*Together with

Hey Boardroom!

We have some great companies approaching investing deadlines by the end of April (a couple of days away, can you believe how fast this year is going???).

I wanted to pass on this Deep Dive from our friends over at Alts for our other friends from RAD AI — yes, I’m talking about Jeremy Barnett & Team.

Give this a good read and see what you think about jumping on board with us and thousands of other investors.

Happy reading 🤓

Jeff Bishop

A look at RAD AI (Deep Dive from Alts)

• By Stefan von Imhof

Today we’re looking at ​RAD AI​, an AI marketing platform built to understand emotion.

AI is all the rage these days, but RAD has been doing AI since before it was cool.

They analyze conversations between real humans to translate marketing gibberish into authentic content. It’s real. It’s accurate. And it’s scalable.

These guys have a strong history of fundraising, and are about to go on a buying spree to increase their valuation even further.

Note: This issue is sponsored by our friends at RAD AI. As always, we think you’ll find it informative and fair.

Summary

• Investment type: Priced round

• Accreditation: Open to both accredited and non-accredited investors

• Location: Worldwide, except Canada (sorry!)

• Minimum investment: $250

• Hold period: Long-term. Goal is to take RAD AI public.

Round closes Apr 29

Invest in RAD AI →

The messy world of Martech

We don’t need to tell you how important marketing technology is. The industry is worth a whopping $155 billion in the US, with a ​CAGR of 44%​ over the past 12 months.

The artificial intelligence (AI) software market has experienced explosive growth in recent years too — just look at the ​revenues​ worldwide from 2018 to 2025 (in billions U.S. dollars). Chart courtesy of Statistia.

You’d think that with so much money pumping into the industry, marketing optimization wouldn’t be an issue, right?

Well, in reality, content marketing is still a black box of confusion. All businesses want to find something that resonates, but are usually way out of touch with what people really want: authenticity.

​33% of marketing budgets go to waste​ — that’s almost $75 billion each year. People are bombarded with lazy, numb ads which get ignored and deleted.

The solution: RAD AI ✨

RAD AI believes they have the key to accurate, authentic marketing. They know customers want to be spoken to, not at. Their platform uses AI to tell businesses not just what content to make, but also why.

The backbone of RAD’s authenticity is its artificial intelligence, which analyzes what real people on the internet are saying.

It all begins with their API partner, Reddit.

As most of us know, Reddit prioritizes authentic conversations between real people sharing their honest experiences, opinions, and feelings. This makes Reddit particularly relevant for marketers looking to better understand target audiences and the messaging they care about most. .

Think Reddit comments, Twitter statuses, and blog posts. RAD AI takes all this noise and wraps it into a neat, digestible package that businesses can use to create authentic marketing campaigns.

RAD AI correlates real-time conversations across the web with demographics, in order to provide businesses with this very important context.

And the cool part about RAD AI’s tech is that it offers intelligence before the business starts their marketing campaigns.

See how RAD AI helps brands →

What problems does RAD aI solve?

Eradicating bias

Prior to RAD AI, biased decision-making in influencer marketing programs was practically industry standard.

RAD AI has the capability to scrutinize extensive historical content patterns across various channels, which helps eradicate bias in creative direction and content creation.

This is achieved by diving into historical content, and “shaping” the AI to formulate accurate brand personas.

Marketing comes down to knowing your audience. RAD AI’s reliable, AI-informed personas become instrumental in directing content for influencers and paid advertising.

Influencer discovery

Influencer discovery is a critical, time-intensive part of any influencer marketing activation. Yet, present market solutions offer mediocre influencer search and discovery results.

To tackle this, overpriced agencies currently deploy costly resources to substantiate the recommendations they present to their clients. This means inflated fees and ROI ambiguity.

They analyze topics, voice tone, sentiment, audience demographics, and engagement to deliver score-based recommendations (not wild guesses).

Content strategy

Content creators face the challenge of ensuring their work aligns with a brand’s messaging and resonates with the intended audience. So RAD AI evaluates and rates content, images and videos based on the predicted impact on the target audience.

Our AI models engage in a comprehensive analysis of crucial elements like emotion, sentiment, and authenticity. This approach enables content creators to make informed decisions.

Can AI content still be authentic? RAD AI thinks so. Their platform translates marketing gibberish into authentic language that resonates.

