# The Smart Tire Company Financial Model Commercialising NASA-derived shape-memory alloy (NiTiNOL/METL) airless tires, starting with bicycles/scooters and expanding to automotive, trucking, and aerospace. - Canonical: https://finamodel.com/startups/the-smart-tire-company - Excel download: https://finamodel.com/startup-models/the-smart-tire-company.xlsx - Category: Hardware/Deep-tech - Model type: SaaS ARR / Valuation - Funding round: Venture - Funding: $1.3M - Founded: 2022 - Geography: USA (Innovation Lab in Akron, Ohio); global tire market targeted long-term. - Customer: B2C ## About the company The Smart Tire Company is developing METL, an airless tire made from NiTiNOL shape-memory alloy. The technology is licensed from NASA Mars Rover spring-tire work and is designed to avoid flats and pressure monitoring while remaining elastic, strong, retreatable, and lower in rolling resistance than pneumatic tires. The initial market is bicycles, followed by scooters, with automotive, trucking, aerospace, evTOL, lunar, and military applications described as later opportunities. Sales can combine direct consumer hardware with OEM supply: Felt Bicycles and Spin/Ford Mobility are strategic partners, and more than 4,000 people were on the bike-tire waiting list before launch. Model the phased product launch through design wins, waiting-list conversion, units, ASP, and channel mix. Deduct specialty-alloy materials, manufacturing investment, payroll, R&D, marketing, rent, and legal/IP costs. Launch timing, production capacity, gross margin, certification, OEM conversion, and segment expansion should determine scenarios. ## What's included - 5-year monthly revenue build with stage-appropriate growth assumptions - Full P&L, headcount plan, and operating-expense schedule - Cash-flow statement, runway, and burn-rate tracking - Valuation via exit multiple with a DCF cross-check - Returns analysis with MOIC and IRR - Unit economics including CAC, LTV, payback, and cohort retention ## Product & value proposition - Product name: METL (Metal Elastokinetic Tire Lattice) - airless tire made from NiTiNOL shape-memory alloy. - Core claims: never flat, no air pressure monitoring, one tire for vehicle lifetime, retreatable, lower rolling resistance than pneumatics, "elastic like rubber but strong like titanium". - Technology lineage: licensed/derived from NASA Mars Rover spring-tire technology; NASA Space Act Agreement signed June 2021. - Product variants under development: scooter, bicycle (METL - first commercial launch late 2022), motorcycle, automotive, truck, aircraft, evTOL, lunar/military. - Sustainability angle: less rubber waste, retreatable structure, reduced fuel consumption via correct tire pressure equivalent. - NASA Materials Scientist quote: "This technology has been demonstrated on a Jeep where it performed exceptionally… These unique materials look extremely promising in revolutionizing the entire terrestrial tire industry.". ## Market - Global tire market (TAM): $250B. - Two-wheel vehicle tire market (initial SAM): $19.4B. - Two-wheel market CAGR: 10%. - Deck notes "highest potential margins" in two-wheel segment. - No SOM figure provided. - Automotive, trucking, aerospace referenced as later-stage TAM expansion; no dollar values given for those segments in deck. ## Revenue model - Primary: direct hardware sales of METL tires to consumers (D2C, starting with bike tires). - Secondary: B2B / OEM supply to cycling brands (Felt Bicycles partner) and micro-mobility operators (Spin/Ford Mobility partner). - Channel: No explicit channel split (retail vs. direct vs. OEM) provided. - Longer-term revenue streams implied: automotive/truck OEM supply, aerospace/evTOL supply, NASA/military contracts - but no pricing or timeline commitments given. - Retreading as a service is mentioned conceptually but no retread revenue model described. ## Traction & metrics - Waiting list: 4,000+ people for METL bike tires. - Customers: 0 paying (product not yet launched at time of deck; launch planned late 2022). - Partnerships: Felt Bicycles (cycling OEM), Spin/Ford Mobility (micro-mobility) - described as "strategic partners". - Grants: SBIR Phase 1 $250K, SBIR Phase 2 $1.25M received. - IP: 3 patents granted, 3 pending. - Facility: 5,000 sq ft SMART Innovation Lab, Akron, Ohio. - NASA program: 1st place in FedTech NASA Startup Studio; NASA Space Act Agreement. ## Competition / moat - Implicit competitors: Michelin Tweel (airless), Bridgestone Air Free Concept, Goodyear non-pneumatic concepts - not named in deck. - Moat claims: NASA-licensed technology, proprietary NiTiNOL formulation (trade