SapientX

SapientX

Early Stage

A.I. Software Solving Staffing Shortages

A.I. Software Solving Staffing Shortages

Overview

Raised to Date: Raised: $84,594

Total Commitments ($USD)

Platform

Wefunder

Start Date

12/17/2023

Close Date

04/29/2024

Min. Goal
$50,001
Max. Goal
$618,000
Min. Investment

$100

Security Type

Equity - Preferred

Series

Series B

SEC Filing Type

RegCF    Open SEC Filing

Price Per Share

$0.65

Pre-Money Valuation

$10,136,027

Rolling Commitments ($USD)

Status

Active

Reporting Date

04/27/2024

Days Remaining

1

% of Min. Goal

169%

% of Max. Goal

14%

Likelihood of Max
unlikely
Avg. Daily Raise

$641

# of Investors

98

Momentum
cool.svg
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Year Founded

2016

Industry

Business Services, Software, & Applications

Tech Sector

AutomationTech

Distribution Model

B2B/B2C

Margin

Medium

Capital Intensity

Low

Location

Santa Cruz, California

Business Type

Growth

SapientX, with a valuation of $10.14 million, is raising funds on Wefunder. The artificial intelligence software developed by the company provides voice and intelligence to products. SapientX’s voice technology can interact with users naturally and is applicable to vehicles, robots, telework, and consumer goods. The software is complete, with over 30 prototypes delivered to Mitsubishi, Yamaha, Murakami, NEC, Haier, KTM and more. David Colleen, Maclen Marvit, and Bruce Wilcox founded SapientX in April 2016. The current crowdfunding campaign has a minimum target of $50,000 and a maximum target of $617,999. The campaign proceeds will be used for sales, marketing, customer integration engineering, and patents completion.

Summary Profit and Loss Statement

FY 2022 FY 2021

Revenue

$0

$38,998

COGS

$0

$0

Tax

$0

$0

 

 

Net Income

$-995,887

$-567,670

Summary Balance Sheet

FY 2022 FY 2021

Cash

$875,580

$5,445

Accounts Receivable

$0

$28,998

Total Assets

$1,058,220

$95,159

Short-Term Debt

$210,167

$297,198

Long-Term Debt

$0

$0

Total Liabilities

$210,167

$297,198

Financials as of: 12/17/2023
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Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
SapientX 04/28/2024 Wefunder $10,136,027 $84,594 Equity - Preferred Active RegCF
SapientX 11/27/2022 StartEngine $7,920,000 $1,723,370 Equity - Preferred Funded RegCF
SapientX 05/29/2021 Wefunder $6,900,000 $841,183 Equity - Preferred Funded RegCF
SapientX 11/01/2018 SeedInvest $5,000,000 $388,455 Equity - Preferred Funded RegCF / RegD 506(c)
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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

The integration of artificial intelligence (AI) into daily life continues to advance, with voice-activated technology becoming increasingly central to the user experience in various industries. SapientX is at the forefront of this technological evolution, offering sophisticated AI software that provides voice and intelligence to a wide array of products. The company's voice technology is designed to engage users in a natural and intuitive manner, making it suitable for implementation in vehicles, robots, telework environments, and consumer goods.

SapientX has already demonstrated the viability and appeal of its AI voice technology by delivering over 30 prototypes to major companies such as Mitsubishi, Yamaha, Murakami, NEC, Haier, and KTM. These collaborations indicate a strong market interest and potential for SapientX's solutions in the global chatbot market, which is experiencing significant growth as businesses seek to enhance customer interaction and streamline operations.

The company's founders, David Colleen, Maclen Marvit, and Bruce Wilcox, bring a wealth of experience and a track record of innovation to SapientX. They have been pioneers in commercializing AI-powered 3D characters and have a history of developing automotive assistants for notable companies, including Mitsubishi Marelli, Visteon, and Volvo.

