Unith is continuing with its growth into the area of Digital Humans and they are currently rolling out a DIY service for existing customers as a Beta platform, prior to rolling out to a wider audience.
At the beginning of CY 2023 they laid out a development and growth map and achieved all the stated milestones and there is generally a lot of confidence in Management.
To aid this scale up they have been investing in new staff and over the past two quarters had around 10 FTEs and 3 intern positions advertised.
Unith have around $4M revenue generated by the Subscription Division and advised that between Feb and October 2023 increased the subscription rate from less than 20,000 to 500,000 paying subscribers. These subscription offers have a lead time of around 6 months to payment and so this should start to impact revenues this quarter more than last quarter.
My assumption is that the subscribers are being held at around the 500,000 level in order to preserve cash and that the growth rate did not continue at the same rate.
Pricing for these apps is in the range 2.99 - 19.99 Euros per month, depending on the launch country and the app. Whilst the revenue flowing to Unith is unknown, even $1/month from each subscriber would be a significant step up in revenues.
Cash on hand should be around $1.8-2.0M, although next week's quarterly will confirm how close they are to a next capital raising.
Additionally Unith have investments in three other businesses, which were valued at $4.33M in the last Annual Report, it is likely they are higher by now. They have no debt.
Over the past 12 months the share price has started to slide and there has been an increase in negative posting and unusual price activity and interested parties have approached the Board with proposals that have been rejected.
Last week, things came to a head with the delivery of S203D and s249D notices.
I am not going to expand on the parties involved, their affiliations or the reasons that they want what Unith has, but suffice to say Unith has an EV of around 2.7 cents and yet is currently trading at 1.7 cents or so, and it seems to be undervalued. (Subject to assets valuation and cash on hand)
At less than 2 cents this will be no good for your Strawman portfolio, but there is something interesting going on that may be of value to some.
The business continued with its restructure, recently won a 2-year, 3 x Talking Head licence with one of the Big 5 tech companies (Google, Amazon, FB etc), integrated ChatGPT into their platform and completed a rebranding of the business from Crowd Media to Unith.
With a recent capital raising under their belt are now fully funded and set to deliver on the launch of the Talking Heads platform by the end of 2023.
The recent investor briefing video shared today is HERE
The investor presentation slideset is HERE
The Pitt Street Analyst report is HERE
The new website at Unith.ai should be available this week, so there is a lot of anticipation how this will look.
There is lots to like here and a lot of opportunity for this technology to improve the way business interact with consumers or customer. Call centres, sales agents, staff onboarding, complaints handling systems are all mentioned as markets looking for this type of solution.
One important point that is often missed, is that these Talking Heads can converse in real time using a closed dataset of information and they do not require huge processing power, hence cheap cost.
They are not pre-recorded videos or speaking avatars as seen in training videos and consequently they do not appear as lifelike.
Currently there is a trade off between appearance and functionality and in reality the Market is less concerned about the physical appearance but rather that they can converse at a reasonable cost.
The purple row in the Roadmap indicates timing for improving the Human Likeness.
This week Crowd Media announced finalisation of two new binding Heads of Agreements that contribute to their strategic vision.
Conversational AI for Media Search - SourceFlare Partnership
Crowd Media and SourceFlare have entered into a Binding Heads of Agreement (HOA) to integrate Crowd's technology into the SourceFlare marketing platform to optimize customer acquisition funnels and lead generation.
SourceFlare will waive licensing fees to Crowd Media for access to the SourceFlare platform which applies machine learning and data insights to generate customer leads through search engines and social media. The platform will be utilised by Crowd’s Mobile Subscription business for customer acquisition.
A monthly fee of USD $5,000 per month will be payable to Crowd Media for access for ongoing service operation and support.
By extracting data insights from SourceFlare and integrating them with conversational AI, we look forward to generating content that will resonate with consumers and showcase the value of conversational AI in the field of customer engagement and acquisition.
Following delivery of the Proof of Concept, a Scale-Up phase will involve rollout of many different digital avatars that can be applied to unique marketing campaigns in multiple languages where each digital avatar will be interactive with internet users and powered by Crowd Media’s artificial intelligence.
Crowd Media are now featured in the srcflare website list of Partners, alongside
- Tonic
- Sedo
- Amazon
- Tik Tok
- Outbrain
- mgid
- revcontent
- Playworks
Which is amazing considering our Mcap is around $23M. But this sort of publicity and mixing with these larger brands is going to get Crowd noticed eventually.
The second announced partnership is with Impssble. Website here.
Interactive NFT Projects - Impssbl Partnership
In a separate agreement, Crowd Media and IMPSSBL Corporation have entered into a Binding HOA to integrate Crowd’s Talking Head technology into the NFT marketplace as a series of interactive Non-Fungible Tokens.
