And you probably have more leverage to get better terms than you may think. We are in an era of record levels of capital flowing into the venture industry and more and more firms targeting seed stage companies. This competition makes it harder for VCs to dictate terms the way they used to.
But like any negotiating partner, a VC will likely be evaluating how savvy you appear to be in approaching a proposed term sheet when deciding how hard they are going to push on terms. If the VC sees you as naïve or green, they can easily take advantage of that in negotiating beneficial terms for themselves. So what really matters when you are negotiating a term sheet? As a founder, you want to come out of the financing with as much overall control of the company and flexibility in shaping the future of the company as possible and as much of a share in the future economic prosperity of the company as possible. With these principles in mind, let’s take a look at four specific issues in a term sheet that are often overlooked by founders and company counsel:
What counts in pre-money capitalizationThe CEO common directorDrag-along provisionsLiquidation preference.
Cookie-cutter corporate housing turns people into worker drones. When an employee needs to move to a new city for a few months, they’re either stuck in bland, giant apartment complexes or Airbnbs meant for shorter stays. But Zeus lets any homeowner get paid to host white-collar transient labor. Through its managed ownership model, Zeus takes on all the furnishing, upkeep, and risk of filling the home while its landlords sit back earning cash.
Zeus has quietly risen to a $45 million revenue run rate from renting out 900 homes in 23 cities. That’s up 5X in a year thanks to Zeus’ 150 employees. With a 90 percent occupancy rate, it’s proven employers and their talent want more unique, trustworthy, well-equipped multi-month residences that actually make them feel at home.
Now while Airbnb is distracted with its upcoming IPO, Zeus has raised $24 million to steal the corporate housing market. That includes a previous $2.5 million seed round from Bowery, the new $11.5 million Series A led by Initialized Capital whose partner Garry Tan has joined Zeus’ board, and $10 million in debt to pay fixed costs like furniture. The plan is to roll up more homes, build better landlord portal software, and hammer out partnerships or in-house divisions for cleaning and furnishing.
“In the first decade out of school people used to have two jobs. Now it’s four jobs and it’s trending to five” says Zeus co-founder and CEO Kulveer Taggar. “We think in 10 years, these people won’t be buying furniture.” He imagines they’ll pay a premium for hand-holding in housing, which judging by the explosion in popularity of zero-friction on-demand services, seems like an accurate assessment of our lazy future. Meanwhile, Zeus aims to be “the quantum leap improvement in the experience of trying to rent out your home” where you just punch in your address plus some details and you’re cashing checks 10 days later.
“When I sold my first startup, I bought a home for my mom in Vancouver” Taggar recalls. It was payback for when she let him remortgage her old house while he was in college to buy a condo in Mumbai he’d rent out to earn money. “Despite not having much growing up, my mom was a travel agent and we got to travel a lot” which Taggar says inspired his goal to live nomadically in homes around the world. Zeus could let other live that dream.
Zeus co-founder and CEO Kulveer Taggar
After Oxford and working as an analyst at Deutsche Bank, Taggar built student marketplace Boso before moving to the United States. There, he co-founded auction tool Auctomatic with his cousin Harjeet Taggar and future Stripe co-founder Patrick Collison, went through Y Combinator, and sold it to Live Current Media for $5 million just 10 months later. That gave him the runway to gift a home to his mom and start tinkering on new ideas.
With Y Combinator’s backing again, Taggar started NFC-triggered task launcher Tagstand, which pivoted into app settings configurer Agent, which pivoted into automatic location sharing app Status. But when his co-founder Joe Wong had to move an hour south from San Francisco to Palo Alto, Taggar was dumbfounded by how distracting the process was. Listing and securing a new tenant was difficult, as was finding a medium-term rental without having to deal with exhorbitant prices or sketchy Cragislist. Having seen his former co-founder go on to great success with Stripe’s dead-simple payments integration, Taggar wanted to combine that vision with OpenDoor’s easy home sales to making renting or renting out a place instantaneous. That spawned Zeus.
To become a Zeus landlord, you just type in your address, how many bedrooms and bathrooms, and some aesthetic specs, and you get a monthly price quote for what you’ll be paid. Zeus comes in and does a 250-point quality assessment, collects floor plans, furnishes the property, and handles cleaning and maintenance. It works with partners like Helix mattresses, Parachute sheets, and Simple Human trash cans to get bulk rates. “We raised debt because we had these fixed investments into furniture. It’s not as dilutive as selling pure equity” Taggar explains.
