Marking their first cash flow positive quarter since commencing a business transformation in 2019, artificial intelligence company Crowd Media (ASX: CM8) is well positioned to commercialise their Talking Head platform which is set to disrupt a $5 billion industry.
The $300k net positive cash flow for the quarter ended 31 March 2021 represented a 148% improvement on the previous quarter. More importantly though, the Company is in an excellent financial position with $4.2 million cash in the bank while showcasing significant development in their Talking Head platform alongside breakthroughs from their AI alliance partners.
The company earlier in the month released a beta version of Digital Dom, a responsive avatar of Director, Domenic Carosa which was created 100% by synthetic digital media. This included 3D imaging supplied by VFR and voice cloning by Aflorithmic Labs, both leading AI developers in their respective expertise.
“The Plan is coming together: we now have the substrate upon which we can integrate our Investee Partner’s tech with Crowd’s Q&A tech so that it becomes a conversational commerce platform,” said Crowd Media Chairman, Steven Schapera.
“Although it might seem fake to you today, by the end of next year it will appear very real indeed.”
The cash flow positive quarter continues some major changes in the Crowd Media business where Schapera, who was appointed in 2019, has had a firm focus on eliminating loss-making parts of the business to return it to profitability within three years. The first of his goals was achieved in 2020 with Crowd’s return to being underlying EBITDA positive in FY20.
While shutting down loss-making parts of the legacy Crowd business, new revenue sources have been explored by Crowd which sold the first ever license to its flagship Conversational AI platform in March 2021 to Forever Holdings for $300k on a non-exclusive basis. This provided them with access to Crowd’s AI platform which has answered over 180 million user-submitted questions and is the engine behind content voiced by Digital Dom and other talking heads in the future. Forever Holdings has since released “In The Room With Nile Rodgers” which has already started to generate revenues.
Leaving no stone unturned in their prudent management of cash, Crowd is even capitalising on their Amsterdam headquarters by subletting an entire floor after divesting their legacy and loss-making Mobile Premium SMS business for a nominal amount.
As reported in an investor briefing last week with Crowd Media shareholders, Schapera was pleased that all is on track towards commercialisation of the Talking Head platform in 2022. In doing so, the platform will be able to roll out talking heads of celebrities and social influencers rapidly where they can then have Facetime-like conversations with followers in real-time.
The concept is ideal for influencers and brands that do not have the physical capacity to converse with all their followers and fans, and was where Schapera identified the “Holy Grail” potential of Crowd’s Conversational AI platform prior to his major investment in the Company.
With $4.2m in the bank, Crowd is confident that they have more than 2 years worth of runway to accelerate their AI alongside their investee partners of which Crowd holds equity interest in, thus exposure to peripheral successes.
Never shying away from ambition, Schapera’s progress in turning around the Company which reported a $26 million loss before his arrival must be applauded as Crowd prepares to disrupt text-only chatbots – a USD $5 billion market opportunity.
Crowd Media invites investors to join their mailing list for their latest AI development news and industry research by subscribing 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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