ATO-Gear is ready to produce more Arions, the smart running insole. At least if the startup finds enough investors, co-founder Andrew Statham says. In order to attract new investors quickly, Statham and his team launched a crowdfunding campaign via Seedrs last week. 185 people invested in the start-up via the site within 24 hours. Which gives them an amount of 143,873 euros, more than 30,000 euros above the desired amount. The campaign remains open as ATO-Gear needs more funding. Statham: “We need this basic amount in order to take the first steps to scale up.”
Seedrs is an efficient way to attract investors, Statham explains. “It’s easily accessible and you get a share in our company.” That is the difference compared to a crowdfunding site such as Kickstarter. At Kickstarter, you buy a product and you are the first one to have it. With Seedrs you are an investor and you actually have a share in the company.
Investing in a start-up is risky because startups fail every day. That’s what makes crowdfunding so interesting, according to Statham. “You get a lot of investors who invest a small amount of money. That’s how you spread the risk and if the startup succeeds, you’ll have a chance of a return. And with the money, we can continue to make Arion a success. A share in Arion costs € 18.80 and if it is successful there is a chance of a “10x return”: ten times your money back.
Three years ago, ATO-Gear built its first prototypes with its own savings. This covered a period of 18 months. At that time, there was the first round of investments to which BOM, the Brabant Development Company, and a number of so-called Angel Investors contributed. These ‘Angel investors’ have or had their own successful business and invest in startups and small businesses. They share their experience with him and his team, Statham tells us. With these investments, ATO-Gear turned the prototypes into real products and brought them to the market. “We have sold more than a thousand copies. Not only in the Netherlands and the UK, but all over the world.
Now ATO-Gear is ready for the next step and that is scaling up the company. This will require a larger production of Arions. More money is needed for this so that the suppliers can provide the amount of production which is needed. And Statham wants to expand to other countries. “What we really want is to launch Arion at the New York Marathon.” In 2019 Statham and his team will go for a production of 10,000 insoles and in 2020 for one of 30,000 – 40,000 pairs.
An amount of EUR 2.5 million is needed for this. The costs are almost all “upfront costs”: the suppliers for more production capacity, the costs of marketing and the costs of going to international events. As soon as money comes in, it is necessary to hire people again. Until ATO-Gear breaks even and Statham is able to invest that revenue in the growth of the company, investors are needed. Statham says that the startup does not manage with the Seedrs campaign alone. That is why he is in discussion with venture capitalists, larger investors who are accustomed to investing in start-up companies. “An advantage of the Seedrs campaign is that we will be able to access the money faster than through venture capital.”
“Our company must grow and we must show that we can also sell Arion in other countries. If we can do that, we want to look for major partners in the sports, health and consumer market to work with us.” The Seedrs campaign stops no later than 12 October. If they have sufficient funding, the campaign stops sooner.