Today,Axle.ai announced it had received over $1m in orders to date in 2021, up from its 2020 tally of $667k and positioni...
Video management tools are really primitive
There are about 400,000 teams worldwide who shoot and edit video, a number expected to grow to 600,000 by 2024. Almost every company, brand and venue is ramping up video creation to reach their audience. Yet the tools to pull together the right content for editing are often as basic as loose hard drives, Post-It notes and the odd spreadsheet.
Studies have shown that a huge amount of time is wasted just trying to find relevant content; further costs are incurred re-shooting material that's already been shot because it can't be found.
Solving a key problem in video
axle ai is hybrid cloud browser software that helps media teams search and manage their video content. We harness cutting-edge machine learning tech and software development tools to build our shrink-wrapped platform.
We've sold to hundreds of emerging and growing teams across corporate, sports, church, political and educational markets, and make the onboarding process as frictionless as possible. That's in sharp contrast to the traditional offerings in this space—semi-custom enterprise software, generally priced $50,000 and up, targeting traditional broadcasters. The space is also attracting significant new entrants as well as M&A activity.
Lightweight but powerful
axle ai has three main products: 1. our flagship axle ai 2021 software, which lets remote teams search, tag and manage their media through a radically simple browser interface; 2. connectr.ai, our no-code visual workflow tool for media that builds cost-effective automated video processes, and 3. our ascribe.ai freemium plug-in and app, for automated speech transcription.
All three products are shipping and generating revenue. Together, they represent over 90 person-years of engineering investment.
Major enhancements to axle 2021 include a range of new plug-in panels for the Adobe Creative Cloud suite (Premiere Pro, AfterEffects, Photoshop, Illustrator, InDesign) with full support for remote teams and proxy/high-res workflows.
$667k revenue in 2020
- Gross margins of 90%, as well as minimal marketing and travel costs, resulted in reduction of net operating losses from $243k in 2019 to $160k in 2020.
- The shift to remote work has driven interest in our products from new incoming leads and the significant industry mailing list (40,000+ contacts) which we've grown organically.
- Most of our conversations and sales are with prospects who have never bought this kind of software before, which implies that there's a large untapped market.
- 2021 year-to-date revenues of $416k are up 116% over the same period in 2020; last-12-month revenues are $891k.
Used by major brands
axle ai has over 700 customers to date, including many of the world's most recognizable sports franchises, brands and media companies. Our customers tend to be the heads of video departments at these larger organizations; axle's software is generally deployed in workgroups of 3 to 30 people.
We also sell to many smaller production companies, documentary teams and even the video teams for several presidential candidates, and media teams like Eon Productions (producers of the James Bond films) and country star Kenny Chesney. To date, most of our sales have come from inbound leads; we are ramping up outbound sales staff and activities to broaden our reach.
Software = high margins
axle ai's revenue stream, with gross margins of 90% in 2020, is a mix of software license sales, recurring revenues from software use and professional services. Typical axle ai sites have a lifetime value (LTV) averaging $13,000 at a customer acquisition cost (CAC) of $3,500.
We're seeing growing traction when offering joint solutions with partners, including $6bn/year storage industry leader NetApp (with sales to CA and NY state governments).
In mid-2020, we had an acquisition offer from a public company which would have led to our integration into a 'stack' of proprietary storage offerings. We decided to stay independent; we're convinced that a huge opportunity exists for a storage-agnostic software play in this space.
The market for equipment to capture and store video is massive, and growing quickly. It's estimated that by 2024, over $16 billion (up from $6.9 billion in 2017) will be spent annually on data storage devices housing pro video, and nearly twice that on high-end video cameras to capture that footage. We're building our business around the idea that editing teams will need some sort of tool to manage all the files that are created – whether working from home, from the office, or on location at events.
While the number of these teams is growing rapidly, the cost of the tech needed to house and manage their content is dropping quickly. For the first time ever, a small team can affordably implement networked storage and keep a shared version of all their footage, and archive older material to the cloud as needed.
That's a huge step up from the typical stack of loose hard drives, which were really just digital versions of videotape with better access. What's missing today is the software toolset to help these teams search and manage this content.
Increasingly hot space
In the last 6 months, two public companies have targeted the media management segment. Vimeo (NASDAQ: VMEO) launched their Video Library offering days before their recent IPO, and Quantum (NASDAQ: QMCO) acquired Square Box Systems, a legacy competitor to axle, in one of 11 M&A transactions in this space in the last 8 months. In addition, well-funded startup Frame.io announced a cloud media management offering, and others may follow. Main competitors to axle ai are as follows:
1. Larger systems companies - Sony, Avid, Dalet and Grass Valley all offer bigger, pricier solutions for video management, but they're beyond the reach of axle ai's targeted audience.
2. Network storage companies - Video specialists EditShare, SNS, Facilis and now Quantum offer bundled software in this space. They're more limited in reach based on close hardware ties.
3. Video tagging and transcription companies - Veritone, GreyMeta, Rev and Digital Anarchy all focus on harnessing AI in the creative space, but don't compete directly with axle.
4. Major cloud companies Google, Amazon, Microsoft and others all provide powerful solutions in the cloud, as do Vimeo and Frame.io. As yet, none of these tackle key aspects of on-premise video storage, which is where most video content lives.
We make video smarter –searchable and manageable from anywhere
With a major push from 2020's COVID experience, video is on its way to becoming the primary medium of communication for the world’s 7 billion inhabitants. Meanwhile, machine learning can now transcribe video quickly as well as analyze, in depth, nearly any type of video content.
axle ai has grabbed an early lead in enabling small, agile teams who shoot all this video to search and manage their material, by leveraging the power of artificial intelligence and an easy-to-use browser front end. We hope you can join us by investing, as we solve one of the biggest problems out there – making video smarter.
Backed by Jason Calacanis
Industry heavyweight Jason Calacanis has invested $100k through his LAUNCH! accelerator, and recently Stadia Ventures, North America's leading sports tech accelerator, also invested $100k.
Other investors include Quake Capital ($150k) as well as strong list of industry-savvy angel investors including Google's Tejpaul Bhatia, Silicon Valley NAS pioneer Larry Boucher, media tech analyst Mike Vorhaus, Apple veteran David Feldman, Mark Kalow and Ro Toyoshima.
axle ai's 2020 Republic Reg. CF round was oversubscribed.
The right stuff
Cofounders Patrice Gouttebel and Sam Bogoch have worked in software for decades and understand the creative apps space deeply. Sam was previously Director, Software Development at Avid (NASDAQ: AVID), a video software leader now valued at over $1bn. At Avid from 2007-12, he managed a 100+ person team driving rapid growth in departmental Interplay/MediaCentral products – sales grew from $17m in '07 to $55m in '12.
Patrice, formerly product manager at SeeFile, a digital asset management startup, has a strong combination of software, IT and business skills. Our third cofounder and VP of Ops, Katy Scott (also from a media background) joined in 2013, 9 months after our launch. We love the challenge of taking media to a whole new level.