SapientX’s current round has a valuation of $7.9 million. The company has not yet completed its product and has yet to earn any meaningful revenue. The company’s valuation has also seen marginal growth since its last round of fundraising, likely due to increased team size, which is critical for SapientX’s development. SapientX previously raised nearly $1.3 million to aid in development efforts and has worked with prominent companies like Samsung, KTM, Volvo, Yamaha, and Indian Motorcycles. The voice artificial intelligence market is growing quickly, but technology products in this space take a considerable amount of time to develop, earn revenue, and eventually become profitable. Overall, SapientX’s valuation is a fair deal.

SapientX operates in the growing global voice recognition market. In 2020, SapientX’s addressable market size within the global voice recognition market was estimated to be $10.7 billion. The market is expected to grow at an annual rate of 16.8% until 2026, which is on the high side. SapientX also has potential to grow into the artificially intelligent (AI) assistant market, which could improve sales and help it gain market traction. Money directed towards voice recognition and voice AI will likely increase given industry trends towards improving efficiency with technology. If convenient and still relatively affordable, improved voice recognition features could be integrated into many different types of existing technologies. 

Overall, SapientX’s addressable market is large, and the company has a variety of opportunities to further differentiate itself. While this is not a winner-take-all market, SapientX could dominate the voice recognition market through its effective and highly adaptable technology in the near future.

SapientX benefits from the extensive experience of two co-founders and a strong executive team. Bruce Wilcox serves as a co-founder along with Maclen Marvit, who also acts as an advisor to the company. Wilcox has decades of experience working in the video game industry and artificial intelligence (AI) programming. Wilcox co-wrote patents on motion control and gesture interfaces. He earned a Bachelor of Science from the University of Michigan. Marvit is a trained rocket scientist and has worked at NASA and Blue Origin. He earned a Bachelor of Science from Caltech. His past experience in technology and science translates well to his work with SapientX. 

David Colleen serves as SapientX’s CEO and chairman. Colleen is an experienced AI and virtual reality entrepreneur with more than 30 years of business experience. He served as the CEO of a software company for navigation and social networking for 27 years, which gives him credibility in the space. Colleen has developed meaningful relationships with more than 17 Fortune 100 companies. Those connections will likely help with the expansion and adoption of SapientX’s technology moving forward. He studied architecture and business at Cornell before beginning his career in business. 

Nasir Kahn serves as the CTO at SapientX. He is a full-stack software developer who began his tech career in the gaming industry. He boasts strong engineering skills and team leadership abilities. 

SapientX’s large team also includes leads for marketing, business development, engineering, and animation, among others. SapientX also benefits from a handful of experienced board members and advisors who boast distinguished backgrounds in finance, AI, entrepreneurship, and business development. Overall, the team is very strong and seems to have the skills necessary to grow the company.

The market for voice recognition is crowded, and it can be difficult to distinguish one product or brand from another. Competitors include Siri, Alexa, Dragon Professional, and Otter.ai, to name a few. These competitors vary in price and focus but offer very similar voice detection services to SapientX. SapientX’s 99% accuracy far exceeds that of other popular voice recognition options, which have average accuracy rates of 75%. Alexa can likely catch up quickly, though, as its accuracy has increased from 78% to 91% for informational questions and from 54% to 68% for voice assistant commands. 

SapientX’s technology is patent pending, and entry barriers are relatively high in this market. SapinetX also runs offline and offers users more than 40 different languages and dialects to choose from. Compared to other similar products, SapientX appears to offer higher-quality products and appears to be expanding into other market niches. Overall, SapientX is highly differentiated.

SapientX has yet to launch given the complexity of its product and reliance on partnerships for its implementation. But despite being in the pre-product phase, the company has developed 20 prototypes with top companies, including Volvo and Yamaha. It boasts noteworthy traction, with LG and Mitsubishi Motors as customers. Earlier versions of the company’s technology gained impressive recognition, earning the Loebner Prize four times.

According to its Form C from December 2021, the company did not earn any revenue during the most recent fiscal year. This is a decrease from the previous fiscal year’s revenue of $530. This decrease in revenue directly contributes to the company’s just about average performance score. For a technology company, having capital is essential for researching and developing products. Fortunately, SapientX has successfully raised nearly $1.3 million. SapinetX’s monthly burn rate is a moderate $34,135, and the company had just a small amount of long-term debt ($134,556) by the end of 2021. If SapientX is able to move quickly, test, and expand its product offerings more rapidly than other companies in this space, it could do extremely well.