Impssbl will develop a ‘bridge’ that will convert an AI generated Talking Head (aka a digital avatar) into NFT artwork. Impssbl will then lead the NFT creation process, and then execute marketing and sales of the created series which will be integrated with Crowd's AI to be a world-first collection of interactive NFTs.
Phase 1 is anticipated to be completed before the end of September 2022. Marketing initiatives will then be rolled out by Impssbl with details for the first collection’s mint expected to be confirmed in the December quarter.
Profits generated from the first and future NFT series will be shared with Impssbl to be allocated 70% and Crowd Media to be allocated 30%, after expenses for technology development and marketing spend are recouped.
With these NFTs, collectors are not getting a picture, they will be getting an interaction. And in the future as we scale the project up utilising Crowd’s Talking Head platform, collectors will be able to acquire an interaction with a celebrity avatar that is personally made for them.
This is just one of the opportunities Crowd has identified as an additional opportunity to monetize Crowd's Talking Head platform beyond the B2B conversational AI solutions we have been developing.
Impssbl have now been granted access to the backend of the Talking Head platform so we look forward to seeing a first Proof of Concept.
IMPSSBL is headed by ex-Google, Head of AGT - Startups and VC Growth, Alessandro Botteon
Each of these agreements is setting them up to be able to deliver on the overall strategic plan for the business and the timeframe is relatively short for delivery.
Given that the business is running essentially cash-flow neutral ie the Subscription Division is funding the research and development, then there is little downside at current prices.
Based upon the delivery so far and the projects in the pipeline there seems more upside at this time.
The Subscription Division of Crowd Media is called Track Concepts and it is this profitable Division that is financing the development of the Talking Heads and allowing the company to operate its Research and Development activities essentially for nothing.
Crowd published a timeline of activities to year end and Track Concepts has already produced and is scaling the sales of the Horoscope App mentioned before and in addition they are now adding Childrens Stories to the offering.
The link to the LinkedIn post is here, where the short video should be viewable (fingers crossed)
Crowd have previously shown a Beta airline check-in application in one of their presentations and there has been speculation that this could have been created for KLM as they are based in Holland.
In terms of financials, Crowd have around $1M in cash, as well as another ~$0.3M due to them this month from a loan made to a third party as part of a business divestment.
As they are cash neutral for the quarter most of the reduction in cash was accounted for by increasing the investment in Aflorythmic. (The original $1M investment is now valued at $2M) and an investment in Decentraland billboard for advertising purposes.
It is nice to see them executing on their plan and to be honest it pays to take note of what their socials are doing as not much is coming out via ASX, although they do have a newsletter that can be subscribed to.
The current Chairman, Steven Schapera has resigned due to other committments and will leave at the end of the month.
Hopefully a replacement will bring along some new investors and some more awareness to this rapidly changing area of technology.
- CM8.ax
- SOI 670M
- Mcap $22M
- Cash $1.7M
Crowd Media just published their investor webinar from earlier this week highlighting their progress and potential new opportunities in the pipeline.
Subsequent to the webinar the share price has fallen and a number of holders looking for a quick profit took a bath and vented their wrath on the way out.
Unfortunately, comments such as, "I can't wait a month for them to deliver this, there are much better opportunities elsewhere" seem to be the norm these days, and some people have got used to the idea that the stock market is a route to easy money. It seems that investing is just for old people.
As a tech company the investment into the Talking Heads technology is being funded by the profitable Subscription division, who have just launched the world's first Astrologer that talks directly to you.
Whilst Astrology may not be everyone's ideal service, the reality is that this is a niche that subscribers are willing to pay for and it is a large underserved, fragmented market.
At the same time the company will be renewing its existing stable of Apps and upgrading them to the Talking Heads concept and driving the acquisition of new subscribers. The services are available in Europe and the Middle East, not in Australia.
The Crowd website ably describes how the business was turned around over the past couple of years and has demonstrations of the Talking Heads technology.
Of note is the first commercialisation of the Digital Doctor with Pangea Med in South Africa, which allows patients' pre and post operatively to get approved medical advice via a Talking Head.
If you are unfamiliar with the business then this is a good starting point.
Otherwise here is the Investor Webinar
Take note of the slide on Strategic Partnerships to research more and keep an eye out for the Quarterly due at the end of the month. As a minimum, investors will be looking for the cashflow neutral position to have been maintained or an increased positive number, as well as an increase in Subscribers for the profitable subscription division.
CM8.ax
SOI 670M
Mcap 26.8M
Debt $0
After the release of the latest Quarterly reporting I want to update the community about the progress that Crowd Media have made in the past 6 months or so.
What do Crowd Media do?
