SelfDecode

Growth Stage

AI platform that provides personalized health recommendations based on DNA, labs and environment.

Analytics

Raised to Date: Raised: $1,036,802

Aggregate Commitments $

Platform

Wefunder

Start Date

07/19/2021

Close Date

04/30/2022

Min. Goal

$50,000

Max. Goal

$1,069,999

Min. Investment

$100

Security Type

Equity - Preferred

Funding Type

RegCF

Series

Seed

Price Per Share

$2.36

Pre-Money Valuation

$34,948,219

Rolling Commitments $

Status
Funded
Reporting Date

05/01/2022

Days Remaining
Funded
% of Min. Goal

2,074%

% of Max. Goal

97%

Likelihood of Max
Funded
Avg. Daily Raise

$3,638

Momentum
Funded
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Location

Los Angeles, California

Industry

Healthcare & Pharmaceuticals

Tech Sector

HealthTech

Distribution Model

B2B/B2C

Margin

High

Capital Intensity

High

Business Type

Growth

SelfDecode, with a pre-money valuation of $34.9 million, is raising crowdfunding on Wefunder. The company has developed an AI-based platform that analyses DNA, labs, and the environment to provide personalized health recommendations. The SelfDecode platform gives targeted supplement, diet, and lifestyle recommendations to the users. Joseph Cohen founded SelfDecode in April 2019. The proceeds of the current crowdfunding round, with a minimum goal of $50,000 and a maximum goal of $1,069,999, will be used for marketing, product development, and hiring. SelfDecode works on a recurring revenue model and generates a predictable revenue stream from subscriptions. The revenues of the company grew by 360% from the fourth quarter of 2019 to the fourth quarter of 2020.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$1,436,971

$1,216,807

COGS

$201,536

$19,953

Tax

$3,813

$4,609

 

 

Net Income

$-499,746

$-254,934

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$348,348

$196,431

Accounts Receivable

$0

$0

Total Assets

$348,348

$196,431

Short-Term Debt

$867,685

$331,835

Long-Term Debt

$465,772

$349,960

Total Liabilities

$1,333,457

$681,795

Financials as of: 07/19/2021
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Ratings KingsCrowd Startup Rating Methodology Article

Analyst Report Analyst Report Methodology Article

Synopsis

With ever-improving medical technology and unprecedented access to information, consumers are taking a greater interest in their health. They want sophisticated, flexible, customized care. To meet the demand, the healthcare industry is exploring solutions to give consumers comprehensive knowledge about their personal health. One such method is genomic analysis, which is analysis based on an individual’s DNA. Genomic analysis can reveal a person’s risk of developing hereditary diseases (including hereditary cancers), genetic disorders, diabetes, lactose intolerance levels and more. 

SelfDecode is tapping into genomic analysis and AI to help consumers improve their health. The company produces wellness reports and gives customized health recommendations based on DNA, microbiome, environmental factors and lab test results. SelfDecode has its own DNA testing kit and also supports files from other DNA testing kits such as 23andMe, Ancestry, and MyHeritage

SelfDecode’s current WeFunder raise has been rated a Deal to Watch by the KingsCrowd investment team.

Price

SelfDecode is offering preferred equity at a pre-money valuation of $34.9 million. This valuation is appropriate for the stage SelfDecode is in. The company generated $1.4 million in revenue in 2020, an increase of 18% from the previous year. This gives SelfDecode an attractive revenue multiple for a software company. On top of that, this valuation also takes into account the high quality of SelfDecode’s technology. Overall, SelfDecode is being valued fairly and receives a high price score.

Market

In 2020, the global genomics market was worth $20.1 billion with a compound annual growth rate of 15.4%. North America dominates the market with a share of 36.7%. 

The genomics market is still considered relatively young. Researchers are still investigating the value and benefits of gene-based medicine. Some researchers feel it should be treated with caution, and others state it is not always effective. But overall, the market size and the rapid growth rate show a promising future. It is a reflection of an increasing market acceptance by the public. Therefore, SelfDecode receives an impressive market score.

Team

SelfDecode founder and CEO Joe Cohen has a formal education in finance, psychology, and premed from Brooklyn College. He started SelfDecode in January 2016 and concurrently runs two other businesses, SelfHacked.com and LabTestAnalyzer. Running three businesses at the same time can indicate that a founder is not dedicated. Though the three companies are under the same parent company, GeniusLabs, Cohen’s attention is still divided. And while Cohen’s eight years of experience running these businesses put him in a good position to lead the company, there was no other information regarding his prior experience that can further validate his ability to make SelfDecode a successful company. He also has no experience bringing a company to an exit.

Cohen assembled a strong and well-rounded team to expand SelfDecode’s reach. SelfDecode currently has 88 team members that cover expertise in software architecture, engineering, science, finance, operations, customer support, human resources, product management, and marketing. One notable member of leadership is Chief Science Officer Puya Yazdi. His years of experience in the healthcare industry and passion for genomics are crucial for the accuracy of SelfDecode’s main product. Overall, the well-rounded team and the founder’s lack of dedication and exit experience gave SelfDecode a roughly average team score. 

