CLIPr is raising capital via Crowd SAFE with a valuation of $30 million and no discount. Based solely on 2021 revenue of $9,030, this valuation is high beyond justification. However, according to the founder, the company could potentially generate $500,000 to $1 million by the end of this year. Earning $1 million would yield a 30x valuation-to-revenue multiple by the end of 2022. But even that multiple would be above the average software industry multiple. The valuation should be considered excessive for investors.

The North American video analytics market was worth $2.2 billion in 2021, with the global market growing rapidly at 23.8% annually. Even though CLIPr is in a fairly new vertical and does not have much competition, the market potential is significant. 

Current trends definitely boost the market’s rapid expansion. With audiences having shorter attention spans nowadays, technologies such as video analytics are crucial to keeping content short and engaging. 

Aside from that, another massive global trend is driving market growth: remote work. Although some companies have returned to in-person work settings, the world is moving toward a remote or hybrid working environment. There are lots of benefits with working remotely, as I can testify myself. And along with remote working environments come more recorded meetings, events, and webinars. When employees want to go back to these recordings to access certain information, it is very time consuming. Hence, demand for video analytics technology keeps rising in order to quickly and efficiently access information from this rising tide of video recordings. All in all, CLIPr’s market opportunity is massive and evidently growing.

CLIPr is led by three co-founders. CEO Humphrey Chen has more than two decades of experience in strategic, business management, and product management positions. He has been on the board of advisors for multiple companies, such as GreyMeta, VidMob, Dialpad, and Noom. Chen was also a part of the product teams for Amazon Web Services (AWS) and Verizon Wireless. Particularly, he used to lead Amazon’s Rekognition, which enables users to extract information and insights from videos utilizing machine learning. Chen’s deep knowledge of Amazon Rekognition is crucial for CLIPr’s product development, as CLIPr itself utilizes AWS machine-learning services, including Rekognition. Overall, Chen’s impressive mix of experiences sets him up to lead CLIPr very well, especially in the areas of operations and product development. 

Chief Technology Officer Aaron Sloman spent more than 16 years in technology roles with the Department of Internal Affairs, Unisys Corp, and Microsoft. In recent years, he has been more involved in the management side of multiple businesses. Notably, he co-founded Ximble, a cloud-based staff scheduling and time tracking solution. The company was acquired by PayCor in mid-2019. Although Ximble wasn’t in the same industry as CLIPr, Sloman demonstrated his ability to bring a company to success. 

Lastly, Chief Operating Officer Cindy Chin has a long track record (more than three decades) of being an advisor and mentor for multiple companies. She has worked with notable companies such as AVA, Vault12, Google, and NASA. She also has a bit of marketing and artificial intelligence experience. Chin seems quite fluent in business operations and management. Her involvement with many organizations and businesses could greatly benefit CLIPr, whether it’s simply by expanding the company’s network or connecting with potential customers. 

CLIPr has seven team members total. The team has a nice mix of basic skills across finance, operations, and technology. CLIPr might need to expand its team in the near future, especially in technology, as the company’s main product is software. With only a few people building the technology, the product will not scale fast enough. Nevertheless, CLIPr has a very solid team for its current stage.

CLIPr is indexing videos and creating an automated table of contents. Although it doesn’t have many direct competitors, some indirect competitors include Rewatch and Otter.ai. These companies offer video transcription, but there are some key differences from CLIPr’s services. Rewatch features an organized video library in which videos are searchable by transcription. Otter.ai focuses on transcribing live meetings, which also includes speaker identification and advanced summary. Neither competitor generates a table of contents that consists of topics, subtopics, and important moments, which is a huge key advantage for CLIPr. In comparison, CLIPr’s automated table of contents serves users with greater customization and convenience. 

Additionally, CLIPr is in beta program with Microsoft Teams, developing another feature that would compete with Otter.ai: CLIPr connector, which enables recorded meetings to be highlighted and referred to during team chats. This beta program consists of a simple video indexation, yet it is greatly valuable because it elevates the remote working experience by enriching the communication process. Combined with the company’s differentiated table of contents, CLIPr connector would make a strong case for CLIPr to win the market. 

On a side note, if you Googled “video indexing software,” one of the first results will probably be Azure Video Indexer. And just like I did, you might ask, “Is CLIPr competing against Microsoft?” You might think, “This is not good. CLIPr doesn’t stand a chance.” 

But a discussion with Humphrey Chen made it clear that CLIPr is not competing against Azure. According to Chen, “Azure’s Video Indexer is a demo site to illustrate to developers what they can build with [Azure’s] API.” Azure’s actual direct competitor is Amazon’s Rekognition, which is a serviceCLIPr uses. Both Azure Video Indexer and Amazon Rekognition are catered to the developer community, people who know how to code and work with application programming interfaces (APIs). While Azure lets anyone play around with this service for 40 hours, end users eventually have to purchase a subscription, which includes computing, storage, databases, etc. 

On the other hand, CLIPr provides tools for end users (i.e., event managers, enterprises, and publishers) to generate an automated table of contents without the need to code. CLIPr also makes it easier for its customers to get analytics on their audience engagement metrics. The key point here is that CLIPr is a business solution targeting publishers and enterprises with products, whereas Azure and Amazon Rekognition API specifically serve developers as additional technology. Therefore, CLIPr is not a competitor to Azure or Amazon Rekognition API

Overall, in this new vertical, CLIPr has only a handful of indirect competitors. Moreover, its platform has a key advantage in generating an automated table of contents based on video transcription and machine learning. Seeing as its indirect competitors don’t currently offer this product feature, CLIPr could potentially become the market leader.

