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Submarine Tours


Project No: #18340
Capital needed
USD 1,300,000
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Minimum investment per investor: 100000
Country: Australia
State: Queensland
Reason for needing Capital: Project Launch
Stage: Pre-Startup
Ideal Investor Role: Equity partner
Highlights: Submarine tours are an exciting and unique attraction suitable for people of any age and abilities.
Attraction is new to Australia with no competition.
Sunshine Coast is a popular destination for holiday makers all year around. Visitors are spending over $2 800 000 000 on entertainment yearly.
The business will attract interest of global entertainment business groups opening new perspectives for development.
There are only few offshore submarines currently available on the world market.
What you offer to investors?: We offer 410% ROI over 5 years on flexible investment terms with 9 months Grace period required to launch the project.
The Term Sheet is available on request.
Business plan:
Executive summary:
Additional documents:

OFFER OVERVIEW
 
We are offering you to take part in development of the Submarine Tours attraction in multiple locations over span of 3 - 5 years. Submarine Tourism has been proven to be an extremely profitable business in various destinations around the world but it hasn't been established in Australia yet.
The total cost of the project is between US $2 100 000 and US $2 300 000 with our up to date contributions of US $1 000 000. The main business asset, Tourist Submarine, has been acquired and is currently based on Gold Coast, Australia.
We are looking for remaining US $1 300 000 offering 410% ROI over 5 years on flexible investment terms.
The funds will be applied to the submarine's refit, which will take around 6 month to complete with preferred 9 month Grace period being applied to the funding.
The refit will be supervised by the class society, the American Bureau of Shipping, and by the original designer / engineer Borja Oriol representing current shipbuilder of the machine Nodosa shipyard.
The Company's assets pre-money valuation is US $800 000 comprising of the cost of submarine and an accompanying vessel. Projected valuation of the business after first year of operation is expected to be US$ 3 100 000 - $3 200 000 approximately.
The business equity / collateral will compile of the value of the Tourist Submarine itself
(US $1 900 000), operational assets, such as floating pontoons, maintenance / safety equipment and tourists transportation means (US $150 000), as well as, the value of the commercial Surface Vessel (US $200 000) which is a compulsory part of the attraction.
 
EXECUTIVE SUMMARY
 
We are offering a Bucket list experience for customers who otherwise have no access to the underwater world, as well as, everyone will be able to enjoy a real submarine ride.

The aim of the project is to establish the Submarine Tours attraction based on Sunshine Coast Queensland, Australia. The Tourist Submarine will operate all year around performing 5 daily tours on average, taking visitors for 40 minutes dive at the best in Australia artificial reef / former warship HMAS Brisbane, located within 30 minutes travel time from the coast.
•    Sunshine Coast is enjoying consistent growth of domestic, interstate and international tourism (15.2%), reaching over 4 million visitors per year, which results in $2.8 billion being spent by travellers locally each year. It is a place of many social and sporting events. Due to its uniqueness, we identified Sunshine Coast as a prospective location for the attraction and completed environmental research into suitability of dive sites within the area.
Local government and the Australian Maritime Safety Authority have been consulted and as a result, a submarine, which is suitable for offshore diving, has been identified, inspected and acquired.
DownUnder  Submarines Pty. Ltd. has branched  out of a sole trading entity “Reef Jet Tours“, which has been providing Whale Watching tours on the Gold Coast for the last three years. As result, we have highly professional crew and maintenance networking in place. Additionally, our crew will undertake specific Submarine Pilot and maintenance training program provided by the Supplier based overseas and in Australia.
 
KEY STATISTICS
 
Breakeven point for Sunshine Coast based submarine is around 10 000 passengers per year.
One extra passenger on each tour adds up additional $150 000 of revenue each year.
An investment repayment time is 3 years.
The life expectancy of crucial components of the submarine after refit is 10+ years.
There are only 3 submarines which are suitable for offshore diving in the world, which will help to eliminate competition. 
It takes 2 years to build a new machine at the cost of 5 250 000 EUR.
 