How RAD got here

In the tumultuous times of the 2020 pandemic, RAD raised $977k from 1,000 investors, chalking up a modest success in its maiden crowdfunding attempt.

A pivotal moment for RAD came in late 2021 with the acquisition of ​Atomic Reach​, a Toronto-based company with a specialization in AI that influences behavior and outcomes through language.

They identified the big issues within influencer marketing and content creation, and anchored their focus on influencer marketing — a sector ready for disruption and with accessible campaigns and budgets.

RAD has a strong fundraising history.

• Their second crowdfunding pursuit in January 2022 raised $6.6m (many of them Alts subscribers!) and landed in the top 1% of crowdfunding campaigns for 2023.

• Fast forward to the precipice of 2024, RAD successfully has raised a total of $10.1m, plus an additional $17m which has been invested into the AI technology independently via Atomic Reach.

• Their valuation has increased from $5m to $56m less than 3 years

Today, RAD is poised to launch a Reg A+ offering slated for January of 2024, with plans to raise $30m through the crowd and existing investors.

RAD AI’s team

RAD AI has a pretty small team — less than 25 people.

​Jeremy Barnett​ is the CEO. He co-founded the fashion tech company ​Trendy Butler​ in 2013, which reached an ARR of $35+ million within three years.

In a recent coup, RAD AI welcomed ​Alex Wissner-Gross​ to its team. Alex has a PhD in Physics from Harvard University, 23 patents, and just sold his previous company for $600M.

The team is small, but it has achieved six exits so far.

What sets RAD AI apart?

Content authenticity is king when it comes to marketing. But in order for companies to know what’s “authentic”, they need exposure to what the customers are actually saying.

The framework for RAD AI’s success is a $20 million R&D investment.

This focus on creating a powerful product is where RAD AI gains its competitive advantage. The proprietary AI tech, acquired from Atomic Reach, has an accuracy rating of 92% from over 100 million marketing impressions.

RAD’s AI even beats Bert, Google’s language AI, by 30%.

The tech is powerful enough to scrape information from over ten years of historical data and 550m web pages, in order to create reliable, unbiased, and authentic marketing campaigns.

The team also has a grant from the Canadian Government with 40% of dev costs subsidized.

ChatGPT 4 integration

RAD recently ​integrated Chat GPT-4​ through their API to take their client and product offering to the next level.

They basically take Chat GPT-4 recommendations and score them based on how their own AI predicts each creative concept will perform.

RAD’s tech combined with Chat GPT-4 will delivers unbiased creative intelligence for clients and produce quantifiably better ROI.

Case study: AI vs regular content

RAD’s own research has demonstrated that AI-driven marketing campaigns significantly outperform others.

One of RAD AI’s most successful campaigns was for a major company in the entertainment industry, who wanted to measure AI vs non-AI content.

The business saw an impressive 3x ROI over their previous marketing efforts.

The process

To get that 3x ROI, they had to go through a few steps:

1. First, RAD AI used its technology to perform pre-campaign analysis by browsing Reddit, TikTok, Instagram, and other social media outlets, to find the perfect target audience.

2. Once the audience had been identified, it was time for RAD AI and the company to develop a content strategy.

3. Finally, the content for the marketing campaign was created and distributed across multiple media channels.

In this case, RAD AI managed to identify micro-communities — an incredibly important segment for entertainment providers to tap into.

The results

• The business recorded a 197% increase in engagement rate with content

• The creation of 397 content pieces

• Over 6.8m impressions

• Over 750k engagements

On average, their customers see a 4x increase in content volume for the allocated budget, and experience a 250% performance increase across every digital marketing channel.

In a similar case, a client in the men’s vitality industry was starting a new marketing campaign with written, visual, and audio elements. They went to RAD with the idea that they should target men in their 40s and 50s who may have some trouble…er, getting it up. 🍆

But as it turns out, this wasn’t actually their biggest market. It was 20 to 30-year-old men. (Yikes!)

If you think about it, most older men with performance setbacks are probably going to see their GP. But RAD AI realized that younger men building their careers and always on the move may need that extra little edge.

RAD AI gave the company valuable demographic data to guide them during targeting.

Here’s a video showcasing RAD AI in action:

Read more about the AI →

2024 M&A plans

RAD AI is embarking on an ambitious buying spree.

