Axle.ai

Axle.ai

Early Stage

Video software in your browser that remotely manages, transcribes and searches

Video software in your browser that remotely manages, transcribes and searches

Overview

Raised this Round: Raised: $107,000

Total Commitments ($USD)

Platform

Republic

Start Date

03/15/2020

Close Date

06/24/2020

Min. Goal
$25,000
Max. Goal
$107,000
Min. Investment

$100

Security Type

SAFE

Series

Pre-Seed

SEC Filing Type

RegCF    Open SEC Filing

Valuation Cap

$7,000,000

Discount

20%

Year Founded

2018

Industry

Media, Entertainment & Publishing

Tech Sector

MediaTech

Distribution Model

B2B

Margin

High

Capital Intensity

Low

Location

Boston, Massachusetts

Business Type

High Growth

Axle.ai, with a $7 million valuation cap, is raising funds on Republic. It is a video software company that helps media teams manage, transcribe, and search their video content remotely. The platform uses machine learning technology and software development tools for the purpose and has been used by teams across sports, political, church, corporate, and educational markets. Axle.ai was founded by Patrice Gouttebel, Sam Bogoch, and Katy Scott in July 2018. The current crowdfunding round of the company has a minimum goal of $25,000 and a maximum goal of $107,000. Axle.ai has more than 600 paid customers, including Paramount, Patagonia, and PWC, and reported revenues of $854,000 in 2019, up from $792,000 in 2018.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$853,807

$792,018

COGS

$88,102

$792,018

Tax

$0

$0

 

 

Net Income

$-248,808

$-270,403

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$-4,435

$38,753

Accounts Receivable

$162,635

$124,480

Total Assets

$159,498

$164,531

Short-Term Debt

$137,211

$26,472

Long-Term Debt

$447,433

$150,000

Total Liabilities

$584,644

$176,472

Financials as of: 03/15/2020
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Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
Axle.ai 09/27/2021 Republic $9,000,000 $485,095 SAFE Funded RegCF
Axle.ai 06/23/2020 Republic $7,000,000 $107,000 SAFE Funded RegCF
Axle.ai 12/13/2018 SeedInvest - $0 Debt Not Funded RegCF / RegD 506(c)
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Revenue History

Note: Revenue data points reflect the latest of either the most recent fiscal year's financials, or updated revenues directly from the founder, at each raise's close date.

Valuation History

Price per Share History

Note: Share prices shown in earlier rounds may not be indicative of any stock splits.

Employee History

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Analyst Report Analyst Report Methodology Article

Summary

The Axle.ai team has been selected as a “Top Deal” by KingsCrowd. This distinction is reserved for deals selected into the top 10% of our due diligence funnel. If you have questions regarding our deal diligence and selection methodology please reach out to hello@kingscrowd.com.

Next Section: Problem

Problem

Fueled by the global rise of video as a preferred communication medium of choice, enterprise clients around the world already spend roughly $10 billion each year on video-content management solutions — a market that’s expected to continue growing at a healthy 10% annual clip for the next several years. While a significant portion of that total is reserved for related hardware storage products, the majority — more than 70% — is being allocated toward innovative, higher-margin video-content management software solutions.

 

It might seem an impossible task for relatively small start-ups to muscle their way into such a well-established, highly competitive space. However, there are still clear shortfalls to the industry’s existing solutions for professional media teams of all sizes. Many such products tend to be highly specialized and are often prohibitively expensive, costing upwards of $50,000 or more. Even then, few effectively address the daunting tasks of searching, organizing, and truly understanding the information contained in the world’s growing hordes of high-quality video content.

 

As a result, with a lack of useful digital context in their files, many media teams spend inordinate amounts of time searching for or even recreating video content they’ve already made. The industry needs software solutions that can more seamlessly solve these problems at a reasonable price.

Next Section: Solution

Solution

That’s where Axle.ai’s three core products come into play. 

 

First, supported by cutting-edge artificial intelligence and machine-learning algorithms, the company’s namesake axle ai software is capable of autonomously searching, tagging, and managing video media through an intuitive browser interface. Much to the delight of its more than 600 clients, axle ai doesn’t require migrating existing media libraries to a proprietary file system to work. As long as the software can read the files and folders customers want it to manage, axle ai will automatically create low-bandwidth proxies accessible via any web browser, regardless of where the files are stored or what operating system is being used.

 

Next, in late 2018 Axle.ai introduced its connectr.ai visual workflow tool, which enables users to build and deploy automated video processes through a drag-and-drop graphical user interface with minimal coding knowledge. These processes include things like automatically applying common metadata, video encoding, archiving media on storage, and uploading files to a local network or the cloud. Previously, media teams would often need to enlist software engineers to create expensive custom solutions to help them realize the efficiencies of such process automation.

