Otherweb

Otherweb

Early Stage

AI for a junk-free internet

AI for a junk-free internet

Overview

Raised to Date: Raised: $990,000

Total Commitments ($USD)

Platform

Wefunder

Start Date

02/20/2023

Close Date

07/31/2023

Min. Goal
$50,000
Max. Goal
$990,000
Min. Investment

$100

Security Type

SAFE

Series

Seed

SEC Filing Type

RegCF    Open SEC Filing

Early Bird Val. Cap

$6,000,000

Valuation Cap

$8,000,000

Discount

0%

Rolling Commitments ($USD)

Status
Funded
Reporting Date

08/05/2023

Days Remaining
Funded
% of Min. Goal
Funded
% of Max. Goal
Funded
Likelihood of Max
Funded
Avg. Daily Raise

$6,188

# of Investors

1,398

Momentum
Funded
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Year Founded

2021

Industry

Business Services, Software, & Applications

Tech Sector

EnterpriseTech

Distribution Model

B2C

Margin

Medium

Capital Intensity

Low

Location

Round Rock, Texas

Business Type

High Growth

Otherweb, with a valuation of $8 million, is raising funds on Wefunder. The company has developed an AI-based walled garden of pristine information without the junk. The platform filters out all the junk and gives the users complete control over what appears in their feed by insulating them from the noise of the broader internet. Otherweb has a community of 93,000 active users and is doubling in size every two weeks on average. Alex Fink founded Otherweb in September 2021. The current crowdfunding campaign has a minimum target of $50,000 and a maximum target of $750,000. The campaign proceeds will be used to hire more engineers in Ukraine to speed up development, hire an in-house UX designer, increase the size of its web index, and cover AWS expenses.

Summary Profit and Loss Statement

FY 2022 FY 2021

Revenue

$113

$0

COGS

$0

$0

Tax

$650

$750

 

 

Net Income

$-158,930

$-6,093

Summary Balance Sheet

FY 2022 FY 2021

Cash

$21,294

$44,213

Accounts Receivable

$0

$0

Total Assets

$21,294

$44,213

Short-Term Debt

$35,424

$0

Long-Term Debt

$150,808

$50,266

Total Liabilities

$186,232

$50,266

Financials as of: 02/20/2023
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Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
Otherweb 08/08/2024 Dealmaker Securities $48,000,000 $947,194 Equity - Preferred Active RegCF
Otherweb 07/30/2023 Wefunder $8,000,000 $990,000 SAFE Funded RegCF
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Price per Share History

Note: Share prices shown in earlier rounds may not be indicative of any stock splits.

Valuation History

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.

Employee History

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Analyst Report

Synopsis

In today's digital age, the internet has become an essential source of information. However, the vast amount of content available online can often be overwhelming and filled with low-quality information, misinformation, and clickbait. This flood of superficial and often false information is driven by the desire for ad revenue, resulting in a cluttered and unreliable online experience.

Otherweb aims to address this problem by utilizing artificial intelligence (AI) to create a healthier internet. The company has developed a platform that aggregates and filters out low-quality information, ensuring that users are presented with reliable and valuable content. By leveraging AI technology, Otherweb can identify and eliminate clickbait, misinformation, and other forms of junk content, providing users with a more meaningful and trustworthy online experience.

With a focus on the US digital content market, Otherweb aims to tap into the growing demand for high-quality information and combat the negative effects of information overload. The company's platform offers a walled garden of pristine information, free from the noise and clutter that often plague the internet. By providing users with curated and reliable content, Otherweb aims to revolutionize the way people consume information online.

Next Section: Price

Price

Otherweb is currently raising funds on Wefunder at a valuation of $8 million. This valuation seems fair given the company's high number of active customers, which exceeds 1.6 million. Otherweb has developed a suite of AI models that can detect and filter out various forms of misinformation, spam, and undesired content. The company's mission to create a healthier internet by filtering out low-quality information resonates with many users.

Although Otherweb is currently in the pre-revenue phase, the revenue multiple of 70,796.46 is irrelevant for evaluating the company's valuation. It is important to note that Otherweb's primary revenue model is advertising, and the company generated $113 in revenue in the most recent fiscal year. Otherweb's valuation is lower than the average valuation of pre-revenue startups raising on equity crowdfunding platforms, at $20 million.

Considering Otherweb's low capital intensity level and the fact that it is not overvalued, the current price per share of the offering seems reasonable. However, investors should carefully assess the company's ability to scale its user base and monetize its platform through advertising partnerships. Additionally, the success of Otherweb will depend on its ability to continuously improve its AI models and stay ahead of emerging challenges in the digital content market.

