Commerce.AI

Commerce.AI

Early Stage

Artificial intelligence to power next generation commerce

Artificial intelligence to power next generation commerce

Overview

Raised this Round: Raised: $1,069,995

Total Commitments ($USD)

Platform

StartEngine

Start Date

12/19/2019

Close Date

06/15/2020

Min. Goal
$10,000
Max. Goal
$1,070,000
Min. Investment

$300

Security Type

Equity - Common

Series

Series A

SEC Filing Type

RegCF    Open SEC Filing

Price Per Share

$2.00

Pre-Money Valuation

$25,982,318

Year Founded

2014

Industry

Business Services, Software, & Applications

Tech Sector

EnterpriseTech

Distribution Model

B2B

Margin

High

Capital Intensity

Low

Location

Sunnyvale, California

Business Type

High Growth

Commerce.AI is raising funds on StartEngine via Equity with a $26M valuation. Commerce.AI harnesses the power of AI and Big Data to give brands and corporations the ability to see what does and doesn't work with products. In a world where over 80% of the 30,000 new products introduced fail, Commerce.AI is helping teams find what product features work best and to let teams focus on just building great products and selling them with confidence. The startup has built an impressive customer base in Walmart, Coca-Cola, Chanel, and numerous other high profile brands. The minimum investment is $300 and the team has raised a little over $17k to date with a minimum offering of $10k.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$356,000

$240,000

COGS

$137,318

$48,647

Tax

$0

$0

 

 

Net Income

$-262,770

$-162,616

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$204,386

$700,173

Accounts Receivable

$0

$0

Total Assets

$882,904

$958,767

Short-Term Debt

$800

$800

Long-Term Debt

$71,942

$71,942

Total Liabilities

$72,742

$72,742

Financials as of: 12/19/2019
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Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
Commerce.AI 06/14/2020 StartEngine $25,982,318 $1,069,995 Equity - Common Funded RegCF
Commerce.AI 12/26/2017 SeedInvest $8,000,000 $350,000 Convertible Note Funded RegD 506(c)
Commerce.AI 12/22/2017 SeedInvest $8,000,000 $787,900 Convertible Note 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

Commerce.AI 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.

 

Much like the introduction of electricity in the early 20th century, Artificial Intelligence (AI) is proving to be a highly disruptive invention. AI has already found applications in various industries and influenced the way we communicate, work, and shop. Businesses are deploying AI to maintain a competitive advantage. Companies like Amazon and Google are in the forefront of this innovation, deploying AI to disrupt their own competitive environment. Amazon is the ultimate disrupter, and they are utilizing AI to recommend products to customers based on what they have liked or bought. Their AI voice product, Alexa, is a virtual assistant capable of voice interaction, setting alarms, playing audiobooks, and other functions. Meanwhile Google, the household name in Internet searches, is using AI to accumulate all the information available on the Internet to make it readily accessible and to make searches more efficient.

Next Section: Problem

Problem

Research and development for new consumer products is expensive and time consuming for companies. There is a tremendous amount of data on the internet that needs to be quickly sorted and analyzed in order for companies to draw insight and value from it. According to Harvard Business School professor Clayton Christensen, “each year more than 30,000 new consumer products are launched and 80% of them fail because they postpone the hard work of getting ready to market them until too late in the game.”  

Next Section: Solution

Solution

Commerce.AI is a firm that deploys AI, with Deep Learning technology, to sort through product information like texts, comments, reviews, videos, audio files, and images to help retailers and brands understand what customers are saying about products at a granular level. When the AI understands which product features work well, it helps companies understand what their customers are seeking. This information in turns helps companies in building better products, predicting recalls, or minimizing returns. By analyzing such data, Commerce AI has the tools to provide improvement suggestions for many segments in a company, from merchandising, branding, and product management to digital marketing, packaging and market research. 

 

Commerce.AI’s website is very well designed and simple, yet still provides important information for clients to understand the value of the service. There are also various use cases, showing specific results the technology can provide, like comparing products across brands, tracking competition, detecting abnormal customer behavior, or analyzing store performance. These details could help companies warm up to the idea of replacing existing manual processes or beginning a new practice to get them ahead of the competition. 

