RAD AI

RAD AI

Growth Stage

AI for Smarter and Faster Digital Content

Overview

Raised to Date: Raised: $1,199,999

Total Commitments ($USD)

Platform

Wefunder

Start Date

10/03/2023

Close Date

11/03/2023

Min. Goal
$50,000
Max. Goal
$1,200,000
Min. Investment

$250

Security Type

Equity - Common

Series

Series B

SEC Filing Type

RegCF    Open SEC Filing

Price Per Share

$0.28

Pre-Money Valuation

$48,002,823

Rolling Commitments ($USD)

Status
Funded
Reporting Date

11/29/2023

Days Remaining
Funded
% of Min. Goal
Funded
% of Max. Goal
Funded
Likelihood of Max
Funded
Avg. Daily Raise

$40,000

# of Investors

803

Momentum
Funded
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Year Founded

2018

Industry

Business Services, Software, & Applications

Tech Sector

AdTech

Distribution Model

B2B

Margin

Low

Capital Intensity

Low

Location

Santa Monica, California

Business Type

High Growth

RAD AI, with a valuation of $48 million, is raising funds on Wefunder. The company leverages data and analytics for fully automated influencer marketing. RAD AI’s platform is simple and effective and allows small and medium-sized businesses to drive targeted traffic and conversions. The business reported two-times year-over-year revenue growth from 2022 and expects three-times revenue growth with fourth-quarter sales bookings for 2023. Jeremy Barnett founded RAD AI in 2018. The current crowdfunding campaign has a minimum target of $50,000 and a maximum target of $1.2 million. The campaign proceeds will be used for marketing and hiring in sales, marketing, and technology.

Summary Profit and Loss Statement

FY 2022 FY 2021

Revenue

$446,498

$515,854

COGS

$318,615

$136,460

Tax

$0

$0

 

 

Net Income

$-3,752,371

$-1,044,968

Summary Balance Sheet

FY 2022 FY 2021

Cash

$203,235

$280,149

Accounts Receivable

$49,917

$249,354

Total Assets

$4,653,779

$919,988

Short-Term Debt

$152,766

$297,377

Long-Term Debt

$539,062

$535,029

Total Liabilities

$691,828

$832,406

Financials as of: 10/03/2023
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Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
RAD AI 05/01/2024 Dealmaker Securities $62,828,416 $1,476,471 Equity - Common Active RegCF
RAD AI 02/21/2024 Dealmaker Securities $53,840,752 $967,366 Equity - Common Funded RegCF
RAD AI 11/02/2023 Wefunder $48,002,823 $1,199,999 Equity - Common Funded RegCF
RAD AI 04/29/2023 Wefunder $18,000,812 $4,152,088 Equity - Common Funded RegCF
Rad Intelligence 09/17/2020 Wefunder $5,000,000 $816,583 SAFE Funded RegCF
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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

Artificial Intelligence (AI) transforms how businesses operate in every industry, and marketing is no exception. AI has the potential to automate repetitive tasks, provide insights from large datasets, and improve customer experience. A report by MarketsandMarkets predicts that the AI market will grow from $58.3 billion in 2021 to $309.6 billion by 2026 at a Compound Annual Growth Rate (CAGR) of 39.7% during the forecast period.

RAD AI is a company that leverages AI to provide a fully automated marketing solution for small businesses. The company's platform allows businesses to offer their best digital content, set the price and budget, and pay only for the website visits RAD drives. This approach enables small and medium-sized businesses to drive targeted traffic and conversions, boosting their online presence and potentially increasing sales. With RAD AI's platform, companies can utilize the growing influencer marketing trend. 

RAD AI has shown promising growth, with two-times year-over-year revenue growth from 2022 and expectations of three-times revenue growth with fourth-quarter sales bookings for 2023. The company's current crowdfunding campaign on Wefunder has a minimum target of $50,000 and a maximum target of $1.2 million, with campaign proceeds set for marketing and hiring in sales, marketing, and technology.

Next Section: Price

Price

RAD AI is offering equity at a $48 million valuation. This valuation represents a revenue multiple of approximately 107.51, which is relatively high for a company in the pre-profit stage. It is important to note that RAD AI reported a negative annual revenue growth rate of -13.40% in the most recent fiscal year. This negative growth, combined with the relatively low yearly revenue of $446,498, raises concerns about the company's ability to achieve its projected three-times revenue growth for 2023.