Currently in its early growth stage and pre-revenue phase, SapientX is seeking to raise funds to bolster its sales and marketing efforts, enhance customer integration engineering, and complete patent applications. The company is offering equity with a pre-money valuation of over $10 million. This fundraising campaign, hosted on Wefunder, aims to secure the capital necessary to expand SapientX's market presence and solidify its position as a leader in AI voice technology.

Next Section: Price

Price

SapientX is currently raising funds on Wefunder with a pre-money valuation of $10.14 million through the sale of preferred equity at $0.65 per share. Given that SapientX is in the pre-revenue stage, traditional revenue multiples cannot be applied to assess its valuation. However, the valuation can be contextualized by considering the company's total assets, prior funding, and the progress it has made with its product offering and solution.

The company has total assets of $1,058,220 and has successfully raised $3,430,825 in previous funding rounds. This indicates investor confidence in SapientX's technology and market potential. Additionally, SapientX has developed over 30 prototypes that have been delivered to notable companies such as Mitsubishi, Yamaha, and Volvo, showcasing the practical application and demand for its AI voice technology in various industries.

When considering the exit potential for startups like SapientX, the global chatbot market presents a significant opportunity. If SapientX can capture a meaningful share of this market with its advanced voice technology and secure additional partnerships or client relationships, the company's valuation could increase substantially. For investors seeking a 10X return, SapientX would need to reach a $100 million valuation upon exit (not accounting for dilution). This could be achieved through a combination of continued product development, market penetration, strategic partnerships, and potential acquisition by a larger company in the tech or automotive space, where its technology has clear applications.

It's important to note that while the company's valuation appears optimistic for a pre-revenue company, the strength of its intellectual property, the experience of its founders, and the demonstrated interest from established corporations suggest that SapientX has laid a foundation for future growth. Nevertheless, the investment carries the typical risks associated with early-stage ventures, including the need for further capital, market adoption challenges, and execution risk.

Next Section: Market

Market

SapientX operates within the dynamic global chatbot market, an industry experiencing rapid growth due to increasing demand for AI-powered customer service solutions. The current valuation of this market stands at approximately $7.1 billion, according to Markets and Markets, and is projected to grow at an impressive compound annual growth rate (CAGR) of 23.3%. This growth is fueled by the proliferation of messaging apps, the need for 24/7 customer support, and the cost savings associated with automated service systems over human personnel.

SapientX's focus on providing sophisticated voice and intelligence to a range of products places it at a strategic advantage to capitalize on market trends towards voice-enabled interfaces. The company's technology, which allows natural interaction with users, is not only applicable to vehicles and robots but also to burgeoning markets like telework and consumer goods, widening its potential customer base.

Despite being in the pre-revenue stage, SapientX has a developed product with over 30 prototypes delivered to notable clients such as Mitsubishi, Yamaha, and Volvo. This demonstrates a validated demand for its offerings and potential for significant market penetration. The company's primary revenue model is recurring, which is typical for software-as-a-service (SaaS) platforms, hinting at stable and predictable revenue streams upon full commercialization.

The competitive landscape in the chatbot and AI voice assistant market is moderately competitive, with several established players. However, the market's rapid expansion suggests there is ample opportunity for new entrants, especially those with advanced, ready-to-deploy solutions like SapientX. 

Next Section: Team

Team

SapientX is spearheaded by a trio of founders with a combined relevant industry experience of over 44 years. The team is led by CEO David Colleen, who brings 8 years of industry experience and is a full-time member of the team. Colleen, at 66 years old, has a background that includes founding Planet 9 Studios in 1991, which was the first company to create 3D city models. His leadership is complemented by Chief Scientist Bruce Wilcox, who has an impressive 24 years of industry experience and is recognized for his expertise in natural language processing. Wilcox has been a significant contributor to the field, with his work on chatbots earning him two Loebner Prizes.

Completing the founding team is AI Advisor Maclen Marvit, who has 12 years of industry experience and has worked part-time with SapientX. Marvit's background includes a stint at NASA where he worked on the Space Shuttle program and contributed to the development of the Hubble Space Telescope. All three founders graduated from top 100 universities, indicating a strong educational foundation behind the company's leadership.

