GenesisAI

Early Stage

The Global AI Network. Buy and sell AI technologies at scale.

Analytics

Raised to Date: Raised: $3,251,640

Aggregate Commitments $

Platform

Netcapital

Start Date

04/08/2021

Close Date

07/16/2021

Min. Goal

$10,009

Max. Goal

$3,800,006

Min. Investment

$100

Security Type

Equity - Common

Funding Type

RegCF / RegD 506(C)

Series

Seed

Pre-Money Valuation

$49,026,348

Rolling Commitments $

Status
Funded
Reporting Date

07/31/2021

Days Remaining
Funded
% of Min. Goal

32,486%

% of Max. Goal

86%

Likelihood of Max
Funded
Avg. Daily Raise

$32,845

Momentum
Funded
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Location

Miami, Florida

Industry

Business Services, Software, & Applications

Tech Sector

MarketplaceTech

Distribution Model

B2B/B2C

Margin

High

Capital Intensity

Low

Business Type

High Growth

GenesisAI, with a valuation of $49.02 million, is raising funds on NetCapital. The company provides a global AI network to buy and sell artificial intelligence technologies. GenesisAI is a machine learning protocol, in addition to being a marketplace for AI products and services. It is making AI accessible, affordable, and more efficient. GenesisAI was founded by Archil Cheishvili, David Fan, and Mina Pascalito Nassif in 2018. The proceeds of the current round of crowdfunding, with a minimum goal of $10,009.30 and a maximum goal of $1,070,000, will be used towards payroll, sales and marketing, accounting, and legal expenses. GenesisAI already has agreements with more than 20 AI firms and has the potential to become one of the most valuable technology companies of all time.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$0

$0

COGS

$0

$0

Tax

$0

$0

 

 

Net Income

$-183,454

$-61,790

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$29,694

$70,501

Accounts Receivable

$15,500

$0

Total Assets

$45,194

$70,501

Short-Term Debt

$0

$0

Long-Term Debt

$0

$0

Total Liabilities

$0

$0

Financials as of: 04/08/2021
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Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
GenesisAI 07/16/2021 Netcapital $49,026,348 $3,251,640 Equity - Common Funded RegCF
GenesisAI 03/22/2021 Netcapital $12,471,815 $1,070,000 Equity - Common Funded RegCF
GenesisAI 03/21/2020 Wefunder $7,500,000 $738,640 SAFE Funded RegCF
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Ratings

Analyst Report

Synopsis

Artificial Intelligence (AI) is transforming the corporate world. Accenture predicts that AI could double global economic growth rates by 2035. PriceWaterhouseCoopers predicts that all sectors of the economy could see at least 10% growth in the next decade as a result of AI adoption. Generally speaking, AI doesn’t replace the kind of common sense thinking human workers are readily capable of, but it greatly improves analysis of vast quantities of data, which is useful in our increasingly data-heavy world.

For all of its strengths, AI faces significant obstacles to widespread adoption. GenesisAI is planning to address those challenges by providing a global network for buying and selling AI tech. It is creating a platform which will allow AI creators to host and monetize their programs. AI on the network will also be able to communicate and learn from other AI programs, increasing effectiveness and efficiency. GenesisAI is also developing its own machine learning protocol which it could presumably offer on its own marketplace.

GenesisAI’s current Netcapital raise has been rated an Underweight Deal by the KingsCrowd investment team. This raise follows up on a previous Netcapital raise which was rated a Neutral Deal.

Price

The extravagant price is the primary driver of this raise’s deal rating. GenesisAI is raising through common equity at a pre-money valuation of $49,026,348. This valuation is nearly four times more than the company’s pre-money valuation from its previous raise — which only ended in March 2021. There hasn’t been any notable progress from the company since the last raise that would justify this massive increase. Therefore, GenesisAI scores extremely poorly in the price metric.

Market

AI is one of those markets that is expected to absolutely skyrocket as more and more companies see the benefits of AI adoption. The global market was valued at $39.9 billion in 2019 and is predicted to see a CAGR of 42.2% from 2020 to 2027, so within a decade we could be looking at a market worth trillions. As GenesisAI will be engaging in asset management, its total addressable share of that market will be considerably smaller. Think of it as a marketplace for members of the market to offer their services, like Amazon or Craigslist. GenesisAI would be collecting what are essentially hosting fees around 30%. However, even with this smaller niche, the company is still targeting a vast and growing market. The market score for GenesisAI is its highest across all five metrics as a result.