Additionally, RAD AI's margin level is considered low, indicating that the company may face challenges in generating significant profits from its operations. 

While RAD AI operates in the high-growth business services, software, and applications industry, its current valuation appears to be overinflated relative to its financial performance. Investors should carefully evaluate the company's growth prospects, revenue generation capabilities, and ability to achieve profitability before considering an investment at this valuation.

Next Section: Market

Market

Artificial Intelligence (AI) in marketing is a rapidly growing market. With a compound annual growth rate of 31.6%, the global market is expected to reach $107.54 billion by 2028. RAD AI operates within the US segment of this market, which boasts a size of about $3.54 billion in 2023.

The company's primary product is a fully automated influencer marketing solution for small businesses. By leveraging AI, RAD AI's platform can effectively drive targeted customer traffic and conversions. This is particularly relevant in today's digital age, where influencer marketing is becoming an increasingly popular strategy. The company's solution directly addresses the needs of businesses looking for efficient and automated ways to leverage influencer marketing, which points to a solid product-market fit.

Next Section: Team

Team

CEO Jeremy Barnett and CFO Aaron Kuntz founded RAD AI. Both founders have relevant industry experience of about six years, indicating their understanding of the influencer marketing space.

Barnett's background and expertise in the field of influencer marketing make him well-suited to lead RAD AI. He has a solid managerial skill set and has been instrumental in the company's growth. As the CFO, Kuntz brings financial expertise to the team, ensuring sound financial management and strategic decision-making.

The RAD AI team comprises 17 members, focusing on sales, marketing, and technology. 

RAD AI is backed by several notable venture capital investors, including Kickstart, Quarry, City Light Capital, Artis Ventures, Gradient Ventures, Precursor Ventures, Hike Ventures, Harmonix Fund, OCV, and Santa Barbara Venture Partners. This support from experienced investors further validates the potential of RAD AI's business model and growth prospects.

Next Section: Differentiation

Differentiation

RAD AI differentiates itself in the competitive field of AI marketing solutions by offering a fully automated influencer marketing platform specifically designed for small businesses. The company's platform is simple and effective, enabling small and medium-sized businesses to drive targeted traffic and conversions. RAD AI leverages data and analytics to optimize influencer marketing campaigns. It allows brands to provide their best digital content, set the price and budget, and pay only for the website visits generated by RAD AI's distribution to real social media users.

In a moderately competitive landscape with 50-100 direct competitors, RAD AI's focus on serving the needs of small businesses sets it apart. Many existing AI marketing solutions cater to larger enterprises, leaving a gap in the market for smaller firms seeking automated influencer marketing solutions. RAD AI's emphasis on simplicity and effectiveness, coupled with its track record of revenue growth, positions the company well to capture market share in the US Artificial Intelligence Marketing industry.

Next Section: Performance

Performance

RAD AI has shown promising growth in the influencer marketing space. The platform offers a fully automated solution for small businesses to drive targeted traffic and conversions through influencer marketing. RAD AI has reported two-times year-over-year revenue growth from 2022, with annual revenue reaching $446,498 in the most recent fiscal year. However, there has been a slight decline in revenue growth compared to the previous period, with a negative growth rate of -13.4%. 

RAD AI's business model primarily relies on recurring revenue, focusing on building long-term customer relationships. The company has already established a user base and has paying customers. However, there has been no significant growth in the number of users, customers, or clients since the last funding round. This suggests that RAD AI may need to focus on expanding its customer base to drive further revenue growth. 

Despite the decline in revenue growth, RAD AI expects to achieve three-times revenue growth with fourth-quarter sales bookings for 2023. This indicates that the company has a positive outlook for the future and is confident in its ability to generate increased revenue. 

It's worth noting that RAD AI has not made significant progress in product development or team growth since the last funding round. This may be an area of concern as the company needs to continuously innovate and expand its capabilities to stay competitive in the moderately competitive influencer marketing landscape. 

Next Section: Risk

Risk

RAD AI presents some risks that potential investors should be aware of. One of the key risks is the company's negative net income and declining revenue growth. RAD AI reported a significant decline in revenue growth of 13.4% from the prior fiscal year. Additionally, the company has a high monthly burn rate, which may raise concerns about its ability to sustain its operations in the long term. Another risk factor is the company's overvaluation. With a valuation of $48 million, RAD AI may be considered overvalued based on its financial performance and industry comparables.