Zeus quickly finds a tenant thanks to listings in Airbnb and relationships with employers like Darktrace and ZS Associates with lots of employees moving around. After passing background checks, tenants get digital lock codes and access to 24/7 support in case something doesn’t look right. The goal is to get someone sleeping there in just 10 days. “Traditional corporate housing is $10,000 a month in SF in the summer or at extended stay hotels. Airbnb isn’t well suited [for multi-month stays]. ” Taggar claims. “We’re about half the price of traditional corporate housing for a better product and a better experience.”
Zeus signs minimum two-year leases with landlords and tries to extend them to five years when possible. It gets one free month of rent as is standard for property managers, but doesn’t charge an additional rate. For example, Zeus might lease your home for $4,000 per month but gets the first month free, and rent it out for $5,000 so it earns $60,000 but pays you $44,000. That’s a tidy margin if Zeus can get homes filled fast and hold down its upkeep costs.
“Zeus has been instrumental for my company to start the process of re-location to the Bay Area and to host our visiting employees from abroad now that we are settled” writes Zeus client Meitre’s Luis Caviglia. “I particularly like the ‘hard truths’ featured in every property, and the support we have received when issues arose during our stays.”
There’s no shortage of competitors chasing this $18 billion market in the US alone. There are the old-school corporations and chains like Oakwood and Barbary Coast that typically rent out apartments from vast, generic complexes at steep rates. Stays over 30 days made up 15 percent of Airbnb’s business last year, but the platform wasn’t designed for peace-of-mind around long-term stays. There are pure marketplaces like UrbanDoor that don’t always take care of everything for the landlord or provide consistent tenant experiences. And then there are direct competitors like $130 million-funded Sonder, $66 million-funded Domio, recently GV-backed 2nd Address, and European entants like MagicStay, AtHomeHotel, and Homelike.
Zeus’ property unit growth
There’s plenty of pie, though. With 330,000 housing units in SF alone, Zeus has plenty of room to grow. The rise of remote work means companies whose employee typically didn’t relocate may now need to bring in distant workers for a multi-month sprint. A recession could make companies more expense-cautious, leading them to rethink putting up staffers in hotels for months on end. Regulatory red tape and taxes could scare landlords away from short-term rentals and towards coprorate housing. And the need to expand into new businesses could tempt the big vacation rental platforms like Airbnb to make acquisitions in the space — or try to crush Zeus.
Winners will be determined in part by who has the widest and cheapest selection of properties, but also by which makes people most comfortable in a new city. That’s why Taggar is taking a cue from WeWork by trying to arrange more community events for its tenants. Often in need of friends, Zeus could become a favorite by helping people feel part of a neighborhood rather than a faceless inmate in a massive apartment block or hotel. That gives Zeus network effect if it can develop density in top markets.
Taggar says the biggest challenge is that “I feels like I’m running five startups at once. Pricing, supply chain, customer service, B2B. We’ve decided to make everything custom — our own property manager software, our own internal CRM. We think these advantages compound, but I could be wrong and they could be wasted effort.”
The benefits of Zeus‘ success would go beyond the founder’s bank account. “I’ve had friends in New York get great opportuntiies in San Francisco but not take them because of the friction of moving” Taggar says. Routing talent where it belongs could get more things built. And easy housing might make people more apt to live abroad temporarily. Taggar concludes, “I think it’s a great way to build empathy.”
A former judge and family law educator has teamed up with tech entrepreneurs to launch an app they hope will help divorced parents better manage their co-parenting disputes, communications, shared calendar and other decisions within a single platform. The app, called coParenter, aims to be more comprehensive than its competitors, while also leveraging a combination of AI technology and on-demand human interaction to help co-parents navigate high-conflict situations.
The idea for coParenter emerged from co-founder Hon. Sherrill A. Ellsworth’s personal experience and entrepreneur Jonathan Verk, who had been through a divorce himself.
Ellsworth had been a presiding judge of the Superior Court in Riverside County, California for 20 years and a family law educator for 10. During this time, she saw firsthand how families were destroyed by today’s legal system.
“I witnessed countless families torn apart as they slogged through the family law system. I saw how families would battle over the simplest of disagreements like where their child will go to school, what doctor they should see and what their diet should be — all matters that belong at home, not in a courtroom,” she says.