Despite the team's decline in size since the last funding round, the founders' dedication to the company remains steadfast. The team's expertise is further supported by two relevant advisors from Google and McKinsey. SapientX has not been backed by venture capital, which suggests the founders have navigated the early-stage development and funding through other means, including a successful crowdfunding campaign on Wefunder.

Next Section: Differentiation

Differentiation

SapientX stands out in the global chatbot market by offering advanced artificial intelligence software that adds voice and intelligence to a wide array of products. This technology is designed to facilitate natural interaction between users and various applications, including vehicles, robots, telework, and consumer goods. The company's ability to deliver over 30 prototypes to notable clients such as Mitsubishi, Yamaha, Murakami, NEC, Haier, and KTM demonstrates the practicality and adaptability of its voice technology.

However, SapientX is in the pre-revenue stage and does not yet have paying customers or patents. This indicates that while the technology may be complete and prototypes have been delivered, the company is still in the early stages of commercialization. As such, its technology has yet to be tested in the market at scale. Additionally, the lack of patents could be a concern in protecting its intellectual property, which is paramount in a high-barrier-to-entry industry.

Despite these challenges, SapientX's approach to integrating voice technology across a diverse set of applications presents a unique value proposition. The company's commitment to enhancing digital communication through natural voice interactions could potentially drive adoption across multiple industries, from automotive to consumer electronics. 

Next Section: Performance

Performance

SapientX is an early-stage company in the business services, software, and applications industry, focusing on artificial intelligence voice technology. Despite being pre-revenue with no paying customers, the company has made substantial progress in product development and has delivered over 30 prototypes to notable companies such as Mitsubishi, Yamaha, Murakami, NEC, Haier, and KTM. This indicates a strong product-market fit and potential for future revenue as these prototypes could lead to commercial deals.

While SapientX has not yet achieved revenue growth, the company has managed to secure a total of $3.43 million in funding over prior rounds, indicating strong investor interest in SapientX's products. 

However, there has been a significant decline in the team size since the last round, which may raise concerns about the company's ability to execute its business plan. The monthly burn rate is reported at $60,000, which, in the absence of revenue, will place pressure on the company's cash reserves. The focus for SapientX moving forward will likely be on converting prototype deliveries into solid commercial agreements to ensure sustainable growth and transition into a revenue-generating phase.

Next Section: Risk

Risk

As an early-stage company, SapientX presents several unique risks to potential investors. First and foremost, SapientX is in the pre-revenue phase, which inherently carries high financial risk. The company has yet to prove its business model, and there is no guarantee that its products will generate the anticipated revenue.

While SapientX has delivered over 30 prototypes to various companies, there remains a risk associated with market acceptance. The global chatbot market is becoming increasingly crowded, and despite the potential of SapientX’s voice technology, gaining a foothold and achieving widespread adoption may be challenging, especially without strong partnerships to facilitate integration into existing systems.

Additionally, the company has a reported high monthly burn rate in comparison to its cash reserves. Without sustained funding, this burn rate could jeopardize the company's ability to continue operations until it becomes profitable. Given that SapientX is in the growth stage and requires substantial investment in sales, marketing, and customer integration engineering, it is critical for the company to secure additional funding to maintain operations and fund these growth initiatives.

The lack of patents also poses a risk for SapientX, as it may face difficulty in protecting its intellectual property, which is crucial in the highly competitive field of AI software. Without patents, SapientX could be at risk of competitors replicating their technology, which may impact the company's unique value proposition and ability to secure a competitive advantage.

Next Section: Bullish Outlook

Bullish Outlook

The burgeoning field of voice-activated artificial intelligence is a burgeoning one, and SapientX positions itself at the forefront with its advanced AI software. This software, capable of delivering a natural interaction experience, is already demonstrating its versatility across a range of applications including vehicles, robots, telework, and consumer goods. The fact that SapientX has delivered over 30 prototypes to major companies such as Mitsubishi, Yamaha, Murakami, NEC, Haier, and KTM is a testament to the viability and industry interest in their product.