Differentiators

Some of SelfDecode’s mature competitors include 23andMe, Ancestry, and MyHeritage. Tons of traditional health coaches are indirect competitors. However, this should pose no problem because other DNA testing kits are more of a complementary product instead of direct competition. Additionally, SelfDecode’s main selling point is its AI doctor feature that gives personalized DNA-based health recommendations to its users, which has a unique advantage over traditional health coaches. The closest competitor is CircleDNA, which offers very similar products with 20 health categories and more than 500 reports. But while CircleDNA does provide some health advice, SelfDecode seems to offer more comprehensive recommendations. SelfDecode also stands out because it provides a score on how specific genes correlate with different health traits. Compared to competitors like 23andMe, SelfDecode gets the most complete picture of its users’ DNA. 

However, SelfDecode’s pricing is not highly differentiated. Its tiered pricing system is similar to 23andMe and Ancestry. It also lacks patent protection, which makes its product less defensible. Overall, SelfDecode’s differentiator score is slightly above average. 

Performance

Since its incorporation in 2019, SelfDecode has performed remarkably well using a direct-to-consumer model, offering its service through its own website. According to its pitch deck, SelfDecode generated $1.9 million in revenue in 2020. This doesn’t match the $1.4 million in 2020 revenue listed in its Form C. But according to its Form C, it generated more than $2 million in revenue from 2019 to 2020, which is a strong performance.

Although SelfDecode is not profitable yet and still burns quite a bit of cash, it has received high praise from its customers. The company also has an impressively high monthly retention rate of 98% and 123,000 active subscribers on its email list. Its customer lifetime value over customer acquisition cost ratio is five times, which means that the company is growing fast. Additionally, SelfDecode has received nearly $5 million in prior investment rounds. Overall, its impressive performance thus far receives a high rating.

Risks

On top of not having a prior exit, Joe Cohen is the sole founder of SelfDecode. This can present a risk of limited network and expertise, though it certainly hasn’t hurt SelfDecode’s prospects thus far. SelfDecode currently has some short-term and long-term debt, and the nature of its business requires it to spend a lot of money. Both of these factors can cause it to burn even more cash and hurt its finances if not managed properly.

SelfDecode is aiming to expand beyond the direct-to-consumer model and into a business-to-business model in the near future. However, it will take a long time to scale into this production as the company is still developing the platform in order to license to healthcare organizations. Moreover, selling to healthcare organizations will require a long sales cycle.

Bearish Outlook

SelfDecode is operating in a competitive, rapidly growing market. Although its huge amount of data makes it defensible, it lacks patent protection for its services. Defensibility is crucial as leaders in DNA testing kits like 23andMe could comfortably enter the market and offer the same health recommendation services to its wide customer base. This potential future might be a huge obstacle in SelfDecode’s quest to scale and grab more market share. Additionally, SelfDecode’s services may not have staying power. Customers may only use the SelfDecode platform for a few years and stop paying for it once they develop the habits recommended by the service. It could be a challenge for SelfDecode to sustain its retention rate. 

The revenue presented on SelfDecode’s raise page and its Form C seems to belong to SelfDecode’s parent company, GeniusLabs. This could indicate a less impressive revenue number for SelfDecode. Founder Joe Cohen is also currently developing a fourth company, a supplement company called Jo. This makes the company seem unfocused. And because its other companies are not well established yet and its platform for the business-to-business model is still under development, its future is uncertain.

Bullish Outlook

Despite potential obstacles, SelfDecode has grown substantially over the past two years. The fact that it has a sizable team full of competent members shows that the business is in it for the long run. SelfDecode’s product has some key differentiators that set it apart from the competition, including an AI doctor feature and a comprehensive view of its users’ health. It also has licensed professionals to support its customers.

SelfDecode has been growing steadily year over year, and that seems unlikely to change. It currently aims to reach $4 million in revenue by the end of this year, which is a feasible goal. It has generated more than $2 million in revenue since 2019, which is a sign of positive traction. It also has a substantial retention rate of 98% and glowing customer reviews, which bode well for the product. 

While challenges lie ahead, SelfDecode has potential because its market is likely to continue growing at a rapid pace. As genomic analysis becomes more widely practiced, SelfDecode is well-positioned to profit as a comprehensive health service. Additionally, SelfDecode’s business-to-business model could play a huge role in scaling the company and solidifying its place in the market.

Executive Summary

SelfDecode uses AI to provide personalized, DNA-based health recommendations. It incorporates factors such as genetics, microbiome, and environment to produce accurate health and wellness reports specific to each user. SelfDecode is in a competitive yet rapidly growing global genomics market. Hence, making its service defensible will be key for SelfDecode to become a leader in this market. It is a part of a parent company, GeniusLabs, which has two other businesses and is developing another. SelfDecode has an impressively large team that seems well-positioned to scale the business, and the company has shown steady growth year over year. SelfDecode also distinguishes itself by providing the most comprehensive and customized health and wellness reports among its competitors. Therefore, SelfDecode is a Deal to Watch.

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

Analysis written by Inez Sanjaya.

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SelfDecode on Wefunder 2021
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Platform: Wefunder
Security Type: Equity - Preferred
Valuation: $34,948,219

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