Ellsworth also notes that 80 percent of the disagreements presented in the courtroom didn’t even require legal intervention — but most of the cases she presided over involved parents asking the judge to make the co-parenting decision.
As she came to the end of her career, she began to realize the legal system just wasn’t built for these sorts of situations.
She then met Jonathan Verk, previously EVP Strategic Partnerships at Shazam and now coParenter CEO. Verk had just divorced and had an idea about how technology could help make the co-parenting process easier. He already had on board his longtime friend and serial entrepreneur Eric Weiss, now COO, to help build the system. But he needed someone with legal expertise.
That’s how coParenter was born.
The app, also built by CTO Niels Hansen, today exists alongside a whole host of other tools built for different aspects of the co-parenting process.
That includes those apps designed to document communication, like OurFamilyWizard, Talking Parents, AppClose and Divvito Messenger; those for sharing calendars, like Custody Connection, Custody X Exchange and Alimentor; and even those that offer a combination of features like WeParent, 2houses, SmartCoparent and Fayr, among others.
But the team at coParenter argues that their app covers all aspects of co-parenting, including communication, documentation, calendar and schedule sharing, location-based tools for pickup and drop-off logging, expense tracking and reimbursements, schedule change requests, tools for making decisions on day-to-day parenting choices like haircuts, diet, allowance, use of media, etc. and more.
Notably, coParenter also offers a “solo mode” — meaning you can use the app even if the other co-parent refuses to do the same. This is a key feature that many rival apps lack.
However, the biggest differentiator is how coParenter puts a mediator of sorts in your pocket.
The app begins by using AI, machine learning and sentiment analysis technology to keep conversations civil. The tech will jump in to flag curse words, inflammatory phrases and offensive names to keep a heated conversation from escalating — much like a human mediator would do when trying to calm two warring parties.
When conversations take a bad turn, the app will pop up a warning message that asks the parent if they’re sure they want to use that term, allowing them time to pause and think. (If only social media platforms had built features like this!)
When parents need more assistance, they can opt to use the app instead of turning to lawyers.
The company offers on-demand access to professionals as both monthly ($12.99/mo – 20 credits, or enough for two mediations) or yearly ($119.99/year – 240 credits) subscriptions. Both parents can subscribe for $199.99/year, each receiving 240 credits.
“Comparatively, an average hour with a lawyer costs between $250 and upwards of $500, just to file a single motion,” Ellsworth says.
These professionals are not mediators, but are licensed in their respective fields — typically family law attorneys, therapists, social workers or other retired bench officers with strong conflict resolution backgrounds. Ellsworth oversees the professionals to ensure they have the proper guidance.
All communication between the parent and the professional is considered confidential and not subject to admission as evidence, as the goal is to stay out of the courts. However, all the history and documentation elsewhere in the app can be used in court, if the parents do end up there.
The app has been in beta for nearly a year, and officially launched this January. To date, coParenter claims it has already helped to resolve more than 4,000 disputes and more than 2,000 co-parents have used it for scheduling. Indeed, 81 percent of the disputing parents resolved all their issues in the app, without needing a professional mediator or legal professional, the company says.
Noble.AI, an SF/French AI company that claims to accelerate decision making in R&D, has raised a new round of funding from Solvay Ventures, the VC arm of a large chemical company, Solvay SA. Although the round was undisclosed, TechCrunch understands it to be a second seed round, and we know the company has closed a total of $8.6 million to date.
Solvay was previously an early customer of the platform, prior to this investment. The joint announcement was made at the Hello Tomorrow conference in Paris this week.
As a chemical company, Solvay’s research arm generates huge volumes of data from various sources, which is part of the reason for the investment, confirmed the firm. Noble.AI’s “Universal Ingestion Engine” and “Intelligent Recommendation Engine” claim to enable the creation of high-quality data assets for these kinds of big data sets that can later be turned into recommendations for decision making inside these large businesses.
Founder and CEO of Noble.AI, Dr. Matthew C. Levy, said he is “enthusiastic to see what unfolds in its next phase, tackling the most important and high-value problems in chemistry” via the partnership with Solvay.
“Noble.AI has the potential to be a real game changer for Solvay in the way it enables us to utilize data from our 150-year history with new AI tools, resulting in a unique lever to accelerate our innovation,” said Stéphane Roussel, Solvay Ventures’ managing director.
