Podetize is raising via a Crowd SAFE at a $7.5 million valuation. That’s an extremely fair valuation for a company with this much traction. Podetize brought in roughly $1.3 million in revenue in 2021. Therefore, a $7.5 million valuation represents a 5.8x revenue multiple, which is very reasonable for a software company. Podetize could probably justify a much higher valuation given strong year-over-year growth and growing traction. This round’s price is attractive for potential investors.

Podetize’s core value proposition for podcasters is advertiser matching. (Podetize’s theory is that mainstream ad platforms are focusing only on mega shows, leaving money on the table from the millions of listeners subscribed to smaller shows.) Therefore, Podetize is playing in the podcast advertising market. It’s a relatively small one, expected to hit $2 billion next year. However, the market is expected to show 30.2% year-over-year growth in 2022. This is a massive growth rate. It is rare to see startups operating in a market that’s growing more than 20% per year.

The podcast advertising market isn’t the only market to which Podetize belongs. Podetize offers a number of other features beyond advertiser partnerships, including production and marketing. The broader market for podcasting was valued at $11.5 billion globally in 2020 and is expected to demonstrate a 31.1% annual growth rate over the next several years. Again, this is a staggering growth rate, now paired with a slightly larger market.

Podetize has market opportunities in the larger podcast space and within the specific niche of podcast advertising. Neither market is huge, but both are growing rapidly. If the demand for podcasts continues unabated, they could become as popular as television over time. While Podetize isn’t operating in a single massive market, it still has a solid opportunity to build value in this growing space.

Podetize was founded by husband-and-wife team Tracy and Tom Hazzard. The Hazzards both attended The Rhode Island School of Design and spent the first part of their professional careers in the furniture industry. Throughout successive roles in design, research, and product development, the pair generated 42 issued and pending patents with an 86% commercialization rate. They were even featured in a Harvard Business Review case study on intellectual property. 

After their product development success, the Hazzards transitioned to careers as content creators. Beginning with a 3D printing podcast called WTFFF?!, and later with shows like Feed Your Brand and The Binge Factor, the duo shares advice on business- and brand-building. 

The Hazzards’ experience as podcasters led to their revelation that creators don’t have access to tools for creating, distributing, and monetizing their podcasts. They founded Podetize to solve this problem, merging a podcast creation consulting firm and a software platform for managing shows. Podetize is a family business: the Hazzards’ daughter Alexandra, a recent college graduate, serves as COO. 

The Hazzards have an impressive business background and are prime examples for podcasting as a vehicle for career expansion and generating supplemental income. However, the Podetize team isn’t particularly well-rounded. The company lacks a true senior software development executive. While Tom Hazzard is CTO, he does not seem to have any software development background. The team is also quite small and reliant on contractors for marketing, customer service, and more. As Podetize grows, it will be important to augment the team to include more well-rounded, fully committed staff members. 

Podetize is not the first company focused on providing tools for podcast creators, and it won’t be the last. The company positions itself as the only all-in-one platform for creation through monetization. However, all-in-one platforms face the risk of focusing on too many things at once and losing out within each vertical to more specialized competitors. For example, Libsyn offers many similar tools for podcast hosting, and Midroll (acquired by SiriusXM) brands itself as the largest podcast advertising network in the United States.  

Podetize argues that its core differentiator is the level of hands-on consultation and support included within its podcast hosting, branding, and monetization plans. While other podcast platforms leave creators high and dry without support or strategy, according to Podetize, its model actually helps creators go from ideation to monetization. While this hands-on approach may well be a differentiator, it is neither scalable nor defensible. As such, Podetize may struggle to carve out market share in this highly competitive industry.

Podetize has demonstrated strong year-over-year growth and key performance indicators in the five years since its founding. Revenues have increased steadily in recent years, from $600,000 in 2019 to $1 million in 2020 and roughly $1.3 million (unaudited) in 2021. While Podetize isn’t profitable yet, its net losses are reasonable at $183,189 for 2020. 

Podetize’s revenue growth is driven by strong business fundamentals. With a growing total of more than 500 subscribers and twice as many podcasters, Podetize has 27.2 million monthly views overall. The company boasts a 93% client retention rate, much higher than most software-as-a-service companies. Long-term revenue from client relationships that average 34 months generates an average customer lifetime value of almost $15,000. The company also has decent margins at 62% (unaudited) for 2021. 

All of these metrics are particularly impressive given the fact that Podetize has been entirely bootstrapped . If the company can leverage capital raised in this round to supercharge growth and minimize costs, investors could reap the benefits. 

Podetize is a relatively low-risk investment. The company has been generating meaningful revenue for several years now, with strong business fundamentals that indicate long-term stability. It’s worth noting that the Podetize team is small and not very well rounded, which could pose an increased risk as the company scales. Finally, the company is raising on a Crowd SAFE, one of the more risky security types with fewer investor benefits.

Podetize has successfully demonstrated year-over-year growth with strong client retention metrics. However, it’s worth asking whether Podetize has the market potential to continue scaling and to deliver a return on investment. The podcasting market is relatively small, despite all of the buzz. Advertisers just don’t spend that much on ads for small podcasts (which are the vast majority of shows available), no matter how much Podetize believes they should. If Podetize’s ad-focused features aren’t in high demand, the company is reduced to a business offering mostly services, not software. Those services aren’t very scalable and face stiff competition from other podcast technology companies and independent consultants alike. While Podetize’s performance indicates that it is a successful small business, it’s not clear yet that the company has what it takes to become a major player in podcasting. 

While market prospects for Podetize seem relatively small at the moment, the podcasting industry is arguably in its infancy. Assuming the market continues to grow and Podetize answers its needs, there’s a scenario in which the company becomes a market leader in end-to-end podcast creation and monetization. If Podetize can achieve that vision, the company could reasonably be acquired by a major podcast brand like Spotify, SiriusXM, or even Apple. Those giants have spent a lot of money to acquire podcast studios and podcast technology in recent years, and they show no sign of slowing down. Investors could reap major gains from an acquisition, particularly because Podetize is raising at such a reasonable valuation for this round.

Podetize is a podcast software and services company helping podcast creators launch, market, and monetize their shows. Podetize believes in simplifying the podcast creation process and putting more ad revenue in the hands of small podcast hosts. This approach has created a loyal clientele, with a 93% client retention rate. With strong year-over-year growth, compelling opportunities ahead on the product roadmap, and a very fair valuation for this funding round, Podetize could be an attractive opportunity for investors looking to capitalize on the growth of the podcast industry. 

On the other hand, Podetize faces stiff competition in this market. It’s not clear that the company has any assets that are proprietary enough to compete with well-funded technology startups or even independent consultants offering similar advising services. While the podcast market is growing steadily, it is still relatively small. Plus, Podetize’s team doesn’t include any technical leadership, which is critical to help the company expand its software offering for more efficient growth. Therefore, Podetize has been rated a Neutral Deal. 

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

Analysis written on February 18, 2022.