SkillSoniq

SkillSoniq

Early Stage

AI-Powered Recruiting App

AI-Powered Recruiting App

Overview

Raised this Round: Raised: $134,152

Total Commitments ($USD)

Platform

StartEngine

Start Date

02/11/2021

Close Date

09/13/2021

Min. Goal
$10,000
Max. Goal
$535,000
Min. Investment

$149

Security Type

Equity - Common

Series

Seed

SEC Filing Type

RegCF    Open SEC Filing

Price Per Share

$0.82

Pre-Money Valuation

$10,300,000

Year Founded

2016

Industry

Business Services, Software, & Applications

Tech Sector

EnterpriseTech

Distribution Model

B2B/B2C

Margin

High

Capital Intensity

Low

Location

Jersey City, New Jersey

Business Type

Growth

SkillSoniq, with a pre-money valuation of $10.3 million, is raising funds on StartEngine. It is an online marketplace that uses AI to connect companies with freelancers at affordable rates. In today's gig economy, SkillSoniq is helping individuals choose when and where they want to work on an interim or even contract-to-hire basis. Abhinav Verma founded SkillSoniq in 2016. The current crowdfunding campaign has a minimum goal of $9,999.90 and a maximum goal of $534,999.98, and the funds will be used for growth and expansion. SkillSoniq generated $350,000 in revenue in New York alone during its first year and has launched in four more cities since then.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$367,297

$5,882

COGS

$320,097

$6,366

Tax

$0

$0

 

 

Net Income

$-613

$-20,080

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$18,250

$1,770

Accounts Receivable

$494

$1,420

Total Assets

$18,743

$3,190

Short-Term Debt

$6,228

$1,462

Long-Term Debt

$67,994

$56,594

Total Liabilities

$74,222

$58,056

Financials as of: 02/11/2021
Create a free account today to gain access to KingsCrowd analytics.

Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
SkillSoniq 09/12/2021 StartEngine $10,300,000 $134,152 Equity - Common Funded RegCF
SkillSoniq 04/13/2020 Wefunder $5,500,000 $100,286 SAFE Funded RegCF
Create a free account today to gain access to KingsCrowd analytics.

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.

Valuation History

Price per Share History

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

Employee History

Upgrade to gain access

Pay Monthly
Annually (Save 17%)

Edge

$25 /month
billed annually
Free portfolio tracking, data-driven ratings, AI analysis and reports
Plan Includes:
Everything in Free, plus
Company specific KingsCrowd ratings and analyst reports
Deal explorer and side-by-side comparison
Startup exit and failure tracking
Startup market filters and historical industry data
Advanced company search ( with ratings)
Get Edge Annual
Already a member? Log in here.

Ratings KingsCrowd Startup Rating Methodology Article

Blurred Ratings Bars Blurred Ratings Bars

Analyst Report Analyst Report Methodology Article

Synopsis

Finding and recruiting the right employee can be a costly endeavor for a business. The average cost to hire a new employee using internal resources averages more than $4,000. Hiring a headhunter to bring in the right talent drives that amount up to $20,000. On top of this, the cost of training that employee is steep, typically amounting to 38% of that employee’s first year’s salary.

Over the years, new entrants in the recruitment market have tried to bring this cost down. Companies like LinkedIn, ZipRecruiter, Indeed, and Monster provide online job search and recruitment services. More traditional staffing agencies like Robert Half and Aerotek also try and meet companies’ needs. Even with these, the cost of recruitment is still high, and in many jobs, it can take several weeks to many months to find the right person. Even when a candidate is hired, there’s a chance they won’t be a good fit for the hiring firm’s culture or their required work. These are just some of the reasons why addressing the needs of employers and the desires of workers has resulted in the popular shift toward freelance and remote work. While this is a viable solution, many employers and employees prefer to find a more permanent arrangement.

One firm that seeks to address these concerns is SkillSoniq. Simply put, the business is founded on the concept of offering recruitment services through an easy-to-use app. Leveraging the rise of the freelance market, the company encourages freelance workers to join its app. Companies are able to post jobs or projects to be completed. The app’s AI attempts to find the strongest, most qualified candidates among the available freelance workers for each project. It then pairs them with the companies seeking the work done.