Prime Movers led a seed round in Noble.AI in late 2018, which was never previously disclosed to the press. Solvay Ventures is now leading this second seed round.
The move comes in the context of booming corporate R&D spending, which in 2018 reached $782 billion among the top 1,000 companies, representing a 14 percent increase relative to 2017 and the largest figure deployed to R&D ever. However, R&D in corporates lags behind the startup world, so these strategic investments seem to be picking up pace.
In case you missed it, you can listen to the recording of this roundtable here:
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Sramana Mitra: What about geography? What’s comfortable? Preeti Rathi: From a geography perspective, we’re really focused on companies right here in the US. Given our model of working hand in hand...
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If you are looking for something powerful, creative, provocative, and beautifully done, go look at True Blue by Eliot Peper and team.
In 2017, I wrote a post titled A Clever Short Story About Discrimination about the short story that Eliot had written. It was an idea that David Cohen had. He shared it with Eliot, who then wrote the short story. David then funded a project for Eliot to turn it into an âinternet public art project.â
Eliot describes how they made True Blue. Itâs a fabulous integration of story, illustration, and design on the web.
Independent of the beauty of the project, the story is a critically important one for todayâs society. While a cynic will say âsame as it ever wasâ, consider if eye color (instead of skin color, or gender, or ethnicity, or sexual orientation, or â¦) was a key âcategorizerâ in our society.
Aura Vision, which is part of the current batch of startups at Y Combinator, helps retailers understand who’s visiting their stores and what they’re doing there.
In other words, if you want to see the demographics of who’s visiting the store, or which displays and products are actually prompting customers to linger, or how long customers have to wait in line, Aura Vision can use existing security camera footage to tell you.
“We are focused on specialty retail — everyone on the retail market that isn’t grocery,” CEO Daniel Martinho-Corbishley told me. “We provide them with insights to help them innovate successfully.”
The company was founded by Martinho-Corbishley, CTO Jamie R. Lomelí and CPO Jonathan Blok. Martinho-Corbishley said he and Lomelí both did Ph.D. research at the University of Southampton on machine learning and computer vision, and they “saw the potential for deep learning in the retail industry,” particularly after they “had a look at what else is out there.”
There are companies trying to use security footage to provide in-store analytics to retailers — for example, there’s Prism Skylabs, which launched at Disrupt in 2011 and is backed by CrunchFund. Others are using technology like Wi-Fi and Bluetooth to provide similar data.
Aura Vision founders
However, Blok pointed out that installing new sensors in a store can be “a big upheaval.” With Aura Vision, on the other hand, retailers either use the security cameras they’ve already set up — or if they do need to install new cameras, “you’re going to get a security system” out of the process.
In addition, Martinho-Corbishley pointed to the sophistication of Aura Vision’s technology, which can provide “very precise and accurate insights out from the camera themselves — any camera in the store.” That includes distinguishing between staff and customers in the footage, and determining the demographics of a customer, even if their face isn’t captured.
As for what this kind of analysis does to customer privacy, Martinho-Corbishley noted that the company was “born at the time of GDPR.”
“In that very first year, we made a decision very early on to not identify anyone, so the data that we provide back to our clients is entirely anonymized,” he said. In other words, it will describe the behavior of your customers in aggregate, but “we never link that to the person’s identity.”
Aura Vision charges a subscription fee based on the number of cameras a customer is using each month — something that Martinho-Corbishley said is “a very simple charge” without “crazy hidden fees or crazy retainers.”
According to a TechNavio report published last year, the global business intelligence market is expected to grow 8% over the next few years driven by the need for businesses to improve their...
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While it doesn’t happen that often, Bootstrapped Unicorns do exist. My 2014 Entrepreneur Journeys book, Billion Dollar Unicorns has a whole section on this topic. You can read an excerpt on my blog...
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Digital identity startup Passbase has bagged $600,000 in pre-seed funding led by a group of business angel investors from Alphabet, Stanford, Kleiner Perkins and EY, as well as seed fund investment from Chicago-based Upheaval Investments and Seedcamp.
The 2018-founded Silicon Valley-based startup — whose co-founder we chatted to briefly on camera at Disrupt Berlin — is building what it dubs an “identity engine” to simplify identity verification online.
Passbase offers a set of SDKs to developers to integrate into their service facial recognition, liveness detection, ID authenticity checks and ID information extraction, while also baking in privacy protections that allow individual users to control their own identity data.