SapientX’s overall risk level is low. It has a financial risk because voice recognition products typically require a lot of development and testing. While SapientX might offer a superior product to its competitors, it can be difficult to stand out among established brands. The founders began working on the technology for SapientX in 2009, but they still have yet to launch a complete product or begin generating meaningful revenue. This long research, development, and testing timeline raises questions about the company’s future financial growth. SapientX will need to address its limited plans for scaling and distribution to ensure future profitability and financial growth for investors.

There is also a small competition risk due to the crowded market with a variety of established competitors. SapientX can potentially manage competition by delivering a superior product at a more reasonable price point than its competitors. SapientX will need to fully launch a product and grow its customer base quickly if it hopes to establish itself as the leader within the voice recognition market.

Since its last round ending in May 2021, SapientX has grown its team, continued prototype testing and researched areas for product-market fit. The company’s previous valuation of $6.9 million has increased to $7.9 million in the current round. The SapientX team has experienced immense growth, which will eventually aid in its development and expansion in the market. The company’s executive and supporting team is strong with years of relevant industry experience. SapientX has yet to earn much revenue, but it has built meaningful relationships with Yamaha, NEC, and Volvo, among others. SapientX built a vehicle voice assistant for Mitsubishi Motors and an automotive prototype for LG. Moreover, previous versions of the SapientX technology have been used by co-founder Bruce Wilcox to win the Loebner Prize four times. COVID-19 and related supply chain issues caused serious delays but also allowed SapientX to explore virtual assistants for Zoom and WebEx platforms. In early 2022, SapientX hopes to distribute the software in its customers’ products to new customers. 

Overall, SapientX has made encouraging progress since its previous funding round that more than justifies its minor valuation increase. And COVID-19 setbacks must be taken into account. Therefore, the company has retained its KingsCrowd rating of Deal to Watch.

SapientX’s biggest concerns are finances and competition. It operates in the very crowded voice recognition market where legacy brands dominate. Name recognition can be vital for ensuring product adoption and brand loyalty. As a new company, SapientX could struggle to convert customers from more established brands. It will be key for SapientX to expand into additional market niches to adopt new customers and refine its technology. Although SapientX’s founders began working on its voice recognition technology in 2009, the company has yet to generate meaningful revenue. SapientX also lacks a finalized product. Moving forward, SapientX will need to establish financial, user, and product traction to demonstrate that it is a strong investment opportunity. Otherwise, investors may be concerned about the company’s future profitability.

SapientX is gaining traction and diversifying its offerings. Competition in the voice recognition and artificially intelligent (AI) assistant market is fierce, but it is not a winner-take-all industry. And SapientX has already set itself above the voice assistant competition with a 99% accuracy rate. SapientX has established important partnerships and opportunities to refine its product through testing with established companies. The voice recognition and AI assistant market has many niches for SapientX to expand into with its growing customer base. With a strong executive leadership team, noteworthy advisors, and strong defensible technology, SapientX has real potential to become a leader in the voice recognition market.

SapientX is transforming voice assistant technology. Its artificially intelligent voice recognition technology helps users improve efficiency, organization, and more. Given the nature of its product, SapientX has financial and competition concerns because it has yet to earn meaningful revenue and offers similar services to some competitors. Operating within such a crowded market with limited financial traction could leave SapientX vulnerable.

However, SapientX’s recent testing, relationship building, established team, and plans for expansion are encouraging for investors. Its CEO is an experienced executive who has built out a comprehensive team to support the growing company. Previous versions of SapientX’s technology have won the Loebner Prize four times. The company has delivered prototypes of its product to Mitsubishi, Yamaha and more than a dozen other major companies. Its 99% accuracy rate puts it a step above competing voice assistant technology. And the company’s current valuation is very fair compared to industry averages. All things considered, the current raise is promising for investors. Therefore, SapientX has been rated a Deal to Watch by the KingsCrowd investment team.  

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

Analysis written by Carolyn Price, January 10, 2022.