Building on their current crowdfunding round valued at $56m, they aim to elevate our valuation to $87.5m in the upcoming Reg A+ set to launch Q1 of 2024.

Funds will be strategically deployed to acquire smaller agencies,

The goal is to integrate them with RAD AI’s technological solutions, and consolidate their market position.

Agencies lacking AI capabilities face a significant disadvantage, presenting RAD with a remarkable opportunity. And their technology is poised to enhance critical aspects of agency operations, from new customer closing rates to client value and retention.

They say their first M&A target is already identified, with a closure expected in Q1 of 2024, and there are more targets in the pipeline.

Investment opportunity

The investment is a priced round, hosted by ​WeFunder​.

RAD AI has valued itself at $18m. This means the price of a share is worth ±$0.18.

If you’re investing, you’re essentially betting that the company’s value will eclipse this figure in the future. Investors worldwide (well, except Canadians) can get involved for as little as $250.

This raise is going well so far. Over 3,500 people have invested $3.7m.

Fund distribution

Ultimately, the goal of this fundraiser is to scale the business while continuing to improve the underlying AI technology.

• 55% will be used to develop the primary AI product

• 20% of the raise will be used for building a sales team

• 20% will be used for marketing and brand management

• 5% will be used for Wefunder fees

Financials & others

Let’s look at some more company stats and details that are worth considering:

• $2.2m revenue run rate with 310% YoY growth

• In 2021, YoY revenue jumped from $169k to $515,000

• The company has $600k in liabilities

Remember that forward-looking projections cannot be guaranteed.

The “land and expand” strategy

Invest in RAD AI →

What we like 🤩

• Industry strength: Investments in AI companies are ​booming right now.​ This can increase the odds of a future successful exit — whether through an increased valuation in subsequent funding rounds, acquisition, or IPO.

• Total Addressable Market: RAD AI’s 2022 estimated revenue of $2.2m is just a fraction of the overall $155b spent annually on advertising in the US.

• Client traction/market fit: RAD AI already has clients using its services, which have produced impressive marketing campaign results. They’re starting to work with ​influencers​. There is clearly a market for what RAD AI offers.

• Recurring nature of revenue: SaaS clients often sign multi-year contracts, ensuring long relationships. Companies are often hesitant to eliminate/switch SaaS products that they rely on.

• Constant updates. RAD is busy with new product updates (like ​RAD Visual Art​), and communicates each one extremely well.

• Solid backing. They have backing from Fidelity Investments, ($4 trillion AUM) and have been featured in ​Bloomberg​, ​TechCrunch​, ​Nasdaq​.

Potential risks 🤔

• Risks of startup investing: Any investment in a startup is risky. Though RAD AI has shown impressive early results, there is no guarantee that they can scale to profitability and continue to win market share/customers.

• Customer concentration: RAD AI’s current revenue base is concentrated amongst eight customers. The loss of one or multiple of them would significantly impact revenue and extend the timeline to profitability.

• Marketing/R&D spend: Like other SaaS companies, RAD AI will need to continue to spend significantly on R&D (improving their product) and sales/marketing efforts (extending awareness of their product and sell/upsell to increase their customer base).

Closing thoughts

Can AI content still be authentic? RAD AI thinks so.

The demand for authentic content that can generate an emotional response is obvious. Venue promoters, sports leagues, and hospitality companies are just some of the industries crying out for marketing innovations. RAD AI is offering access to artificial intelligence that understands emotions and delivers authentic content for the entire marketing mix.

The team’s devotion to the technology is clear. The company’s future success will depend on how well they continue to develop and implement it across various sectors.

Of course, investing could be risky (again, that’s startups for you). But their management has an excellent track record of taking businesses to exit. There’s no reason that RAD AI won’t be the next successful business to join their glowing (and growing) portfolio.

Invest in RAD AI now →

ALTS Disclosures

• None of the authors of this issue currently own any shares or assets of RAD AI

• We have no RAD AI shares or assets in the ALTS 1 Fund

This issue has been a sponsored deep-dive, meaning Alts has been paid to write an independent analysis of RAD AI. RAD has agreed to offer an unconstrained look at their business & operations. RAD is a sponsor of Alts, but our research is neutral and unbiased. This should not be considered investment advice, but rather an independent analysis to help readers make their own investment decisions. All opinions expressed here are ours, and ours alone. We hope you find it informative and fair.

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