A demo video of the verification product shows a user being asked to record a FaceID-style 3D selfie by tilting their face in front of a webcam and then scanning an ID document, also by holding it up to the camera.
On the developer front, the flagship claim is Passbase’s identity verification product can be deployed to a website or mobile app in less than three minutes, with just seven lines of code.
Co-founder
In practice, that means a website visitor or app user can prove who they are (or how old they are) without having to share their full identity document with the service.
He says they got a call from Apple, in August 2018, informing them Coinance had been pulled from the AppStore. The issue was they needed to be able to comply with know your customer (KYC) requirements as regulators cracked down on the risk of cryptocurrency being used for money laundering.
“With a quick call to our lawyers, we learned it was because we now needed to complete strong identity verification with every exchange integrated for every user in order to fulfill our KYC obligations,” explains
The experience with Coinance convinced Klenk and his two co-founders — Felix Gerlach (an ex-Rocket Internet product manager/designer) and Dave McGibbon (previously an investment associate at GoogleX) — that there was a “huge opportunity” to build a “full-stack” identity verification tool that was easy for engineering teams to integrate. So it sounds like it’s thinking along similar lines to Estonian startup Veriff.
Klenk claims current vendors “take weeks to integrate and charged thousands of dollars from the start.” And i
At the same time, Klenk says the founding team saw a growing need for a privacy-focused identity verification tool — to “protect people’s information by design and help companies collect only the information they need.”
On this he freely cites Europe’s General Data Protection Regulation as an inspiring force. (“GDPR is built into the DNA of this product,” is the top-line claim.)
“Companies gain access to users’ information in a secure enclave, and avoid the dangers of getting hacked and leaking sensitive information,” says Klenk, describing the system architecture for verification as the core IP of the business.
They’re in the process of filing patents for the “developed technology,” working with two technical advisors, he adds.
Passbase’s verification stack itself involves modular pieces so that it can adapt to changing threats, as Klenk tells it.
The startup is partnering with service providers for various verification components. Though he says it also has in-house computer vision experts who have built its anti-spoofing and liveness detection.
“This will always be an arms race against the latest spoofing tactics. We plan to stay ahead of the curve by introducing multi-factor authentication techniques and partnering with the best technology providers,” he adds on that.
He says they’re also working with a U.S.-based security company and other security experts to test the robustness and security of their system on an ongoing basis, adding: “We are planning to obtain all required certifications to ensure the security of our system e.g. ISO, Fido.”
Passbase’s product is currently in a closed beta with more than 200 companies signed up to its early access program.
Five have been “handpicked and onboarded” for a closed pilot — and Klenk says it’s now running tests and figuring out final requirements for an open beta launch planned for the middle of this year.
“Our early customers are mostly trust-based marketplaces (like an Airbnb),” he tells TechCrunch. “We are adding features such as PEP, OFAC and others over the next month to allow us to also service the mobility space, age-restricted products and eventually online banking and fintechs with KYC obligations.”
The startup’s first tranche of investor funding will be used for building out its core tech and mobile apps — while also “delighting our first clients with our B2B solution, getting traction, nailing product market fit,” as Klenk puts it.
He emphasizes that they’re also keen to nail a healthy startup culture from the get-go — saying that building “an exciting and inclusive place to work” is a priority. (“Since many high-growth startups dropped the priority for this in order for growth. We want to get this right from the beginning.”)
On the competitive front, Passbase is certainly driving into a noisy arena with no shortage of past effort and current players touting identity and digital verification services — albeit, all that activity underlines the high demand level for robust online verification.
Demand that’s likely to rise as more policymakers and governments wake up to the risks and challenges posed by online fakes — and prepare to regulate internet firms.
Discussing the competitive landscape, Klenk name-checks Jumio, Onfido and Veriff in the identity verification space, though he argues Passbase’s “developer-focused go-to-market and focus on creating digital identity” creates a different set of incentives which he also claims “allow us to get really creative on price and auxiliary offerings.”
“Our competition cares about price x volume. We care about creating a robust and secure network of trusted user-owned digital identities,” he suggests.
On the digital identity front he points to Civic, Verimi and Authenteq as being focused on “digital and self-sovereign identity,” though he says they have “tended” to take a B2C approach versus Passbase’s “full-stack” developer offering, which he claims is “immediately useful to a large market of players.”