Team

While the team boasts impressive credentials even for a tech startup, there are some warning flags investors should know. CEO and co-founder Archil Cheishvili holds a Bachelor of Arts in Economics from prestigious Harvard University. After spending a short time working with investment management firm Bridgewater Associates, he dedicated his time to a restaurant he co-founded in the country of Georgia. Before moving on from that project, he founded Palatine Analytics, a tech startup focused on streamlining HR and management roles for companies, which he still runs. In 2018, he joined the International Development Fund for Economy and Culture — a small venture capital firm based in Germany — as vice president of artificial intelligence. He left the firm at the start of 2020, and it seems like the firm might have closed at this point, as its website has been taken down. Cheishvili started GenesisAI in late 2018 and has been running it simultaneously with his roles at Palatine and IDFEC. In fact, he maintains his role as CEO of Palatine, which splits his commitment.

David Fan is a co-founder and, like Cheishvili, was at Harvard from 2012 to 2016 while he earned his Bachelor of Arts in Applied Mathematics in Computer Science and Economics. He participated in various engineering and tech internship roles while at Harvard before joining Google as a software engineer in 2016. He worked with Google for three and a half years, apparently focused on developing ads for YouTube. After leaving Google in early 2020, he joined Prelay as a software engineer. Prelay is a startup focused on deal management for companies. Just as Cheishvili remains committed to Palatine, Fan remains committed to Prelay. The extent of his involvement with GenesisAI is unspecified.

Mena Gadalla also works with GenesisAI, though his involvement is likewise unspecified. Like his fellows, he is a Harvard graduate with a Master of Science in Computational Science and a Doctor of Philosophy in Physics and Applied Physics. Apart from a brief internship at Lam Research, he has published scientific papers and raised money in research grants but doesn’t have much in the way of corporate work experience.

Having three graduates from a prestigious school like Harvard is a plus for any startup. However, a lack of total commitment to the product as development is becoming essential is somewhat concerning, and the founders’ all being from the same school indicates they could have limited networks for business development purposes. Thus, GenesisAI’s team score is middle of the road.

Differentiators

Differentiation is another weak spot for GenesisAI. While the product is potentially game-changing, the company faces stiff competition from global behemoths Google and Amazon, both of which are working on their own AI marketplaces. Both tech giants provide AI services to consumers already, and Amazon in particular has extensive experience with hosting tech marketplaces. Put up against these giants with no patents held and little to distinguish its product from other potential offerings, GenesisAI faces a steep uphill climb to market dominance — or even market participation on a reasonable level. The company’s differentiators score is middling in reflection of these factors.

Performance

As the product is still in development, GenesisAI has nothing in the way of revenue to speak of. At the moment it also has little in the way of assets. Still, the company has accrued no debt, perhaps due to its impressive fundraising capabilities from a previous raise (around $1 million dollars last year). GenesisAI also garnered interest from 20 potential clients on the supply- and demand-side. While this interest is not the same as signing deals, it is as close as the company can get before providing an actual product. Bringing these data points together, GenesisAI’s performance score is mediocre.

Risks

As with any company with an innovative and untested idea, risks are high here. The product is still in the beta phase, which means there is no way to verify its potential and useability, and a lack of commitment from most of the team is worrying. The biggest concern here is whether GenesisAI can overcome competition from much larger and better-funded competitors and establish itself as a dominant market player, which seems very much in doubt. Finally, given the product’s early stage of development, it is likely to be several years before investors see a return, if they ever do.

Bearish Outlook

There’s a lot of cause for caution with GenesisAI. In addition to an uncommitted team with limited work experience, there is little progress to show, and certainly nothing to justify the valuation’s skyrocket to four times its previous level. Investors should be leery of startups promising major results and showing little in the way of progress on the journey. This is especially true given that there is no proven product-market fit for an AI marketplace. Unless GenesisAI does reach its stratospheric projections, investors are unlikely to see significant returns on their money. As of now, there is little evidence that indicates GenesisAI will achieve its lofty goals.

Bullish Outlook

As artificial intelligence drives prosperity around the globe, a service that can open these services to easy monetization and cooperative learning truly could be a game-changer. If GenesisAI can deliver on its promises and carve out a substantial niche for itself, it could grow to be a large company with impressive revenue. However, it’s important to note that the company would need to surpass well-established and name-brand competitors in order to achieve such success.

Executive Summary

GenesisAI is creating a global network to buy and sell artificial intelligence technologies, allowing a tech that historically operates in a closed system access to the worldwide market. It also is developing its own machine learning protocol.

While its potential is high, Genesis faces stiff competition from tech giants seeking to build AI marketplaces as well. The company’s executives are not fully committed, never a good sign for potential investors. After a recent successful raise (that ended only a month ago) but little else in measurable progress, the valuation has shot to stratospheric heights. While the potential for a planet-spanning network for AI services has indisputable appeal to those excited for the advancement of AI, there are viability concerns that cast doubt on whether GenesisAI can corner a market that, as yet, doesn’t exist. For all of these reasons, GenesisAI has been rated an Underweight Deal.

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

Analysis written by Benjamin Potts.

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