⚡ 02 May 2024: Anthropic + Otis AI

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Otis AI

Blurb: Digital advertising is expensive and requires expertise from an agency (or internal team) to obtain worthwhile returns on ad spend. This expertise comes at a high cost and is not tailored to SMEs, leaving a large, underserved market.

Otis.ai is an all-in-one paid digital marketing solution enabling start-ups and SMEs to seamlessly manage paid social ads on Facebook, Instagram, Google, TikTok, and YouTube in a cost-effective way. An AI-driven platform that improves marketing performance, optimizes ad spending efficiently, and maximizes ROI.

Highlights:

  • An experienced team with prior exits. The CEO built the world’s largest Minecraft server (5M users) and founded Tabu, a Point of Sale (POS) payment system for SMBs. The CRO sold his prior data venture to FirstData in 2015 for an 8-figure exit. COO, former VP and CIO at Verizon.

  • All-in-one platform for campaign launching, campaign strategy, design, and automated campaign management. With numerous integrations with CRMs, e-commerce, and POS systems to build data-powered customer profiles.

  • Creates predictive success scores and provides dynamic budget and bid functionality.

  • 370% revenue growth, ARR $1.23m, CAC/LTV of 3.84, CPA 8.41. Net burn has improved with $60.8k in Q3 ’23 over $93k earlier this year and burn multiple has also been steadily decreasing, collectively denoting capital efficiency and strong unit economics.

  • The U.S., being the initial market focus, represents a significant opportunity - SMBs in the US make up 44% of total GDP ($9.6T) and recommended ad spending on revenue is 7-8% for these companies. A growing market with a CAGR of ~10% to 2030 has been forecast.

  • Growth trends indicate significant market pull with strong customer success and low churn (~5%), demonstrating strong product market fit. Their customers get an average of 10x ROI/7.9x ROAS and at least 2-3x improved performance.

Deal Stage: Series A
Round Size: $2M
Valuation: $20M pre-money
Minimum Ticket: $2,500
Co-Investors: Studio VC and Vibranium VC, two notable US funds with a strong track record
Fees: 4% fee + 20% carry
Deadlines: commitments by 6th May - fund wired by 8th May

This will be considered a soft commitment. Upon submission, your details will be forwarded to the fund managers overseeing the deal. They will then provide you with the pitch deck, investment memo, deal sheet, and all necessary information for you to research this opportunity thoroughly. Once you are satisfied, you can submit your hard commitment directly to the fund managers, who will then secure your participation in the deal.

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Anthropic

Some of you may have seen there have been several allocations available in Anthropic in recent weeks - this is due to the FTX share sale. We have managed to secure a share price of $30.75/share, which is one of the best we have seen on the market.

We believe this will be one of the last chances to invest in Anthropic at an attractive valuation. For context, the entry valuation is the same as x.ai's recent fundraise but Anthropic has a significantly higher level of traction and time in the market.

Blurb: Anthropic is an Al research company started In 2021 by Dario Amodei (former VP of research at OpenAl), Daniela Amodei (former VP of Safety and Policy at OpenAl), and nine other former OpenAl employees, including the lead engineer on GPT-3, Tom Brown.

Amongst foundational model developers, Anthropic has positioned itself as a company with a particular focus on Al safety and describes itself as building "AI research and products that put safety at the frontier." Founded by engineers who quit OpenAl due to tension over ethical and safety concerns, Anthropic has developed its own method to train and deploy "Constitutional Al', or large language models (LLMs) with embedded values that can be controlled by humans.

Highlights:

  • Claude 3 has been making huge waves in the last weeks, widely reported to be outperforming OpenAI’s GPT-4 to become the best Large Language Model (LLM).

  • ARR could hit $1B this year, a 100x increase from 2022.

  • Generative AI is forecast to be a $1.3 trillion market by 2032, up from just $40 billion in 2022.

  • Anthropic’s focus on safety and accuracy is a key differentiator and is expected to become increasingly important as models are used on more complex parts of the economy, particularly in business use cases.

  • Anthropic had a stunning year of fundraising, bringing in $7.3 billion last year, including up to $4B from Amazon and $2B from Google.

Deal Stage: Secondary (after a Series D on Dec ‘23)
Valuation: $16.5B pre-money
Minimum Ticket: $5,000
Fees: 5.5% fee + 20% carry
Deadlines: commitments by 10th May - fund wired by 16th May

This will be considered a soft commitment. Upon submission, your details will be forwarded to the fund managers overseeing the deal. They will then provide you with the pitch deck, investment memo, deal sheet, and all necessary information for you to research this opportunity thoroughly. Once you are satisfied, you can submit your hard commitment directly to the fund managers, who will then secure your participation in the deal.

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