There’s clearly plenty still to play for where digital identity is concerned. It remains a complex and challenging problem that loops in all sorts of entities, touchpoints and responsibilities.
But add privacy considerations into the mix and Passbase’s hope is that, by going the extra mile to build a zero-knowledge architecture, it can become a key player.
Sramana Mitra: How does that translate into ROI? Do you have specific customer scenarios where you’ve seen your technology make significant impact? How do you measure that impact? What’s measurable...
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Facebook exec Chris Cox is leaving the company. Getty
Good morning! This is the tech news you need to know this Friday.
Chris Cox, a key Facebook executive and lieutenant of Mark Zuckerberg, is leaving the company amid a reorganization. Zuckerberg announced the news in a memo to employees that he also shared publicly on Thursday. Uber plans to launch its IPO next month, Reuters reports. The timing of the IPO means it should arrive soon after Uber's main rival Lyft. Tesla unveiled its new Model Y on Thursday night. CEO Elon Musk presented the new crossover SUV. Facebook is launching a new gaming hub and app to try and lure gamers to the social network. The company is putting video-game streaming, groups, casual games, and other gaming-related material in a specialised tab in the app. Facebook says its massive outage was due to a "server configuration change." On Wednesday, the Silicon Valley tech giant's apps went down across the world for hours. Apple's iCloud service appeared to be suffering outages affecting several products on Thursday. Earlier this week, Facebook experienced a huge outage. Apple responded to Spotify's regulatory complaint that it quashes fair competition. Apple said Spotify wants to keep the benefits of its app store "without making any contributions to that marketplace." A Google employee broke the world record for calculating pi. Google engineer Emma Haruka Iwao has calculated pi to 31 trillion digits, breaking the world record. The reporter who broke the Theranos saga wide open pinpointed the moment he knew he had a big story on his hands. The Wall Street Journal investigative reporter John Carreyrou knew from his first phone call with a Theranos insider that he had a great story. The US's top general says Google's work in China is indirectly benefiting the Chinese military. "Frankly, 'indirect' may be not a full characterization of the way it really is, it is more of a direct benefit to the Chinese military," said Marine General Joseph Dunford.Have an Amazon Alexa device? Now you can hear 10 Things in Tech each morning. Just search for "Business Insider" in your Alexa's flash briefing settings.
Tesla CEO Elon Musk said he expects the new Model Y SUV to outsell the Model S, Model X, and Model 3 combined.
"I think it's really compelling. I'm confident that of any mid-sized SUV, it will be the one you want," Musk said at the Model Y unveiling event in Hawthorne, California, on Thursday evening, adding that Tesla would "probably do more Model Ys than (Model) S, (Model) X, (Model) 3 combined, most likely."
Tesla opened up orders for the long-range and Performance versions of the Model Y after the event. Customers can place their orders on the company's website for a deposit of $2,500.
Read more:The Tesla Model Y has staggering specs â but it isn't a major new design for Tesla
While Musk remains optimistic about the vehicle, some on Wall Street have expressed concerns about the Model Y eating into sales for the Model 3.
In a note to clients earlier this week, Goldman Sachs analysts said that the Model Y could put further pressure on the Model 3.
"While the unveil of the Model Y could drive incremental reservationsâ given a much larger global market for crossovers than sedans â and help cash balances given likely deposit collection, this new product could further weigh on Model 3 demand as consumers decide to wait a little longer to purchase a Tesla crossover vehicle (a segment that has seen significant increases in demand across the major auto markets the past few years)," Goldman analysts said.
While Tesla saw a steady increase in Model 3 sales from October to December of 2018, the company saw a drop off in January and February of this year.
Tesla sold 17,750 Model 3s in the US in October and 25,250 in December. However, in January, the company only sold 6,500 Model 3 sedans in the US. That number dropped even further in February to 5,750.
Tesla CEO Elon Musk views the new Tesla Model Y at its unveiling in Hawthorne, California on March 14, 2019. FREDERIC J. BROWN/AFP/Getty Images
Tesla is currently selling three versions of the Model Y SUV.
The long-range rear-wheel drive begins pricing at $47,000 before incentives and has a range of 300 miles per charge.
The dual-motor all-wheel drive will have a range of 280 miles per charge and begins pricing at $51,000 before incentives. The Performance model will also have a range of 280 miles, but will begin pricing at $60,000.
According to Tesla's website, the company plans to begin manufacturing these three versions late next year. But customers can place an order now on the company's website for a deposit of $2,500.