 

Finally, in November 2019 at the annual Adobe MAX conference, Axle.ai launched its third primary product, ascribe.ai, a speech transcription service plug-in that operates within Adobe Premier Pro. Ascribe.ai was notably built with the same speech technology used by the company’s core axle ai media-management software. In contrast to axle ai and connectr.ai, which are priced on a per-user license model (a two-user license of axle ai 2019 currently costs just under $3,000, for example), ascribe.ai follows a “freemium” pricing approach through which users are given one hour of transcription services for free. After that, they have the option of upgrading to subscription plans ranging from $4.95 per month (for 2.5 hours) to $120 per month (for 80 hours). With even the least expensive option providing transcription services for less than $2 per hour of footage, and with each minute of footage taking as little as 10 seconds to return results to the Premier interface, the Axle.ai team lauds ascribe.ai as offering the “best price-performance of any speech transcription platform available today.”

Next Section: Other

A High Margin Software Business

Speaking of sales, all three of Axle.ai’s products are already contributing to the top line. The company recorded revenue of $853,807 in fiscal 2019, showing good for year-over-year growth of roughly 7.8% despite introducing ascribe.ai late in the year. At the same time, Axle.ai has yet to achieve sustained profitability, incurring an annual net loss of $248,808 after recording operating expenses of just over $1 million in 2019.

 

However, the potential for juicier net profits is there. After transitioning away from a mixed software/integration business approach and toward a pure software model last year, Axle.ai’s gross margin improved by a staggering 11 percentage points to 90%. 

 

If Axle.ai can effectively position its software offerings as reasonably priced cutting-edge solutions that cater to the fast-growing number of media teams seeking to make the most of their video libraries, it could scale at a rapid pace for years to come. If it can maintain those healthy gross margins when that happens, the company should be able to enjoy significant operating leverage as its top line grows.

Next Section: Other

An Enormous, Growing Market

We noted earlier that more than 70% of the $10 billion video-content management market is spent on innovative software solutions for the niche, which itself should serve as a tailwind for unique products like Axle.ai. The company should also benefit from steady declines in the cost of implementing viable video-content hardware storage solutions going forward, particularly as improved affordability of media storage products encourages growth in the number of small and medium-sized media teams.

 

We also mentioned above that Axle.ai already counts more than 600 such teams — generally from three to 30 people in size — among its paid customer base. But it’s not just smaller clients coming aboard. Axle.ai’s customers include top brands and industry powerhouses like Warner Brothers, Amazon, Facebook, Accenture, Coca-Cola, Patagonia, and PWC.

 

While you certainly won’t find Axle.ai management complaining about winning the hearts of their largest clients, there’s no denying small- and medium-sized customers represent a massive opportunity: The company believes its current total addressable market (TAM) is closer to 300,000 customers today, and further estimates its TAM could roughly double to 600,000 clients over the next four years. 

 

To that end, Axle.ai claims it’s enjoying “strong interest” from its mailing list of over 40,000 organically generated industry contacts, many of whom are finally realizing the potential benefits of implementing media-management software for the first time.

Next Section: Other

Capable Leadership

At the helm of Axle.ai co-founder and CEO Sam Bogoch, who previously worked for five years as Director for Software Development at publicly traded broadcast media solutions company Avid Technology. During his half-decade here, he helped to more than triple Avid’s sales from Interplay and Media Central products to $55 million. This experience also undoubtedly gave Bogoch a unique perspective on the shortcomings and underserved opportunities left vacant by more expensive enterprise-centric solutions from larger companies like Avid.

 

Fellow co-founder Patrice Gouttebel now serves as Axle.ai’s VP, Product Management — a logical transition given his previous role as product manager at digital asset management company SeeFile. Notably, Axle.ai’s team page claims Gouttebel boasts “extensive experience with web coding, user interface design, and perhaps most importantly, direct customer dialog.” This indicates he might simultaneously prove invaluable in a sales engineer-esque capacity by communicating to inquisitive customers the unique strengths of Axle.ai’s highly technical products.

 

Meanwhile, VP of Operations Katy Scott is the company’s third co-founder who continues to work in a managerial role, handling resource allocation, support and installation schedules, and company financials. Katy graduated from Fitchburg State University’s Media program and previously worked as a freelance photographer for eight years, bringing a unique perspective of the media industry clients to which Axle.ai caters.

 

Finally, co-founder and Lead Engineer Steven Ryan previously lended his years of software programming skills as Lead Programmer for digital asset management company SeeFile, developed compilers for enterprise engineering software company Intergraph, and built distributed computing and client-server programs for motion control and automation products specialist Torque Systems.

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Axle.ai on Republic
Platform: Republic
Security Type: SAFE
Valuation: $7,000,000

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