Furthermore, RAD AI operates in a competitive market, which may pose challenges in gaining market share and differentiating its offerings. Finally, RAD AI lacks patents, potentially leaving the company vulnerable to intellectual property disputes or competitors developing similar technologies. It is important for investors to carefully evaluate these risks before considering an investment in RAD AI.

Next Section: Bullish Outlook

Bullish Outlook

RAD AI is well-positioned in the rapidly growing market of influencer marketing. The company's fully automated platform offers small and medium-sized businesses a simple and effective solution to drive targeted traffic and conversions. With a focus on leveraging data and analytics, RAD AI empowers brands to optimize their influencer marketing efforts and achieve measurable results.

RAD AI has demonstrated strong revenue growth, with a two-times year-over-year increase in 2022. The company expects this growth trajectory to continue, projecting three-times revenue growth with fourth-quarter sales bookings for 2023. This optimistic outlook reflects the effectiveness of RAD AI's platform and the growing demand for influencer marketing solutions.

The company's partnerships with social media users enable digital content distribution to their audiences, driving website visits and enhancing brand visibility. This unique approach sets RAD AI apart from its competitors and positions it as a leader in the industry.

Furthermore, RAD AI has successfully raised significant funding from notable venture capital investors, including Kickstart, Quarry, City Light Capital, Artis Ventures, Gradient Ventures, Precursor Ventures, Hike Ventures, Harmonix Fund, OCV, and Santa Barbara Venture Partners. This financial backing demonstrates confidence in RAD AI's business model and growth potential.

Next Section: Bearish Outlook

Bearish Outlook

With its valuation of $48 million, RAD AI is entering the market with a significant overvaluation. The company's revenue multiple of 107.51 is exceptionally high, considering the reported revenue decline and low net income. With an annual revenue growth rate of -13.4%, RAD AI is experiencing a decline in its revenue since the last funding round. This negative trend raises concerns about the company's ability to generate sustainable and consistent revenue growth in the future.

Furthermore, RAD AI's net income for the most recent fiscal year-end was -$3.75 million, indicating significant losses. This net loss level is alarming, especially for a company operating in the high-growth business services and software industry. Investors should carefully consider the company's ability to achieve profitability and its long-term financial viability.

In addition, RAD AI faces competitive market conditions and low barriers to entry. The influencer marketing space is crowded with numerous players, making it challenging for RAD AI to differentiate itself and capture a significant market share. Without a clear competitive advantage or unique value proposition, the company may struggle to gain traction and establish a strong foothold in the market.

Lastly, RAD AI's low margin level further adds to the concerns surrounding its financial performance. With low margins, the company may face challenges covering its operating expenses and achieving profitability, especially considering its high monthly burn rate of $312,697.58. This raises questions about the company's ability to sustain its operations and generate positive cash flow.

Next Section: Executive Summary

Executive Summary

RAD AI is an innovative marketing platform that leverages data and analytics for fully automated influencer marketing. It provides a simple, effective solution for small and medium-sized businesses to drive targeted traffic and conversions. The company's unique approach to influencer marketing allows brands to provide their best digital content, set the price and budget, and pay only for the website visits RAD drives. The platform uses real social media users to distribute the content to their social media audiences, driving website visits.

The company has reported two-times year-over-year revenue growth from 2022 and expects to triple its revenue growth with fourth-quarter sales bookings for 2023. Despite the promising growth, RAD AI has seen a medium decline in revenue growth since its last round, which could be a cause for concern. The company's valuation of $48 million seems overvalued, given its current revenue and net income figures.

RAD AI is backed by several venture capital investors, including Kickstart, Quarry, City Light Capital, Artis Ventures, Gradient Ventures, Precursor Ventures, Hike Ventures, Harmonix Fund, OCV, and Santa Barbra Venture Partners. The company has also been part of accelerator programs like Microsoft for Startups and Expert Dojo, which could provide valuable resources and mentorship for the company's growth.

The current crowdfunding campaign on Wefunder has a minimum target of $50,000 and a maximum target of $1.2 million. The proceeds from the campaign will be used for marketing and hiring in sales, marketing, and technology. This investment could allow investors to participate in a high-growth company with a high market potential in the burgeoning field of influencer marketing.

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RAD AI on Wefunder 2023
Platform: Wefunder
Security Type: Equity - Common
Valuation: $48,002,823
Price per Share: $0.28

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