Those looking to order the standard version of Tesla's Model Y will have to wait even longer for their SUV.
According to Tesla's website, the Model Y standard range version of the vehicle will begin production in 2021. Customers cannot yet place an order for this version of the vehicle.
The standard Model Y version will have a range of 230 miles per charge, a top speed of 120 miles per hour, and begin pricing at $39,000. The SUV will also be able to go from 0-60 mph in 5.9 seconds, Tesla says.
The Model Y SUV will seat five people, but two seats can be added for an additional cost.
Tesla fans can now place an order for the company's long-awaited Model Y SUV, at least for the premium versions. But they will have to wait a while before they get their cars.
Tesla opened up orders for the long range and performance versions of the Model Y on Thursday evening after CEO Elon Musk unveiled the vehicle at an event at the company's design studio in Hawthorne, California.
The long-range rear-wheel drive version begins pricing at $47,000 before incentives and has a range of 300 miles per charge.
The dual-motor all-wheel drive will have a range of 280 miles per charge and begins pricing at $51,000 before incentives. The Performance model will also have a range of 280 miles, but will begin pricing at $60,000.
According to Tesla's website, the company plans to begin manufacturing these three versions late next year. But customers can place an order now on the company's website for a deposit of $2,500.
Those looking to order the standard version of Tesla's Model Y will have to wait even longer for their SUV.
According to Tesla's website, the Model Y standard range version of the vehicle will begin production in 2021. Customers cannot yet place an order for this version of the vehicle.
The standard Model Y version will have a range of 230 miles per charge, a top speed of 120 miles per hour, and begin pricing at $39,000. The SUV will also be able to go from 0-60 mph in 5.9 seconds, Tesla says.
The Model Y SUV will seat five people, but two seats can be added for an additional cost.
Tesla's unveiling of the Model Y comes at a time when the company is facing mounting financial pressure and, according to some analysts, a demand problem.
In late February, Tesla announced it was closing most of its stores and moving to an online sales model. At the time, the company said the move would enable it to slash the prices for all of its cars by several percent and roll out the long-promised $35,000 Model 3 sooner than expected.
About a week later, though, Tesla backtracked and said that it would actually keep more stores open and increase the price of its vehicles back to their previous amount.
"In the US, we think the amount of information points to declines in demand for Tesla's higher priced vehicle variants following the start of the phase-out of the Federal Tax credit; and we believe moves by the company to continue to improve its cost structure in order to deliver lower priced vehicles and tap remaining consumer demand corroborate this," Goldman Sachs said to clients in a note earlier this week.
What's more, Goldman analysts said there is also the worry that the reveal of the Model Y could put further pressure on the Model 3 sales because people may opt to wait to purchase the SUV instead of opting for the lower-cost sedan.
Musk, though, did not seem that worried about demand at the event.
"I think it's really compelling. I'm confident that of any mid-sized SUV, it will be the one you want," Musk said.
"I think it will probably sell, probably do more Model Ys than (Model) S, (Model) X, (Model) 3 combined, most likely," Musk said at the event.
LOS ANGELES â Tesla CEO Elon Musk revealed the Model Y SUV at the carmaker's design studio on Thursday night, to the cheers of a crowd of Tesla owners and special guests gathered inside.
Musk was in loose, easygoing form â he ditched his now-famous habit of wearing a cool new jacket for the vehicle reveal, opting instead for a basic black blazer, but he did don black-and-red Nike Jordans for the occasion.
Tesla's lineup â Model S, Model 3, Model X, and now Model Y â spells out "S3XY," and Musk offered plenty of jokes on that score as he reviewed Tesla's history, starting with the first Roadster and concluding with the Model Y unveiling. At times, the CEO, embattled through 2018, seemed to be engaging in an extended standup comedy routine. He boldly declared that in 10 years, Tesla will be driven on Mars, cracking himself up.
It was a good show, and it was topped off by the main event as the Model Y was driven out by Tesla design head Franz von Holzhausen.
In a dashing blue with blacked-out details such as badging and door handles for its debut, the Model Y is the car that Tesla urgently needs to be selling: a long-range all-electric crossover to capture the imagination of buyers increasingly besotted by these car/SUV mashups.