Before we talk about what Crowd do, let's revisit some history and look at what they used to do
Basically, in 2019 Crowd Media came to the attention of a European investment group because they had developed an artificial intelligence application that could answer customer questions in multiple languages.
This intellectual property was the reason that the Group invested in Crowd and aimed to establish the concept of Talking Heads, with the idea of entering the Influencer Marketing market and selling products online via clones of Influencers.
By buying into Crowd by the way of a Convertible Note, they believed that the current IP was worth $10M and that they had saved a ton of time in development stages.
After the initial investment Crowd formed partnerships with other businesses to accelerate the development of the Technology.
Of the remaining partners, there is Uneeq in New Zealand and Aflorythmic in Europe.
In the case of Aflorythmic in the UK Crowd also took a strategic GBP 1 million investment, to fund engineers working on Crowds agenda.
It has not been plain sailing for Crowd, there have been some headwinds along the way as Covid created new challenges by increasing online marketing costs, as everyone went online and the price of ads increased significantly.
I consider this to be a turnaround scenario, not unusual in startups, whereby management have had to modify the initial growth thesis and adapt to changing circumstances.
Where are we now?
Well, two years on from the initial investment Crowd has gone from a loss making enterprise to being cash flow positive for the quarter. Non-profitable revenues have been trimmed and staff reorganised. Unused office space has been leased out.
These revenues are coming from the Subscription Division and are now paying for the development of the Talking Heads.
In developing the concept of a Talking Head, Crowd have faced the challenges of how to make the Head look realistic, the speed at which new heads can be created and the server load caused by multiple users at one time and not forgetting the actual speech being realistic.
Like any new technology there is still room for improvement, but as part of the latest Quarterly, Crowd released three videos to demonstrate their technology and a new partnership with PangeaMed providing patient support Talking Heads in a medical environment.
Crowd and Pangea Partnership video
Digital Doctor Demo - Healthcare
https://talk.crowdmedia.com/demo2/?head_id=patient&org_id=pangea
Gustave Eiffel Demo - Education
https://talk.crowdmedia.com/demo2/?head_id=eiffel&org_id=cm8
The mobile subscription division has primarily been funding the development of the Talking Head platform but plans are now in place to accelerate its commercial value with new verticals that will include integration of our conversational AI in the gaming/entertainment space.
Crowd has already purchased a digital billboard in Centralland and with the increasing interest in the Metaverse, it expects to be playing a part as this new technology accelerates.
Over the coming years there will likely be huge opportunities for players in the digital Metaverse and comparisons have been made between Crowd and Animoca Brands that is now worth $5bn, whereas two years back they were worth $200M or so on the ASX.
My investment thesis is that, Crowd are not losing money and they are developing technology in a space that is becoming more important, so I see more upside than downside at this time.
The Metaverse and NFTs are a whole new technology that Crowd is well placed to take advantage of over the coming years.
This week Crowd Media announced the following collaborations and then subsequently a capital raising at 5 cents.
Highlights:
• Launched a beta version of its conversational commerce “talking head” 12 months ahead of schedule
• Crowd’s “talking head” has applications across influencer marketing, ecommerce, education and many other sectors
• As part of this limited beta trial, CM8’s first “talking head” is an AI driven Chatbot that can be used to help customers select the appropriate products for the www.MDcomplete.eu brand (exclusive distribution agreement announced 9th September 2020). A proof of concept “talking head”, can be viewed at https://bit.ly/CM8-EmmaBeta
• CM8 has entered into a strategic partnership with NZ based UneeQ Ltd for the creation of “Digital Ambassadors” to help power Conversation Commerce activity & influencer marketing
• CM8 will form a 50-50 Joint Venture (“Talking-Head JV”) with Israeli based VFR Assets and Holdings Ltd (www.Zoe01.com) to create a platform for the scalable creation of “talking heads” for the digital influencer, education and various other sectors
• CM8 has agreed to invest up to USD$250k into the Talking-Head JV
The links in the ASX announcement provide good examples of how the "conversational commerce" idea will be implemented and the capital raising will provide funding for the implementation and growth.
Crowd Media is still only valued at a Mcap of 2x revenues, whereas a basket of comparable companies trades at an average of 5.5x, so there is still a significant upside.
The possibilities for linking a digital avatar together with AI chatbot are immense.
Imagine getting this incorporated into Microsoft's Cortana or Apple's Siri and the you will get to see the potential here.
Breakout of the 3.5 cent resistance level and a positive backtest this week and a close of 4.1 cents. Crowd is trailing on a multiple of Mcap to Revenue of only 1x whereas the general market is averaging 5.4x.
Check out the attached chart to show other companies' multiples. Crowd (CM8) could easily re-rate by fivefold and yet still not be overvalued.
