Artificial intelligence and eCommerce company Crowd Media (ASX: CM8) has kicked another major goal in their corporate turnaround strategy, today clearing their $1.67m debt facility just one week after launching a beta version of their AI, 12 months ahead of schedule.
The facility relates to some legacy debt prior to the arrival of Chairman Steven Schapera in September 2019 who has spearheaded a huge financial turnaround in the past 12 months for Crowd to have been underlying EBITDA positive for FY20 which represented a $2.8m turnaround.
Clearing the debt now is expected to save Crowd Media more than $180k in annual interest expenses and has been facilitated by a $4m capital raise announced on Monday where the Company was well supported by institutional investors that liked what they saw at last week’s beta launch.
“After heavy losses in FY2019, we finished FY 2020 with a positive underlying EBITDA of $140k. We now have the funds to properly finance our R&D and become an innovator again, whilst also having the funds to invest in revenue growth capability,” said Schapera in a letter to shareholders yesterday.
“We now have a company that is on a mission to lead the conversational commerce space. All our ducks are in a row: we have an absolutely clear strategy to deliver us to our end-goal, and nothing is distracting us from that.
“We are committed to executing on fintech and insuretech, as planned, in 2021. We are about 12 months ahead of plan for our “talking head” concept and have our beta up and running.”
Referencing their ‘Talking Head’ beta, Crowd last week introduced the first version of the AI tech which will drive them into the conversational commerce space. Already with mature AI chatbot technology that can have real-time conversation by text-only, the beta introduced a visual element where a sales representative was able to have a conversation with prospective buyers of beauty products by assessing their needs and matching them with the relevant product solutions.
Only the beta version, Crowd has flagged plans to advance this tech significantly over the next 12 months to the point it can be rapidly rolled out across different products and services to provide AI solutions to customer service, sales and education in multiple languages. Once fully launched, the tech is expected to be used by social influencers and celebrities to have direct conversations with their fans, creating further commercial opportunities to strengthen engagement and promote their sponsors.
Schapera had long identified this “tectonic shift” in influencer marketing which prompted him to invest heavily in Crowd Media following his exit from BECCA Cosmetics, a beauty products company founded before selling to Estee Lauder for $300m. Citing Crowd’s AI chatbot tech as the driving force behind his decision to invest which he estimates saved him more than $10m in high-risk R&D, he commented that he “couldn’t be more proud of the fact that we have tripled shareholder value in the 14 months to date.”
In the coming months, Crowd has flagged plans to expand their Crowd Direct division, which sells products direct to consumers via their eCommerce network and more than 1,000 social influencers, into the fintech and insuretech sectors – a speciality area of Crowd CEO and Founder Domenic Carosa who was an early Bitcoin investor.
*Owners of this website are CM8 shareholders
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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