The Model Y. Tesla
In Performance trim, the Model Y's specs are stunning. A zero-to-60 mph time of 3.5 seconds meets 300 miles of range, with a 150 mph top speed and $60,000 price tag. That trim level arrives in late 2020, while the slower, $39,000 Standard Range Model Y won't hit the market until 2021.
The numbers are actually cooler than the car, which isn't a major departure from Tesla's familiar design language. It's sleek, wearing its functionality well. But compared with the dazzling new Roadster, revealed in 2017, and the stately Model S and taut Model 3, the Model Y is a typical crossover. Von Holzhausen did some fine work with it, but crossovers are difficult to make thrilling.
That was to be expected â Tesla has to build this thing, and the design shares components with the Model 3 to ease the manufacturing burden. So yes, it's an upscaled Model 3, or a downsized and less complicated (No falcon wing doors!) Model X.
That said, it does have that distinctive, futuristic Tesla look and will stand out vividly from the Toyota RAV4's and Honda CR-V's when it does hit the streets.
The bottom line? It's an incredibly important vehicle for Tesla, and the details are exactly what the market was asking for. But is it "bringing sexy back, quite literally," as Musk said? Along with the rest of its family, yes. But on its own, I don't think it looks as good as it will probably drive.
Tesla unveiled on Thursday its latest vehicle, the Model Y crossover SUV, at its design studio in Hawthorne, California.
The Model Y is Tesla's second SUV, after the Model X. The vehicle will have a range of 300 miles per charge, the ability to accelerate from 0-60 mph in 3.5 seconds, and the capacity to seat seven people, CEO Elon Musk said.
Read more: Tesla customers can pay up to $200,000 to reserve the electric Semi truck on the company's website
Tesla began allowing customers to reserve the vehicle for a $2,500 deposit after Thursday's event. Three trims are available to reserve: a long-range, rear-wheel-drive trim that starts at $47,000; a long-range, all-wheel-drive trim that starts at $51,000; and an all-wheel-drive performance trim that starts at $60,000.
Elon Musk said a $39,000, standard-range trim will arrive in 2021. Tesla
The long-range, rear-wheel-drive trim has the longest projected range of the three, at 300 miles, while the other two trims have projected ranges of 280 miles. The performance trim will be the fastest of the three, with a top speed of 150 mph and the ability to accelerate from 0-60 mph in 3.5 seconds, Tesla says.
Tesla's Model 3 sedan, which the automaker began delivering in 2017, has a top range of 325 miles and the ability to accelerate from 0-60 mph in 3.2 seconds, depending on the trim. The Model 3 starts at $35,000.
The Model 3 has 15 cubic feet of cargo space, while the Model Y will have 65 cubic feet of cargo space, Tesla says.
Production for the three available Model Y trims is expected to begin at the end of 2020, Tesla says. Musk said during the event that a standard-range trim will arrive in 2021 and start at $39,000.
During the unveiling event, Musk touted the Model Y's performance, functionality, and safety.
"It has the functionality of an SUV, but it will ride like a sports car," Musk said.
Musk said he expects the Model Y will become the safest mid-size SUV.
"Of any mid-size SUV, it will be the one you want," he said.
Tesla says production for the Model Y will begin in 2020. Tesla Motors/Handout via Reuters
The Model Y's unveiling comes at a time when Tesla is facing mounting financial pressure and, according to some analysts, a demand problem.
In late February, Tesla announced it was closing most of its stores and moving to an online sales model. At the time, the company said the move would enable it to slash the prices for all of its cars by several percent and roll out the long-promised $35,000 Model 3 sooner than expected.
About a week later, though, Tesla backtracked and said that it would actually keep more stores open and increase the price of its vehicles back to their previous amount. These moves signal the company may be facing some significant headwinds, according to Goldman Sachs analysts.
"In the US, we think the amount of information points to declines in demand for Tesla's higher priced vehicle variants following the start of the phase-out of the Federal Tax credit; and we believe moves by the company to continue to improve its cost structure in order to deliver lower priced vehicles and tap remaining consumer demand corroborate this," Goldman Sachs said to clients in a note earlier this week.
What's more, Goldman analysts said there is also the worry that the reveal of the Model Y could put further pressure on the Model 3 sales because people may opt to wait to purchase the SUV instead of opting for the lower-cost sedan.
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Itâs still Pi Day at least in Boulder for a few more hours. And, well, robots.
Misty is making a lot of progress and is still available to pre-order at 25% off her retail price, which is just slightly more than $3,141.59.
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