Next Section: Other

Market

According to Grand View Research Inc, the global artificial Intelligence market size is expected to reach $390.9 billion by 2025 and to grow at a CAGR of 46.2% from 2019 to 2025. They state that AI is a revolutionary technological development, and its integration across a host of applications is one of the key factors driving this market. The market has evolved due to a massive amount of data that needs to be compiled and analyzed. 

Commerce.AI is in the Deep Learning segment of the Artificial Intelligence market, which was worth $2.28 Billion in 2017 and is expected to reach $18.16 Billion by 2023 at a CAGR of 41.7% from 2018 to 2023. In the following diagram, McKinsey estimates AI techniques have the potential to create between $3.5T and $5.8T in value annually across nine business functions in 19 industries, of which Retail looks to benefit the most.

From a public markets perspective, analyzing the popular AI exchange-traded fund (ETF) displays the tremendous opportunities and excitement amongst investors in this space. An ETF is traded on the exchange, contains baskets of different types of securities (E.g. Stocks, bonds, commodities), and offers the investor exposure to a specific sector or index.

The Roboglobal Artificial Index ETF (THNQ) has had an incredible run as we can see from the chart.   The index is primarily comprised of companies which are deploying AI to enhance their user experience. It is not surprising that we see Amazon and Alphabet on this list, as they are leaning on AI to drive their growth. Stock market investors are gravitating from slower growth to higher growth companies that are deploying the latest technologies and assigning higher valuation to them, such as AMZN (recent earnings reflect 20% YoY revenue growth in 2018-19) and Wix (29% YoY revenue growth). Over time, as pure AI-based private companies like Commerce.AI or Genesis AI go public, new AI indices and ETFs will develop with more segmented plays.  

 

 

Next Section: Other

Management

Commerce.AI is led by a talented team of Stanford and MIT graduates, data scientists, and an experienced entrepreneur. CEO Andy Pandharikar is a serial entrepreneur whose previous startup Myntra, acquired by Flipkart group, was later sold to Walmart for $16B. Back in 2016, Andy used his understanding of how vital the implementation of AI could be in this space, and he pitched Commerce.AI to Walmart.

Lu Feng is a Co-Founder and the Head of Data Science. She has a strong background, having a Phd from MIT as well as a long stint there as a Researcher. 

Goncalo Gil is the Co-Founder and Head of AI for Commerce.AI. Before finishing his Ph.D from Stanford, Goncalo was a successful tech entrepreneur. He has a Master’s degree in Aerospace Engineering and a Doctorate in Philosophy from Stanford University.

Nate Orlin is the Co-founder of Commerce.AI and Head of Engineering. He is a Stanford graduate and spent four years at IBM in work related to IBM Watson. He has a deep passion for technology systems and architecture. Before that, he worked at Cisco with Pandiharikar.

This team has worked together before and is determined to make AI work for humans. The management team has a strong track record of success, excellence, and expertise in the AI space and can likely execute on their vision.

Next Section: Why We Like it

Why We Like it

  • Strong Management: Collectively the Commerce.AI team is distinguished and includes a serial entrepreneur, data scientists, and Master’s degrees at some prestigious universities such as MIT and Stanford. Their work experience in the corporate world includes IBM Watson and Flipkart (now Walmart). To reiterate, this team has worked well together in the past and likely will continue to do so. 

 

  • Proven Customer Base: In the face of increasing competition, Commerce.AI has managed to carve out a niche and been able to differentiate their product, acquiring some notable customers in the process. Their paying customers include an elite list of Fortune 500 companies including Walmart, Coca-Cola, Unilever, Chanel, Netgear, USPS, Cisco, and more. 

 

 

  • Exit Opportunities: AI is a great industry for exit opportunities and could yield great early returns. Previous round investors for Commerce.AI include DeNA, Plug & Play Ventures, and the SI Selections Fund. An exit plan is certainly possible, which could be a sale to one of their existing customers like Walmart. An IPO is also feasible, as this company has strong revenues and an existing customer base.

 

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Commerce.AI on StartEngine
Platform: StartEngine
Security Type: Equity - Common
Valuation: $25,982,318
Price per Share: $2.00

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