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PARK, Calif., April,
18, 2024 /PRNewswire/ -- Cyngn Inc. (the
"Company" or "Cyngn") (Nasdaq: CYN). Business Update from
Lior Tal, CEO at Cyngn Inc.
Dear Shareholders, Customers, and Partners,
I want to take this opportunity to put some of the recent press
releases and milestones we announced in context and to provide an
update on the progress we've made both operationally and
technologically to accelerate revenues and position Cyngn for
success.
Market Opportunity
Based on the number of relevant material handling vehicles sold
per year (including forklifts) and DriveMod's retrofit
capabilities, we identify a potential install base of >3.75
million vehicles globally. Given the cost of labor required to
operate these vehicles in different geographies, we estimate an
attractive market opportunity of over $268B.
This estimate takes into account our Enterprise Autonomy Suite
(EAS) providing savings to customers relative to the fully burdened
cost of vehicle operators. We believe the costs and difficulties
associated with hiring and retaining material handling employees
are proving to be a persistent issue for corporations, and many
companies have outlined strategic initiatives to get their
employees away from the vicinity of vehicles that move hazardous,
heavy loads — especially forklifts.
Selling to Enterprises
Generating revenues is our primary focus as a company.
Industrial sales cycles are long and onerous, which is especially
true given the novel technology we are bringing to market for
safety-critical applications. We've found that customers that are
buying automated vehicle technology tend to follow a few typical
steps, which we've simplified and applied our own terminology
to:
- On-site Demonstration (not integrated into customer
operations) or Initial Deployment (integrated into customer
operations)
- Vendor onboarding, cross-functional approvals, and
procurement
- Pilot Purchase (1-3 vehicles to justify a potential
scale up)
- Fleet Purchase (saturate the use case that has been
piloted successfully)
- Enterprise Purchase (saturate sites and use cases
across the organization)
The burden of proof to advance through this cycle tends to be
higher for larger customers with larger opportunities. For example,
we are now working on transitioning this previously announced
Fortune 100 customer to Fleet Purchase. It has taken about a year
to get the customer to this point, but the opportunity to scale
with customers of this magnitude is significant and justifies the
effort. We are excited to share the name of this customer, but we
are still being held to confidentiality for competitive reasons. We
hope to be able to share more in the not-too-distant future.
Looking at the steps above, I'd like to highlight that Pilot
Purchase is when customers purchase DriveMod vehicles with
multi-year EAS contracts. While we do expect relatively high
conversion rates after On-site Demo or Initial Deployment, given
our confidence in our products and the pre-sales groundwork
required to even reach this stage, we want to be transparent that
some On-site Demos and Initial Deployments will not result in
purchases.
We have worked on codifying the sales process so that we can
find opportunities to streamline it and speed up new business
acquisition. Our efforts include:
- Bolstering our inside sales team and prospecting tools to
increase outbound lead generation
- Continually improving our marketing strategies to increase the
volume and quality of our inbound lead generation
- Templatizing everything from customer site assessments to
on-site vehicle demo scripts in order to qualify and convert
high-win-percentage customers
- Hiring experienced senior account executives to close
contracts
These efforts have produced some key improvements to our sales
pipeline when looking back at 2023 vs 2022: we sourced 4x as many
opportunities, and we reduced the time required for technical
validation to commit to On-site Demos and Initial Deployments from
weeks to days.
Looking forward, we are focused on opening new distribution and
sales channels, especially with key OEM and system integrator
partners that we've announced like Motrec, BYD, and RobotLAB. We
ultimately expect that leveraging the strengths of our partners in
these existing distributor and service networks could be the most
fruitful avenues to Cyngn sourcing new business while enabling us
to remain lean as a software company with scalable products.
Investment in Our People and Tools
Two major factors have proven to be paramount in our sales
enablement: the people and the tools that we use internally to
deploy DriveMod vehicles.
Over the past year, we've roughly tripled our team size across
sales, marketing, and customer success. We are filling the sales
pipeline and working more deals than we ever have before. At its
core, Cyngn is a technology company, so our R&D team makes up
the majority of our headcount. We have continued to expand our
R&D teams based on the needs of the product, and we have been
particularly successful in hiring top talent in cutting-edge fields
like artificial intelligence (AI) and robotics. This R&D
expansion has enabled us to improve our own deployment tools and
underlying technology, which in turn improves our ability to
sell.