Next Section: Market

Market

The US digital content market is a rapidly growing industry, driven by the increasing demand for online information and entertainment. The market is estimated to be worth $197.7 billion, with a projected compound annual growth rate of 13.78% over the next few years. This growth is fueled by factors such as the proliferation of internet access and the rise of social media platforms.

However, the digital content market is not without its challenges. Fake news and sophisticated disinformation campaigns have become particularly problematic in democratic systems, leading to a growing debate on how to address these issues without undermining the benefits of digital content. This presents an opportunity for companies like Otherweb, which aims to create a healthier internet by filtering out low-quality information, misinformation, and clickbait.

Otherweb's product offering and solution are unique in the market. By utilizing artificial intelligence, the company aggregates and filters digital content to provide users with a walled garden of pristine information. This approach sets Otherweb apart from its direct competitors, including Artifact, Oigetit, and Logically, as well as indirect competitors like Subtext.

The competitive landscape in the digital content market is extremely competitive, with numerous players vying for market share. However, Otherweb's focus on filtering out low-quality information and providing a high-quality user experience positions it well to capture a significant portion of the market. Additionally, the company's high market acceptance indicates that there is demand for its solution.

Overall, Otherweb operates in a high-growth market with significant potential. Its unique product offering and focus on filtering out low-quality information differentiate it from competitors and position it for success in the digital content market.

Next Section: Team

Team

Otherweb is led by its CEO, Alex Fink, the sole founder of the company. He previously was the founder and CEO of Panopteo, a computer and electronics manufacturing company. Before that, he worked as a marketer and a software developer.

Otherweb's team is currently small, consisting of only two members. The diverse and business experience of Fink fits will with the PhD in software engineering of his teammate, Jurij Smrke. Otherweb has sought guidance from relevant advisors, with four of them providing their expertise to support the company's growth.

Next Section: Differentiation

Differentiation

Otherweb aims to differentiate itself in the highly competitive market of content filtering and misinformation detection. The company has developed a suite of AI models that can detect various forms of misinformation, spam, and undesired content, providing a platform that aggregates high-quality information for users. Otherweb's goal is to create a healthier internet by filtering out low-quality information, misinformation, and clickbait.

Otherweb faces a large number of direct competitors, including Artifact, Oigetit, and Logically, which offer quite similar solutions.

One of Otherweb's indirect competitors, Subtext, offering curated direct messages, shows that the demand for curating social media and news feed is extensive. Otherweb's differentiation lies in its use of AI which allows it to summarize articles into bullet points and allow customers to listen to written articles.

Otherweb positions itself as a disruptive force in the industry, aiming to combat the prevalence of superficial, trivial, and false information that generates ad revenue. However, without patents or specific details about its technology, it is challenging to fully assess the extent of Otherweb's disruption in the market.

Overall, Otherweb faces a highly competitive landscape with numerous direct and indirect competitors. While it claims to offer a marginally better solution in terms of quality, further evidence and details are needed to fully evaluate its differentiation and potential for success in the market.

Next Section: Performance

Performance

Otherweb is still in the early stages of development and has not yet generated any revenue. The company has developed a suite of AI models that can detect and filter out various forms of misinformation, spam, and undesired content on the internet. Otherweb aims to create a healthier online environment by aggregating high-quality information and filtering out low-quality content, misinformation, and clickbait.

While Otherweb has made progress in developing its platform, it has not yet secured any paying customers or partnerships. The company has raised a total of $480,000 in prior funding rounds, but its cash and cash equivalents at the end of the most recent fiscal year were only $21,294. This indicates that Otherweb has been burning through its cash reserves to fund its operations.

Otherweb's primary revenue model is advertising, but it has not yet generated any revenue from this source. The company's annual revenue is currently only $113, with no growth reported since the last round. Initial experiments at Otherweb showed that it can add advertising to the search results pages and monetize each user at $58/year. This number is based on the estimation that each user searches twice a day on average, and each search can result in $0.08 in revenue, without charging subscription fees and without adding ads to the news feed or podcast section.

Overall, Otherweb is still in the early stages of its development and has not yet achieved significant financial performance. The company's success will depend on its ability to attract paying customers, establish partnerships, and generate revenue from its advertising model. Investors should closely monitor Otherweb's progress and its ability to differentiate itself in the highly competitive market.

Next Section: Risk

Risk

Investing in Otherweb carries several risks that potential investors should consider. One significant risk is the highly competitive landscape in which Otherweb operates. The company faces competition from both indirect competitors like Subtext and direct competitors like Artifact, Oigetit, and Logically. This intense competition could make it challenging for Otherweb to gain market share and establish itself as a leader in the industry.