These companies are given the opportunity to pay freelance pricing for a select period of time. After that time elapses, each company is able to either swap the freelancer out for another or extend the duration of the freelancer’s work. If the company in question believes that the worker is a good pick for a permanent position, it is able to offer said worker that spot.

Management at SkillSoniq has discussed a couple of ways that it is generating revenue today. The first is by charging freelancers 10% of whatever they make on the app. The company also intends to charge its client companies a “nominal” fee when they hire one of the people on its platform as an employee. The longer the company has worked with the person before hiring them, the lower this fee will be. Management is also interested in higher commissions charges and in subscription packages.

SkillSoniq’s current StartEngine raise has been rated a Neutral Deal by the KingsCrowd investment team.

Next Section: Price

Price

SkillSoniq is raising capital by offering common equity at a $10.3 million valuation. This amount is somewhat high compared to other startups currently seeking funding. However, it is more reasonable when viewed in context with SkillSoniq’s most recent revenue of more than $350,000. Balancing these factors against each other, the price score for SkillSoniq is moderate.

Next Section: Market

Market

There is not one single market that SkillSoniq truly fits into. Instead, investors should look at the company through the intersection of two markets. The first of these is the freelance space, since freelancers will account for the majority of the app’s users and as its primary source of revenue. 

Last year, an estimated 41% of the American workforce performed at least some freelance work, a healthy increase from 28% back in 2013. In 2021, the expectation is for this amount to grow to 42%, and by 2027, it should climb to 50.9% of the American workforce. However, only about 28% of the freelance workforce is full-time. What’s really interesting is that today’s youth are the trailblazers in the freelance market. Among millennials, 40% freelance on a full-time basis, and 53% of working-age Generation Z do as well. This is not to say that freelancers are not willing to consider a full-time position. In one poll, 51% of freelancers said that no amount of money would convince them to transition into a full-time job, but 29% said that a pay increase of less than $5,000 annually would convince them to do so. A further 6% said that a pay increase of between $5,000 and $19,999 per year would be needed.

More companies are becoming interested in the freelance market. Of Upwork’s 17 million users, five million are client companies. Of the companies that do hire freelance workers, the largest share — about 36% — are located in the US. This is great for SkillSoniq given that it launched in New York. 

The other market to look at is the recruitment market. According to one source, the online recruitment market was worth $28.68 billion in 2019. With growth expected to average 7.1% per annum, the industry should rise to $43.49 billion by 2027. An important niche that SkillSoniq definitely fits in is the recruitment software market. This opportunity was worth about $1.75 billion in 2017, but with an annualized growth rate of 7.4% expected of it, it should climb to $3.10 billion by 2025.

Given the favorable characteristics of these markets and the sizable and growing shift toward freelancers that society is seeing, SkillSoniq’s market score is its highest across all five metrics.

Next Section: Team

Team

While there are multiple individuals working on building up SkillSoniq, the core player is Abby Verma. He presently serves as the “Partnerships Lead.” At present, Verma is also a member of SHRM, an HR membership association. Previously, he worked as a technology and digital transformation consultant for EXL. There, he helped to digitize and optimize certain corporate functions for the firm’s clients. This experience is valuable since it shows that he understands how to address the needs of a variety of firms. The HR membership, meanwhile, ties right in to what SkillSoniq is working on. 

Also in the past, Verma was the co-founder and director of Tutoring “D” Street, an India-based firm that offered technology training programs to no fewer than 12 cities in the country. This, too, gave him experience addressing a company’s hiring needs. Before that, Verma was a senior manager of corporate finance at Yes Bank. There, his work involved financing deals in different verticals. Naturally, this granted him exposure to how companies in other industries operate. Similar experience was likely gleaned from his private equity investment analyst role at ICICI, and his credit risk manager role at GE Capital.

While Verma’s experience is solid, the fact that he is the only core member of the team does weaken the profile of the business some. Thus, the team score for SkillSoniq is middle of the road.