Notably, SapientX is addressing the escalating need for automation and AI solutions in a time when staffing shortages are becoming increasingly common. Their AI software is not only an innovative solution but also a strategic tool that can be deployed across various industries to enhance customer service and operational efficiency. With a pre-money valuation of $10.14 million, SapientX presents an attractive investment proposition, especially considering its application has already been recognized by prominent industry players.

While SapientX is currently pre-revenue, the completion of their product and the initial interest from big names indicates a strong potential for future revenue streams, especially with a business model built around recurring revenue. Moreover, the company's founders, David Colleen, Maclen Marvit, and Bruce Wilcox, bring a wealth of experience and vision to the table, which is often a critical factor in the ultimate success of innovative startups.

The global chatbot market, which SapientX is poised to enter, is expected to experience significant growth. As businesses continue to seek out AI-driven solutions to improve customer engagement and automate tasks, the demand for SapientX's voice technology is likely to grow.

Next Section: Bearish Outlook

Bearish Outlook

Despite the potential of SapientX's voice and intelligence technology for products, there are critical concerns for potential investors. The company is in a pre-revenue phase, which means it has not yet proven its ability to monetize its offerings successfully. The reported monthly burn rate of $60,000 with no revenue is a significant cash outflow that could threaten the company's financial stability and longevity.

Furthermore, the lack of patents for SapientX's technology raises questions about the company's intellectual property protection strategy. Without patents, there's a risk of competitors replicating their technology, undermining SapientX's market position. The moderately competitive landscape indicates that there are existing players that could potentially overshadow SapientX's growth.

Moreover, the company's valuation of $10.14 million may be considered overvalued for a pre-revenue company with no patents and significant net losses. This could deter investors seeking a balanced risk-reward profile, particularly in an early-stage company where future revenue streams are not yet realized.

Finally, while the company has delivered over 30 prototypes to notable clients, there is no information on any resulting sales or long-term contracts, which casts doubt on the company's ability to convert prototype success into sustainable business relationships and recurring revenue streams. This adds another layer of risk for investors evaluating the company's growth prospects.

Next Section: Executive Summary

Executive Summary

SapientX is a company at the forefront of artificial intelligence software, focusing on providing voice and intelligence to a variety of products. With its voice technology that can interact naturally with users, SapientX has positioned itself as a key player in the integration of AI into vehicles, robots, telework, and consumer goods. The company's software is already complete, and they have successfully delivered over 30 prototypes to notable clients such as Mitsubishi, Yamaha, Murakami, NEC, Haier, and KTM.

Despite being in the pre-revenue stage, SapientX has demonstrated significant potential through its development achievements and the delivery of prototypes to major industry players. The company has raised over $3.4 million in prior funding rounds, indicating investor confidence in its vision and technology. SapientX operates in the global chatbot market, which presents a high market potential for growth, especially as digital workers become increasingly relevant in various sectors such as retail, healthcare, and hospitality.

The company's current crowdfunding campaign on Wefunder, with a pre-money valuation of $10.14 million, aims to raise between $50,000 and $617,999. The proceeds from this campaign are intended for sales, marketing, customer integration engineering, and the completion of patents. SapientX's founders, David Colleen, Maclen Marvit, and Bruce Wilcox, bring a wealth of experience and expertise to the table, which is underscored by the company's commitment to innovation and the development of AI solutions for staffing shortages across multiple industries.

While the company is not yet generating revenue and has a monthly burn rate of $60,000, the dedication of the founders and the innovative nature of SapientX's offerings present a compelling case for potential investors. The company's positioning in a moderately competitive landscape with high barriers to entry could allow SapientX to carve out a significant market share as it transitions from the development phase to commercialization.

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SapientX on Wefunder 2023
Platform: Wefunder
Security Type: Equity - Preferred
Valuation: $10,136,027
Price per Share: $0.65

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