 
BUSINESS MODEL

The business will operate from the Council's facilities on Mooloolaba River located just 5 minutes from the seaway. During night time, the submarine will be recharged and maintained at the Fish Markets pier nearby.
The Tourist Submarine will operate all year around performing 5 daily tours on average, taking visitors for 40 minutes dive at the best in Australia artificial reef / former warship HMAS Brisbane, located within 30 minutes travel time from the coast. Estimated down time for this business model is 60 days per year.
Customers will have access to point of sale (tickets, souvenirs and a tour's memos), toilets and a car park at the departure location. As well as, there are multiple dining facilities in the area. An additional floating pontoon (6 x20m) can be installed to facilitate embarking and disembarking.
Shuttle buses will operate between the departure location, major Hotels and Port of Brisbane.
In a long term perspective, we have identified other suitable dive sites, which will require an additional submarine to operate providing service on an interruption free basis.
 
The submarine will be accompanied by a Surface Vessel as a part of Safety Management Procedures, while on its way to a dive site. The Surface Vessel will carry safety equipment on board, as well as, it will provide safe conditions for submarine's re floating.  In addition, 2 divers, based on the Surface Vessel, will provide entertainment e.g., fish feeding and underwater photographing. 

Majority of ticket sales will be processed online vie our existing Bookeo / Stripe integrated system. Customers will be offered incentives in a form of discounts, to encourage booking online and to attend early morning tours.
We will work with the Tourism Queensland and the Australian Cruise Association, which will help us to develop a network of re-sellers and to tap into the Cruise Ships Industry. As the first of its kind business in Australia, it will attract attention of the media and multiple advertising platforms.
We will apply to local councils to have the submarine on display in major coastal locations in the lead up to opening of the attraction.
 
STRATEGY AND VISION
 
Our vision is to expand our services to other dive sites reinvesting funds in purchase of an additional machine. The time frame is between 3 and 5 years.
The revenue growth will be stimulated through improved tour's load rates and number of operational days as result of new services within sheltered waters at a discount, night dives, educational and customized tours.
Based on the company's experience, we'll be able to provide a formal training for Submarine Pilots and Maintenance Crew to interested parties in case of the business sale or expansion.
Partnering up with global companies, such as Sea World theme park (Roadshow Entertainment) and / or Underwater World (Merlin Entertainment) will provide extensive access to their advertising platforms.
Lastly, purchase of a bigger capacity machine (42 passengers) will result in higher profit margins. One extra passenger on each tour equals to $ 150 000 increase in revenue on yearly basic resulting in additional 1 - 1.5 million of profit per year.
 
MARKET OVERVIEW
 
The Tourist Submarine market overview is documented fully in our Pitch Deck.
Tourist Submarines are in constant demand, which is evident from data provided by Underwater Vehicles Inc. an official re seller of second hand and new submarines.
The market is expanding, in particular due to lower cost of second hand submarines, which became available, since major companies are upgrading their fleet. The recent example is Turkey, which has acquired fully refitted second hand submarine in 2016.
 
TARGET MARKET
 
We are targeting local and inbound visitors to Australia and Sunshine Coast in particular. Current numbers are reaching 4 million visitors per year and are growing at 15.2% rate according to the Hospitality Industry reports. Sunshine Coast holiday makers are spending over $2 800 000 000 on various types of entertainment each year.
Particularly, customers limited by their age or/and abilities will be able to enjoy underwater tours.
We'll have our services listed on the entertainment programs of Cruise Ships arriving at Port of Brisbane and Mooloolaba.
 
COMPETITIVE LANDSCAPE
 
The Submarine Tours attraction doesn't have competitors in Australia. There are companies at the Great Barrier Reef which are offering semi-submersible tours costing $150 as a part of a package.
Our tours are completely safe and suitable for all ages and have no limitations in regards to medical conditions due to ambient pressure provided by fully pressurized cabin, unlike any small (2-3 persons) underwater machines.
Comparing to diving operators charging at around $195 per person to access the site, Submarine Tours don't require specific preparation or equipment hire. It takes only 2 hours of customer's time, unlike half a day with a diving operator.
 
WHO IS BEHIND IT
 
Andrey Alexeenko - Director
Borja Oriol - Submarine's designer / engineer, Spain
Jose Ramon Regueira - Sales Manager (Nodosa Shipyard) Spain
Jonathan Newman - Director of Underwater Vehicles Inc. Canada
Sasha Alexeenko - IT, Marketing
Damien Catran - Skipper, Submarine Pilot, Chief of Operations
Shaun Thomas - Head of Operational Safety (Australian Maritime Safety Authority)
Jack Betton - Underwriter (Trident Marine Insurance)
Kerrianne Haggie - Sunshine Coast City Council


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