Kyndoo is currently raising at a valuation of $12 million. The company is offering investors a SAFE which will convert into future equity subject to a 20% discount. This valuation is in line with many other startups currently seeking funding. Additionally, the discount rate is attractive for investors, and the company does have some revenue to back up its valuation. Thus, Kyndoo’s price score is strong.

There is no doubt that influencer marketing is a growing market. However, estimates for the total size of the market vary wildly. According to one source, influencer marketing was valued at  $137 million in 2018 and was expected to grow to $373.5 million by 2027. A second source puts the market at being much larger, setting it at $6 billion in 2020. With a CAGR of 32%, that source suggests influencer marketing will reach $24 billion by 2025. Although these estimates are very different, they both suggest a small market that is growing at a rapid pace. Kyndoo is not creating an influencer marketing platform, so its actual obtainable market within this overall space may be slightly smaller. However, it seems likely that many brands will want to verify that an influencer is legitimate, so demand for the company’s product could still be high.

Balancing a small market against very high growth, Kyndoo’s market score is above average.

Kyndoo was founded by CEO Kelly McDonald and CTO Jin Yu. McDonald brings nearly a decade of various sales and operations positions. She worked for two years as vice president of sales and operations at Movoto and spent three years as a vice president and senior vice president of sales at RealtyShares. Her strong sales experience will likely give her insight into how companies use marketing to drive sales strategies, which could prove quite useful for Kyndoo. 

Jin Yu has five patents to his name and served as the CTO of software company AsiaInfo, a big data and AI solution provider. Yu was also VP of engineering and chief architect of ad technology provider OpenX, and he has a previous exit under his belt with his company Portaura. Yu has a strong combination of technical expertise and entrepreneurial experience that will likely prove indispensable to Kyndoo.

Kyndoo’s executive team is strong. McDonald has great experience in sales, and Yu brings previous startup (and exit) experience. Thus, the team score for Kyndoo is its highest across all five metrics.

Industry competitors like Trend and Intellifluence offer services to connect companies with potential influencers, but Kyndoo takes it a step further. Kyndoo also offers a ratings system and database that companies can access to thoroughly vet any potential business partners. Fake influencers are an issue on the rise, and Kyndoo’s product would allow companies to analyze the actual reach of an influencer before using Kyndoo’s services to work with that influencer.

Kyndoo’s comprehensive reports also limit the potential for public relations nightmares, one example occurring recently with Sephora. Kyndoo offers a full suite of products, which does diversify it from other companies in the influencer marketing and social media analytics space. The one concern with Kyndoo’s products currently is their lack of defensibility. The company has no patents to protect itself, and a competitor could choose to replicate its features if they prove successful. However, Kyndoo’s differentiators score is above average despite this worry.

Kyndoo’s revenue of $126k in the most recent fiscal year shows solid growth from previous years of operations. Early clients are returning at a 70% rate, and a majority of the company’s clients have come via client referrals. This shows that Kyndoo is becoming a known commodity in this space and has good word-of-mouth traction thus far. Kyndoo has also had solid success in previous rounds of funding, receiving funding from Gaingels, Bin Yang (Angel investor and Managing Partner at CVCapital), and 500 Startups.

Kyndoo has seen solid revenue growth and has backing from large investors, showing overall good performance early on in operations. Therefore, the company scores strongly in the performance metric.

While Kyndoo’s risk score is overall very low, there are some areas of concern. The company’s high valuation makes its investment terms and timing a risky play. There is no guarantee the company will deliver on such an ambitious valuation even if it does meet its 2021 revenue goals. Additionally, a SAFE is always slightly more risky for investors than equity. There is also added risk due to the rise in influencer marketing and social media analytics, meaning Kyndoo is entering into industries that are growing more crowded. Kyndoo does offer a solid product, but whether it will be enough to differentiate from other competitors remains to be seen.

With a valuation as high as Kyndoo’s relative to its revenue, current growth may not lead to a profitable investment. The company will have to surpass its own projections for growth if it intends to be a profitable play for investors. There is also the risk of more established competitors siphoning off too much of the market From Kyndoo, especially if they choose to replicate the company’s offering. Kyndoo will need to stay ahead of the competition, both in keeping its product differentiated and in growing its customer base, in order provide a return for investors.

The market for influencers is growing and therefore so is the market for a company to rate and analyze them. COVID-19 has been a huge boost for this space as a whole, and Kyndoo has solid enough traction and prior growth to indicate that the company is on an upward trend. Repeat clients and word of mouth are working to Kyndoo’s advantage, earning the company more clients. The backing from venture capitalists and seed accelerators is also promising for Kyndoo. With a strong executive team leading, Kyndoo seems well equipped to continue its growth and work to justify the current $12 million valuation.

Kyndoo is operating in a market that has grown greatly due to the pandemic and is projected to continue doing so. Kelly McDonald and Jin Yu make up a great executive team, with years of sales experience, startup experience, and exit experience under their belts. Prior rounds of funding have netted the company more than $300,000 in funding, and revenue grew to just over $126,000 in the most recent fiscal year. Kyndoo claims to have 30 brands paying for its service currently. However, competition continues to grow, and Kyndoo’s products are not highly defensible. The company will need to maintain a high level of momentum in order to establish itself as the go-to for influencer verification and connection. Thus, Kyndoo has been rated a Neutral Deal at this time.

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

Analysis written by Ethan Thomas.