bspoketv is raising on a Crowd SAFE at an $8M valuation cap with a 20% discount. As reflected in the middle-of-the-road price rating, this valuation was deemed typical by the investment team given the capital intensity of the product as well as the approximated margins. For example, another digital advertising company raising on Republic at approximately the same stage, was valued at $10M. However, bspoketv is still pre-revenue. At an $8M valuation cap, that’s something investors should be aware of.

bspoketv’s total addressable market is quite large and growing. Globally, the social media advertising market is expected to reach $37.9B this year with an annual growth rate of 7.9%.  A market this large is a double-edged sword. Theoretically, capturing just 5% makes for a large obtainable market of $18M. However, with a market this large you are bound to run into significant competition. Granted, an exact obtainable market is difficult to capture, especially with two revenue streams: advertising and commissions.

Co-founder Michael Dutcher brings to the table almost 12 years of relevant industry experience as a strategic advisor for WhereverTV. Though he does not have any past experience as an entrepreneur — and consequently no successful prior exits as a founder — he was an early employee at the latter mentioned WhereverTV which underwent a “reverse merger.”

He is joined by co-founder and CFO, Jason Dodo. Jason has served as CEO for multiple companies in the past, even starting his own company which sold beauty products through infomercials. He holds a degree in Accounting and Finance from the University of Witwatersrand.

The combined industry and entrepreneurial maturity of these two co-founders, in addition to their complementary skill sets, made the company’s team score one of its highest.

As mentioned, social media advertising is undoubtedly a crowded space. Influencer marketing is heavily trending and on an upward trajectory. Among bspoketv’s more established competitors are TBD and fashiontv, which has been around since 1997. Additionally, there is a large number of independent youtube and social media influencers that serve as tangential competition. 

The bspoketv team claims to differentiate on price, broadcasting affiliates, brand ad units, and brand-aligned ad pricing. Though it does appear that these claims are substantiated, defensibility is low. Additionally, these more established competitors suggest that while the space is ripe for disruption, bspoketv’s solution may be on a downtrend, especially as we move away from cable.

According to its Form C, bspoketv is still pre-revenue. The team claims to have over 25 million homes serviced, 26 million content creator subscribers, and 2.2 billion views. The lack of revenue paired with this solid user base indicates that bspoketv has yet to monetize its product. However, the company also reported low levels of debt. These factors balance out to give the company a middling score in performance.

bspoketv appears to be rolling back the clock as opposed to innovating. Adding to television streaming channels in the 21st century in some ways sounds as ridiculous as modifying the pager or telephone landlines. While the influencer market is booming, the viewership that influencers attract — Gen-Z in particular — is likely the last market segment willing to flip on cable. Fashiontv, one of the most direct competitors, appears to be flailing. In fact, bspoketv directly compares itself to Bravo, a network established in the 80s that can only be accessed with cable or live tv add-ons — a sure sign that this market is behind the times.

Considering that the majority of competition has been around for decades, this market could prove ripe for disruption. bspoketv certainly offers a refreshing approach to DtC advertising, differentiating it among both the traditional social media influencer strategies and outdated cable advertising. Not to mention the significant traction to date, with over 25 million homes serviced, 26 million content creator subscribers, and 2.2 billion views. Finally, the founding team is composed of industry veterans, mitigating some of the risks that come with the deal.

bspoketv has been rated a Neutral Deal. Despite having a strong founding team and appropriate terms, there is very little substantiated traction. Also of concern is the product-market fit. The social media advertising market is large and influencer marketing is trending. But is returning to cable a step in the right direction? Time will tell.

Additionally, with a large market comes competition. Though bspoketv is differentiated, defensibility is low, especially when the playing field consists of incumbents that have been around since the 90s. This is a sign that the space could be outdated and stale. 

Altogether, the potential for a return on investment and risks seem to balance out, making this company a neutral deal. For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out at support@kingscrowd.com.

Analysis written by Olivia Strobl