Black Sands Entertainment is raising at a pre-money valuation of $9.8 million, which is unusually high and a big lift over its $4.5 million valuation during its last raise in early 2020. The valuation may be indicative of the company’s early showing of consistent sales and relatively high traction on social media. Still, the company’s high valuation results in a relatively low price rating.

With the completion of the pilot of its Black Sands animated franchise, the company is moving into the highly lucrative animation industry, valued at $264 billion last year. This is coming off its early success in the much smaller comics market of $1.21 billion — a market largely swallowed by the superhero giants Marvel and DC. While the animation market in particular is massive, Black Sands’ total addressable market is considerably smaller. The company is quite clear that its target audiences are black consumers, which make up a considerably smaller share of both markets (13.4% of all Americans). However, black consumers tend to be younger than other ethnic groups, exhibit high levels of brand loyalty, and are present in high numbers on the social media platforms that Black Sands prefers, which compensates somewhat for the limited niche.

And that niche may not be so limited. As 2018’s Black Panther demonstrated, audiences of all kinds are hungry for black stories — the film was the 5th highest grossing superhero movie of all time (behind the four Avengers films), coming in at $1.3 billion at the box office. Though Black Sands makes no bones about appealing to black audiences specifically, overall consumer interest in quality black media appears to be growing. With the development of its app, Black Sands plans to introduce a free-to-subscription payment model, further expanding distribution of their comics to their target audience. Overall, Black Sands market score is middle of the road due to its focus on a niche audience.

The Black Sands Entertainment team is relatively small considering its ambitions. The startup is headed by President Manuel Godoy, who has a BBA in Economics from Queens College. Godoy got his start in the Army Reserve and moved on to project management and administrative roles before founding Black Sands in 2015 and publishing Black Sands in 2017. His wife, Geiszel Godoy, serves as CFO and has several years experience in technical design, which is unrelated to the industry but adds a creative edge to content development. She has also contributed to the brand through her Mori’s Family Adventures series. She sees the company appealing to family units, rather than solely adults or solely children.

The Godoys have recruited Teunis de Raat and David Lenormand to serve as the Head of Studio and Art Director, respectively. De Raat is a veteran of the animation industry, including positions with BRON, Disney, and Pixar Canada, and brings his expertise in animation to his leadership of the studio. Lenormand, a French artist, has more than ten years of experience in freelance illustration and concept design and has relevant experience in the fields of comics and animation, though his credentials are not thoroughly impressive.

Due to founder Manuel Godoy’s lack of experience in the entertainment industry, Black Sands’ team score is slightly below average. However, that inexperience is somewhat balanced by the team members that Godoy has brought on board since the company’s founding.

While the fields of comics and animation are thoroughly competitive, the target niche of black audiences are somewhat less so. Black Sands sees their biggest competitor as Webtoons, an online distribution platform for webcomics. Webtoons has an expansive catalogue and has generated 45.04 million views over the past six months, but relatively few of its offerings are focused on black stories. Black Sands has seen notable early traction, calling itself the “The most popular independent black content developers in the nation.” While this claim is difficult to validate, the company has shown that its black-centric approach can work, with consistent revenue and a powerful social media presence. Its YouTube channel has 103,000 subscribers. In contrast to other comic distributors, Black Sands emerging animation series could cyclically bolster sales of the “print” comic. The company has also secured endorsements from Michelle Obama, ReedPOP, and the Schomburg Center. For all of this, the company receives little attention from the traditional press, which it attributes to a system designed to suppress black voices — an “underdog” narrative that may propel further success or backfire and result in lower engagement. Black Sands’ differentiators score is its highest as a result of the company’s strong focus on producing content for black audiences.

Despite recent drops in revenue, Black Sands has seen a strong performance in recent years. The company holds no long-term debt and saw $100,048 in revenue last year. This was a decrease from $123,843 in 2018. However, the company’s cost-of-goods was significantly lower in 2019, and its net income much higher. Its products are also continuing to sell, evidence of demand for the products, and the company reports a 4x return on its advertising. Black Sands reported $100,000 in sales in August and has sold 60,000 units overall. It has a strong social media presence as well, with over 5 million impressions a month across platforms. Due to all of these factors, the performance score for Black Sands is strong.

Animation is a highly competitive industry, and in a way, Black Sands is hamstringing itself by appealing solely to black audiences. While Marvel comics has seen huge success with its Black Panther franchise in recent years, both Marvel and Black Panther are established franchises with established fanbases, whereas Black Sands is emerging with original content from a small studio. 

Given the small team, the company may also face difficulties with scaling and distribution of its shows and comics alike. If its app fails to wow users and draw subscribers, the company could see its user base dwindle and ultimately fade into irrelevance. The comic’s digital distribution platform may also fail to appeal to audiences that tend to prefer print comics. Black Sands tense relationship with traditional media makes its road rougher, as well, despite the appeal of that narrative to their narrow target audience.

Black Sands is showing early traction as it develops its content and platform and is setting the stage for future success. As Americans’ attitudes to social justice warm and audiences’ desire for black stories grow ever more voracious, the company is well-positioned to fill that need in the market. The company’s most optimistic projections estimate that if its app takes off and even a small number of users spend money in the app, it could achieve $1.2 million in monthly revenue by 2023, as well as an additional $5 million yearly revenue.

The team faces significant challenges in properly scaling and distributing, but if they can expand their team with gifted members and continue to effectively leverage their social media presence, they could be well-established for success.

Black Sands Entertainment is a comic and animation company, specializing in stories based in black culture. Its flagship franchise, Black Sands, centers around a young prince in ancient Egypt and features uniquely African mythology and culture. Black Sands leverages a strong social media presence to sell directly to consumers over traditional distribution methods. The company appeals directly to black audiences, marketing themselves as a refutation of Hollywood’s “whitewashed” narratives.

The company is filling a growing space, as audiences grow more interested in diverse stories for both adults and children. In order to more effectively distribute its media, Black Sands is building its own platform, a web-based and mobile application that will be a free-to-premium subscription model. With diminished but still impressive recent sales, the company stands a chance at becoming a strong independent black voice in the markets of comic and animated television. For these reasons, the KingsCrowd investment team gave Black Sands Entertainment a Deal To Watch rating.

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

Analysis written by Benjamin Potts.