Next Section: Differentiators

Differentiators

SkillSoniq’s idea of trialing freelancers with the end goal of assigning the right one a full-time post seems novel. However, it is unclear if this goal will be fulfilled given the resistance freelancers have indicated when it comes to transitioning to a more permanent fixture at a business. 

SkillSoniq’s other claim about using AI to match candidates to jobs isn’t all that unique, though it could have some positive impact on the company’s business model if it works better than competing technologies. Beyond that, there is not a great deal that is different. Like Freelancer.com, Upwork, and other job or freelance recruitment portals, SkillSoniq connects workers with projects. It’s very difficult to be wholly original on that front. As a result, SkillSoniq scores slightly below average in the differentiators metric.

Next Section: Performance

Performance

One area where SkillSoniq has done well has been on the performance side. In its first year, the company signed up more than 6,000 freelancers to its platform. Today, that figure is over 12,000 and has since expanded to four additional cities. More than 300 companies have signed up for the app as well. SkillSoniq has landed strategic collaborations with companies like WeWork and trupo. Other partners include universities like Cornell and Tuck, as well as coding academies like Actualize and App Academy.

One weak spot on the performance side, though, is the company’s financial performance. In 2019, the business reported strong sales of $367,297. This compares to $5,882 in 2018. Over this timeframe, the company’s net loss narrowed from $20,080 to $613, and its operating cash outflow improved from $20,038 to an inflow of $5,080. While all of this is great, the tough 2020 economy saw revenue lower to around $300,000 and net loss, by our calculations, rise to $67,910. As a note, these 2020 figures have not been audited and have been, instead, posted by management to their offering page. Despite this decline, the overall performance of the firm has been strong. Thus, SkillSoniq’s performance score is above average.

Next Section: Bearish Outlook

Bearish Outlook

While SkillSoniq is an interesting business, there are some bearish items for investors to consider. First and foremost, the price that management is asking investors to accept on the deal is a bit lofty. The management team is really a one-person gig, adding substantial risk to the endeavor. SkillSoniq’s platform is also not significantly different from other solutions in the space today. Lastly, it’s unclear just how deeply COVID-19 has affected the company and how growth would have looked in the absence of the pandemic.

Next Section: Bullish Outlook

Bullish Outlook

On the bullish side of the equation, there are plenty of items for investors to be happy about. The market the firm operates in is attractive. What’s more, the industry should become even more geared toward the services it offers. Its product does have some points of differentiation, and its performance, all things considered, should be applauded. Investors should not expect the company’s financials to show profits that are in the green for an extended period, but the fact that it did narrow losses and cash flows from 2018 to 2019 is encouraging.

Next Section: Executive Summary

Executive Summary

SkillSoniq has created an app to connect freelance workers via AI with projects they are well-qualified for. The companies those freelancers work with can also use the work to see if the individual would be a good long-term fit. Freelance work is expanding, and the recruitment market offers ample opportunities for a company like SkillSoniq. However, the company is essentially a one-man operation, which brings unnecessary risk. Additionally, the app is not strongly differentiated from established competitors like UpWork. All in all, SkillSoniq is a Neutral Deal at this time.

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

Analysis written by Daniel Jones.

Founders: enhance your startup's credibility on KingsCrowd. Create an account to claim this raise page.
Add to portfolio
SkillSoniq on StartEngine
Platform: StartEngine
Security Type: Equity - Common
Valuation: $10,300,000
Price per Share: $0.82

Follow company

Follow SkillSoniq on StartEngine

Buy SkillSoniq's Deal Report

Warning: according to the close date for this deal, SkillSoniq may no longer be accepting investments.

SkillSoniq Deal Report

Get KingsCrowd’s comprehensive report on SkillSoniq including:

  • How our proprietary algorithm rates their current capital raise (1-5 stars)
  • Detailed price, market, team, differentiators, performance, and risk ratings
  • Whether SkillSoniq is undervalued or overvalued
  • Scores on the founding team and key personnel's background and expertise
  • Our deep-dive analyst report reviewing the deal's investment potential and bullish vs. bearish outlook

Buy the SkillSoniq deal report for only $10!

Email address:
Looking to buy more than one deal report? Get unlimited reports by upgrading to Edge