secrets), 3 granted + 3 pending patents, exclusive Space Act Agreement, Goodyear/NASA engineering pedigree on team. - Run-flat tires called out as inferior "limp home" solution. - No competitive matrix or direct competitor comparison shown. ## Team & funding ask / use of funds **Team:** - Earl Cole - CEO/Co-founder; UWashington, USC; business background. - Brian Yennie - CTO/Co-founder; Dartmouth; software engineering. - Jim Benzing - Principal Engineer; Goodyear and NASA. - William Farah - General Counsel. - Combined headline: "30+ years startup experience, 30+ years @ Goodyear & NASA". **Funding ask:** - Raising $3M growth capital. - Total funding to date: $250K (SBIR Phase 1) + $1.25M (SBIR Phase 2) = $1.5M in non-dilutive grants. **Use of funds (from slide 12 donut chart):** - Payroll: 34% (~$1.02M) - R&D: 34% (~$1.02M) - Manufacturing: 17% (~$0.51M) - Marketing: 7% (~$0.21M) - Rent & Utilities: 3% (~$0.09M) - Legal/IP: 3% (~$0.09M) --- ## Recommended financial model **Archetype + why:** Hardware deep-tech pre-revenue startup with a phased go-to-market. Best modelled as a **Product Launch / Hardware P&L + Runway model** with a 3-statement underpinning. The initial phase is R&D-spend-driven (like a biotech pre-approval), flipping to a product revenue model once METL bike tires launch in late 2022. Two-wheel market is the beachhead; automotive/truck/aerospace are option-value beyond the forecast horizon. A simple 3-statement with D2C unit economics layered on top is appropriate - not a SaaS ARR or marketplace model. **Forecast horizon & granularity:** - Near-term: Monthly, 18 months (burn/runway through capital deployment of $3M raise). - Medium-term: Annual, 5 years (2022–2026, aligning with timeline on slide 9). **Key drivers & assumptions:** *Revenue / units:* - Launch SKU: METL bike tire, targeting waiting-list conversion in late 2022. - Waiting list size: 4,000. Conversion rate: 25–40% in year 1 - typical for waiting lists in consumer hardware. - ASP (bike tire, pair): $150–$250 retail (premium airless positioning vs. $30–$80 pneumatic; comparable to Michelin Tweel premium tier). - Unit ramp: 1,000–5,000 units Y1 (constrained by 5,000 sq ft Akron facility); 10K–50K Y2 with manufacturing investment; scale to OEM volumes Y3+. - Scooter/motorcycle launch: 2024 per roadmap. - Automotive/truck: beyond 5-year model horizon (still in R&D per slide 9). *COGS / gross margin:* - Materials (NiTiNOL is specialty alloy): high initial COGS; blended gross margin 30–45% at scale (hardware premium product; initial pilot margin likely negative or near-zero). - Manufacturing capex: significant; 17% of $3M raise (~$510K) allocated to manufacturing. *Opex:* - Payroll: $1.02M of $3M raise (34%). team of ~8–12 people at this stage. - R&D: $1.02M (34%) - primarily materials science + prototyping. - Marketing: $210K (7%) - lean, leaning on waiting list and PR. - Rent: $90K (3%) - Akron facility. - Legal/IP: $90K (3%) - patent prosecution. *Grants & non-dilutive income:* - SBIR Phase 2 $1.25M already received. Model potential SBIR Phase 3 / DoD contracts as upside; not in base case. *Burn & runway:* - Monthly cash burn: ~$150–$200K/month at current headcount pre-revenue. - $3M raise + $1.25M SBIR Phase 2 = ~$4.25M total available. At $175K/month burn gives ~24 months runway - consistent with 2022–2024 plan before next raise. **Scenarios (Base / Bull / Bear - which variables flex):** - Bear: Waiting-list conversion 15%, ASP $150, gross margin 20%, manufacturing delays push launch to mid-2023. - Base: Conversion 30%, ASP $200, gross margin 35%, METL bike launch late 2022 per plan. - Bull: Conversion 50%, ASP $250, OEM partnership (Felt/Spin) accelerates volume in 2023, gross margin 45%+ at scale; SBIR Phase 3 or DoD grant secured. **Required sheets / outputs:** 1. Assumptions - all drivers above, with scenario toggle (Base/Bull/Bear). 2. Revenue Build - unit volume by SKU/segment × ASP × conversion/ramp. 3. P&L (Income Statement) - revenue, COGS, gross profit, opex by line, EBIT, net loss. 4. Cash Flow / Runway - monthly burn, cash balance, months of runway; grant tranches. 5. Balance Sheet (simplified) - equity raised, grants, capex, working capital. 6. Headcount Schedule - by department, linked to payroll. 7. Use of Funds - $3M deployment schedule vs. the 6-bucket breakdown from slide 12. ## Frequently asked questions ### Is the The Smart Tire Company financial model free? Yes. The The Smart Tire Company model is a free Excel download with live formulas. ### Can I change the assumptions? Yes. The workbook is editable and its live formulas recalculate when assumptions change.