On the tools front, we have released upgrades throughout our
mapping and localization systems that are particularly impactful to
our customer acquisition capability because building a map is the
first gating step in getting DriveMod vehicles up and running at
customer sites. We released a next generation map editing tool,
introduced an automated map building feature that generates maps
from manual drives, and enabled maps to be built remotely at the
location of vehicles to eliminate delays and costs from large data
uploads to the cloud.
The impressive results of these advancements are exemplified by
the fact that we were able to launch our initial deployment at
Rivian's large facility after just one week, and we can now perform
fully autonomous on-site demos at customer facilities within days
of a vehicle arriving. These capabilities have significantly
reduced our customer acquisition costs and increased the
utilization of both our people and vehicle resources to enable us
to advance more customers through the late stages of our sales
process.
Finally, we remain committed to developing state of the art
technology as demonstrated by the recent notice of allowance for
our 20th patent. Our collaboration with Nvidia ensures that we
remain at the forefront of AI, and we look forward to sharing
additional developments soon.
Moving Forward Together
I am committed to creating shareholder value and to providing
you with news when I can. We work with our customers to share as
much information as possible on the exciting progress we're making
during our collaborations. We are getting the most traction in
automotive, heavy manufacturing, and defense, which are domains
that tend to have large enterprises that remain secretive about
their technological advancements. Therefore, it is not uncommon
that some of our customers insist on confidentiality and do not
allow us to report any details, especially considering the
competitive advantage that can be derived from automation. We
recently removed a press release about an initial deployment from
sites that we were able to due to a miscommunication between us and
the customer, but the facts that were reported remain true. We aim
to work with them towards sharing details when appropriate.
Still, exciting outcomes like the one we had with Arauco give us
confidence that we will be able to provide meaningful updates with
some impressive brands. The 100 DriveMod Forklift pre-order that we
reported last year was a major achievement that resulted from
months of cutting-edge work with a great partner towards a
significant business opportunity. We are now ramping up production
of the DriveMod Tugger, which will enable us to shift our R&D
focus to commercialization of the DriveMod Forklift — with
forklifts serving as the vehicle type that represents the lion's
share of the market opportunity we outlined.
I am excited by the opportunity that lies ahead. I want to
congratulate the hard work of our team at Cyngn, and I want to
thank the investors, customers, and partners that have given us
support throughout the years.
Best regards,
Lior Tal
About Cyngn
Cyngn develops and deploys scalable,
differentiated autonomous vehicle technology for industrial
organizations. Cyngn's self-driving solutions allow existing
workforces to increase productivity and efficiency. The Company
addresses significant challenges facing industrial organizations
today, such as labor shortages, costly safety incidents, and
increased consumer demand for eCommerce.
Cyngn's DriveMod Kit can be installed on new industrial vehicles
at end of line or via retrofit, empowering customers to seamlessly
adopt self-driving technology into their operations without high
upfront costs or the need to completely replace existing vehicle
investments.
Cyngn's flagship product, its Enterprise Autonomy Suite,
includes DriveMod (autonomous vehicle system), Cyngn Insight
(customer-facing suite of AV fleet management, teleoperation, and
analytics tools), and Cyngn Evolve (internal toolkit that enables
Cyngn to leverage data from the field for artificial intelligence,
simulation, and modeling).
Find Cyngn on:
- Website: https://cyngn.com
- Twitter: https://twitter.com/cyngn
- LinkedIn: https://www.linkedin.com/company/cyngn
- YouTube: https://www.youtube.com/@cyngnhq
Investor/Media Contact: Investors@cyngn.com
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Any
statement that is not historical in nature is a forward-looking
statement and may be identified by the use of words and phrases
such as "expects," "anticipates," "believes," "will," "will likely
result," "will continue," "plans to," "potential," "promising," and
similar expressions. These statements are based on management's
current expectations and beliefs and are subject to a number of
risks, uncertainties and assumptions that could cause actual
results to differ materially from those described in the
forward-looking statements, including the risk factors described
from time to time in the Company's reports to the SEC, including,
without limitation the risk factors discussed in the Company's
annual report on Form 10-K filed with the SEC on March 7, 2024 and in our other filings with the
SEC. Readers are cautioned that it is not possible to predict or
identify all the risks, uncertainties and other factors that may
affect future results. No forward-looking statement can be
guaranteed, and actual results may differ materially from those
projected. Cyngn undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events, or otherwise.
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SOURCE Cyngn
