Just a few months ago, Timmy Oh was worried that his startup wouldn’t survive.
The inventory for Vara Safety had run out again last November, which severely limited cash flow and the startup’s ability to order more inventory.
The Troy startup makes a mounted handgun holster called Reach 2 that locks the gun in place and unlocks it with a fingerprint.
The main reason for the inventory issue was because the gun safe used the same computer processor as some vehicles, a product facing serious shortages.
“We definitely felt hopeless,” said Oh, co-founder and CEO of Vara Safety. “Everything felt so out of control, where we were doing everything correctly in terms of the product, the market, the demand. That was all there, and we just couldn't get our hands on chips in a situation that was kind of unprecedented.”
But some investors came through, and that has allowed Vara to purchase inventory again, Oh said. Vara is nearly finished with an undisclosed angel round of funding led by Adam Miller of 1P Impact Capital. That firm previously invested $1.5 million in the startup.
“Within the last couple months, so much incredible stuff happened. We were able to connect with a lot of investors that really believed in us and put money in the company,” Oh said.
Also, Vara's engineers redesigned Reach 2 so that it can accommodate several different types of processors, adding many other sourcing options and basically eliminating the supply chain issue.
"And that's how we placed our most recent order,” Oh said. “It really goes to show how much the team matters. There were definitely times that I felt like giving up or felt hopeless, and then the team definitely stuck through and believed in it."
Now, the startup is projected to sell 10,000 units this year, starting in June, and collect $3 million in sales. The product sells for $299.
After selling out in 2020 because of inventory issues, Vara secured a couple thousand units the next summer and sold out of those. And then Vara secured some more a week before Black Friday in 2021, and they were sold out again almost immediately, Oh said. Last year, the company sold more than 3,000 units for about $1 million.
Despite limited marketing efforts, after a couple of viral social media posts – including a Facebook video with 1.4 million views – there’s now a customer waitlist of more than 9,000.
The projection for next year is $7 million to $8 million by midyear, if everything goes as planned, Oh said. Then, the company will be able to leverage debt financing for inventory investments.
Next, the company is looking to secure a venture capital round of $5 million to $7 million in about 12 to 18 months.
Based on recommendations from customers and potential future investors, Vara is developing an app that pairs with the product. One of the main functions will be two-factor authentication for unlocking guns. When enabled, a second person would have to approve the unlock attempt. That feature is an effort toward suicide prevention – a particularly prominent issue in the military veteran community.
"The VCs love the business model of software integration, which makes a lot of sense because it's more consistent recurring revenue,” Oh said.
During that rough patch a few months ago, Oh had to lay off several employees, and the remaining five took halftime pay.
Once business is stabilized, Oh plans to hire some more employees and restart the internship program. He’ll also be looking for a larger warehouse and headquarters space in the Troy area.
“We definitely see the light at the end of the tunnel now.”