Another risk factor is Otherweb's current financial situation. The company has minimal cash and cash equivalents, and its revenue is extremely low, with only $113 in annual revenue. Additionally, Otherweb has been operating at a net loss, with a negative net income of -$158,930 in the most recent fiscal year. This financial instability raises concerns about Otherweb's ability to sustain its operations and achieve profitability in the future, especially since it is not ready to generate revenue form advertising yet. The company will depend on capital raising for an uncertain amount of time.

Furthermore, Otherweb's revenue model primarily relies on advertising, which can be unpredictable and subject to market fluctuations. If Otherweb fails to attract a significant user base or struggles to generate advertising revenue, it could negatively impact the company's financial performance.

Additionally, Otherweb's valuation appears to be overvalued, considering its current financials and revenue. This could potentially lead to a down round in the future, which may result in a decrease in the value of investors' shares.

Lastly, Otherweb's lack of partnerships and patents may limit its competitive advantage and hinder its ability to protect its intellectual property. This exposes the company to the risk of imitation or replication by competitors.

Overall, investing in Otherweb involves risks associated with intense competition, financial instability, revenue generation, valuation, and intellectual property. Investors should carefully evaluate these risks before making an investment decision.

Next Section: Bullish Outlook

Bullish Outlook

Otherweb is positioned to disrupt the digital content market with its innovative AI-powered platform. The company's mission to create a healthier internet by filtering out low-quality information, misinformation, and clickbait addresses a critical need in today's information-saturated world. With the increasing demand for reliable and trustworthy content, Otherweb has the potential to capture a significant share of the US digital content market.

Despite being in the early stage of development and pre-revenue, Otherweb has already attracted a user base of more than 1.6 million active users, indicating early validation of its product offering. The company's value proposition and focus on providing a walled garden of pristine information without scams, while offering bullet-points summaries and voice readings of written news articles, differentiate it from the highly competitive landscape.
While Otherweb currently generates a modest annual revenue, its high-growth business model and the market potential of the digital content industry present significant opportunities for revenue growth in the future. As the company refines its advertising revenue model and expands its user base, it can leverage its AI technology to deliver targeted and relevant advertisements, attracting advertisers and driving revenue.

Although Otherweb's product has low barriers to entry and could be replicated, its early-mover advantage and focus on creating a misinformation-free internet give it a competitive edge. The company's commitment to providing high-quality content and its exponential growth trajectory indicate a bullish outlook for Otherweb.

Next Section: Bearish Outlook

Bearish Outlook

Otherweb operates in an extremely competitive landscape, with both indirect and direct competitors vying for market share. Subtext is an indirect competitor, while Artifact, Oigetit, and Logically are direct competitors. These competitors have already established themselves in the market and have built up a customer base. Otherweb will face significant challenges in trying to differentiate itself and attract users away from these established players. The company and its competitors may engage in a race to imitate each other's features and lessen their differentiation.

Furthermore, Otherweb's revenue is currently at a negligible level of $113.00, indicating that the company has not yet been able to generate significant advertising sales. This lack of revenue is concerning, especially considering that the company operates in the advertising space. Without a strong revenue model and a proven ability to generate income, Otherweb's valuation of $8 million is fair to investors, but not exciting.

Additionally, Otherweb's cash and cash equivalents at the end of the most recent fiscal year were only $21,294.00, while the company has a monthly burn rate of $13,244.17. This indicates that the company is burning through its cash reserves at a rapid pace, which could lead to financial difficulties if the company is unable to generate substantial revenue in the near future.

Overall, Otherweb faces significant challenges in a highly competitive market, has minimal revenue growth, and is burning through its cash reserves. These factors contribute to a bearish outlook for the company's prospects.

Next Section: Executive Summary

Executive Summary

Otherweb is an early-stage company that aims to create a healthier internet by utilizing artificial intelligence (AI) to filter out low-quality information, misinformation, and clickbait. The company has developed a suite of AI models that can detect various forms of misinformation, spam, or undesired content and filter it out. Otherweb's platform aggregates high-quality information from trusted sources and offers users a walled garden of pristine information.

While Otherweb addresses a critical issue in today's digital landscape, it faces an extremely competitive market. Direct competitors such as Artifact, Oigetit, and Logically, as well as indirect competitors like Subtext, are also working on combating misinformation and improving content quality. Additionally, the barriers to entry in this market are relatively low, which further intensifies the competition.

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Otherweb on Wefunder 2023
Platform: Wefunder
Security Type: SAFE
Valuation: $8,000,000

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