CLIPr has a significant amount of short-term debt and long-term debt at $2.2 million and $4.6 million respectively. The team has clarified that these debts are convertible notes that are going to convert into equity in around a year and a half. Thus, CLIPr’s liabilities should not be a concern for investors. Based on the Form C, the company experienced a huge amount of net losses at $4.3 million in 2021. While this seems worrisome, the financial statement shows that the majority of these costs were due to research and development. Investment toward product expansion at this stage is favorable, as finishing a product and getting it out is always a priority. Additionally, CLIPr has successfully raised $6.3 million in prior funding rounds, demonstrating the team’s ability to raise funds. 

CLIPr currently has eight active companies as customers and four that are in the process of onboarding. Some notable companies include Geist M, Harvard Business School, Poly (also an investor), and Questex. These companies are on contracts that are renewed annually with three-year terms, which indicates hoped-for customer stickiness. Each contract earns revenue ranging from $5,000 to $40,000, with potential to convert into a bigger contract ranging from $25,000 to $125,000 once the tech proves itself useful to the wider company. 

CLIPr has 50 companies in the pipeline, and its records show a 50% conversion rate to the freemium model and 20% conversion rate to the paid subscription model. It aims to sign three to five large deals per month for the rest of 2022. The company predicts it will reach $500,000 to $1 million in revenue by the end of 2022. The company is actively in discussions with numerous potential customers, including large publications such as The Economist and Financial Times. CLIPr’s beta program with Microsoft Teams further highlights potential demand for the company’s technology. 

While all of this shows CLIPR’s huge potential, its projected revenue is just decent for a company that has been operating for two years. There isn’t a lot of proven demand from CLIPr’s target market yet. In order to be sure of the market demand, investors would need to see more traction. Said traction could include landing a big publishing company, expansion of contract size, or higher revenue numbers by converting more customers from the freemium model to the paid subscription model. 

Overall, CLIPr is a low-risk investment opportunity. The company’s product is ready to scale commercially. It has already passed the phase of training its machine learning model that is very human-intensive. 

However, investors should note that the current valuation is quite inflated, even with estimated revenue of $1 million for 2022. This investment term risk could diminish if the company achieves its revenue goals for this year and uses 2022 as a springboard for rapid revenue growth in 2023. 

Other than that, CLIPr has notable market risk. Since it lives in a fairly new vertical, there is not much product awareness in the market. Thus, the company has to educate the market that its solution exists, and this could mean a slow market adoption. Doing so could be difficult, as the company has not quite nailed down its product-market fit yet. The founder states CLIPr found its niche market in the publishing industry. But it seems to still be dipping its feet in multiple industries and having discussions with many companies without a clear idea of which industry will prove most receptive to its technology. Therefore, it could take some time until CLIPr figures out its product-market fit.

The video analytics vertical is still fairly new, so CLIPr needs to educate the market about its solution and raise awareness that it exists. There is a lot of room for the market to figure out the best use cases for CLIPr’s technology, as it is quite versatile. Consequently, CLIPr seems to be in the process of having discussions with as many companies as possible across different industries. 

It seems that CLIPr has not quite nailed down its product-market fit, as it’s still gauging which industry has the biggest appetite for its technology. Despite the many discussions it is currently having, the company has not proven there is significant demand for its platform. Moreover, the current revenue projection for the end of 2022 — somewhere between $500,000 to $1 million — is on the lower end for a startup with a $30 million valuation.

CLIPr’s attraction as an investment opportunity largely stems from its technology solution. The company exists in a fairly new vertical, meaning there are only a few indirect (and no direct) competitors. None of them make video content efficiently searchable, customizable, and shareable quite like CLIPr. 

At the same time, the CLIPr’s target market is massive and growing rapidly, fueled by a rising adoption of remote work environments and recorded meetings. With its strong differentiation, CLIPr could potentially become a leader of a substantial market. 

The company is built and operated by a solid team that has an excellent mix of skills. Product development and quality is a given, considering CLIPr’s CEO is an expert in the area. Additionally, all of the co-founders have deep business operation and management experience. 

CLIPr raised a significant amount of prior funding at $6.3 million, demonstrating both its appeal to people outside the company and its ability to secure capital for developing the company. It has a decent amount of active customers currently that could potentially turn into bigger contract sizes and another 50 companies in the pipeline. Among major potential customers are The Economist and Financial Times.

CLIPr’s platform transcribes and indexes video content in order to make videos searchable. The company uses machine learning to generate an automated table of contents consisting of topics, subtopics, and important moments. CLIPr has not nailed down its product-market fit quite yet and might experience slow market adoption as its vertical is fairly new. At a valuation of $30 million, the company is also quite overvalued. 

Nevertheless, CLIPr offers an amazing technology solution. Its ability to generate tables of contents for videos is a key advantage, and none of its indirect competitors offer equal solutions. CLIPr has acquired major customers, such as Questex and Poly, and has an extensive pipeline of possible future customers already in place. The market CLIPr’s riding is massive and growing rapidly. Additionally, the company is led and operated by a team with an excellent mix of skills and backgrounds. All in all, CLIPr is a Deal to Watch. 

For questions regarding the KingsCrowd analyst report or ratings for this company, please reach out to support@kingscrowd.com.

Analysis written by Inez Sanjaya, August 15, 2022.