Eagle-eyed investors may have noticed Crowd Media’s (ASX: CM8) December Quarter results where the artificial intelligence company flagged its plans to take on $5 billion chatbot company LivePerson (NASDAQ: LPSN) in a modern-day David vs Goliath scenario.
On their own, Crowd Media (which is valued around $30 million) is unlikely to tackle a global behemoth. However, the Company has been building key strategic alliances over the past six months with leading AI companies from the United States, Israel, New Zealand, Germany, Spain and the UK. Crowd’s strategic alliance is aiming to leverage their AI skill sets to drive conversational commerce with immersive digital human interactions incorporating sound and vision – something that LivePerson has done solely through text-only communication.
Being an AI company that underwent a major business transformation in September 2019, Crowd’s December Quarter was underpinned by $4m cash receipts which were partly generated by their AI-Chatbot that answers user-submitted questions.
However, the Company’s overarching goal, according to Chairman Steven Schapera, is their ‘Talking Head’ platform which will replicate celebrities and social influencers enabling real-time conversations with fans – a level of tech currently limited to the deep fake space.
“I am pleased to report that Crowd Media (ASX: CM8) has released its report for the December Quarter, highlighted by $4.0m cash receipts which is a 15% increase on the September Quarter,” said Schapera. “We are onto something huge here. Crowd Media is not just about the technology – the tech is only the enabler – it is about influencing behaviour to dictate the commercial outcome.
“It is about us understanding the decision-making process and behavioural psychology of consumers, and using AI conversational technology to drive more sales, more frequently, at a higher price and at a lower cost.
“Crowd now has what we need to propel us toward significant valuation multiples.
“Having formed our strategic alliance of leaders in the AI space, Crowd is now in a strong position to compete head-on with the $5 billion market leader (LivePerson).”
The AI alliance referenced by Schapera, of which Crowd owns various equity stakes, comprises of Israel-based VFR Holdings (specialising in digital influencers and 3D imaging), USA-based UneeQ (specialising in digital humans and the user experience), Forever Holdings (specialising in VR interactive stories) and Aflorithmic Labs which specialises in voice cloning.
Each of these services are tipped to bolt together under the AI alliance, which will enable Crowd to create celebrity doppelgangers that look and sound super-realistic and can engage with their fans in real-time.
In November 2020, Crowd released a beta version of this tech 12 months ahead of schedule, but has since showcased 3D imaging tech that will drastically improve video rendering and facial replication.
While the concept is cornerstoned by influencer marketing, where a celebrity like Kim Kardashian can promote makeup products directly to her fans, Schapera has also flagged applications in other fields like education and customer service. “High school students can learn about the French Revolution by Facetiming with a virtual Napoleon, with him answering their questions in real-time” was just one example previously flagged by Schapera.
Given the market capitalisation of Crowd Media, it is rare for a small player to declare its intentions to take on a global leader but with Schapera’s background, it’s notably more plausible as he has done it before.
Schapera is best known as co-founder of BECCA Cosmetics which he established in 2001 from scratch where he had an arduous task to take on the likes of Estee Lauder Group, L’Oreal, Shiseido etc. Undeterred, instead he built a company they would want to buy, delivering on that play in 2016 when BECCA was sold to Estee Lauder for $300 million.
Furthermore, the reference to LivePerson comes just days after Crowd confirmed that Schapera would take over the company’s leadership in an interim Executive Chairman role from long-time CEO Domenic Carosa, who tendered his resignation to fully concentrate on Banxa, a cryptocurrency company recently listed publicly in Canada. Carosa will continue to be a Director of the Company and is still a significant shareholder in Crowd.
Schapera will be assisted by Director, Robert Quandt who will also take on an interim Executive role. Quandt has previously held COO/CFO positions at Invincible Brands, a Berlin-based digital marketer whose annual revenues grew from $11m to $160m during his tenure. He also has extensive consulting experience, including advising Linde AG on their €6bn Americas business.
On February 10 at 6.00pm (AEDT) Crowd Media will be holding an investor briefing with Schapera and investors can register to attend here.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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