Startup Battlefield Competition - Flight #3 | Disrupt SF (Day 2)
10:50PM Sep 6, 2018
Sher Ali Butt
Hello, hello. Welcome back to the startup battlefield. And those of you who were here yesterday know exactly how this works. We're going to have five startups on stage over the next hour, they're going to present for six minutes. And there's going to be six minutes of q&a from the expert judges. Check TechCrunch tonight and you will see a list of all the finalists. Those finalists will be competing tomorrow for $100,000 and the disrupt cup. And with that, let's bring in our judges.
First up we have Shauntel Garvey, co founder and general partner at reach capital. She invests in educational technology companies focused on access and opportunity. Next up we have Aaron Patzer, he was the founder of Mint which was basically the first winner at a TechCrunch startup conference last year, he started Vital Software which makes software for hospital emergency rooms and aims to cut ER wait times in half. Next, we have Catherine Ulrich, Managing Director at Firstmark Capital.
She invests in a broad range of enterprise and consumer startups. Previously she was the Chief Product officer at Shutterstock. And at Weight Watchers.
Next up, you may recognize him from earlier today it's JD Vance, managing partner of Revolution's Rise of the Rest Seed Fund. He also wrote the number one New York Times bestseller hillbilly elegy. And last but not least, we have Ellie Wheeler, a partner at Greycroft, based in New York City. Previously, she worked at a similar role at lowercase capital.
give it up for our awesome judges.
And with that it is time to start this battlefield. Let's bring out our first company CB Therapeutics, presenting for CB Therapeutics or Sher Ali Butt and Jacob Vogan coming out.
Bud, Mary Jane, weed, chronic. Negative terms associated with crime and degeneracy.
You probably heard these terms before as slang for cannabis.
THC, CBD, cannabinoids. You're probably less familiar with these terms but they've been shown to have medical benefits as the compounds contained in cannabis. Hospitals at UCSF and UCLA have recently demonstrated that cannabinoids mimic compounds already found in the human body.
Today cannabis support in the public opinion is at an all time high. Why?
Well aside from recreational uses, cannabinoids have been demonstrated to have medical benefits for a suite of ailments. The rise of global legalization globally means reduced crime,
greater medical applications and tax benefits for social programs.
Cannabinoid products already exist in the market today, but they're riddled with quality and supply chain issues such as contaminants, long supply chain and different batches on each crop.
CBD and THC are the two most abundant cannabinoids in cannabis. But what you probably don't know is there's 120 other cannabinoids that are less than 1% of the cannabis plant. And therefore these compounds are hundreds of thousands of dollars per kilogram.
Introducing CB Therapeutics, a biotech company that produces pure cannabinoids using a bio synthetic contaminant free and easily scalable process. Our proprietary process extracts the genes from cannabis and expresses them in yeast. Once the yeast starts fermenting similar to basically making beer, we're able to extract pure cannabinoids from it. Let me show you how this works. Move to the demo, please.
So the initial step is just to take the sugar and the yeast and mix it together into a bioreactor. The bioreactor optimizes for yeast growth. And after five days of fermentation, we're now ready to harvest our crop of yeast. We do the extraction process by simple non volatile technique followed by a high performance liquid chromatography purification leading to pure cannabinoids. Move to the PowerPoint please.
CB therapeutics is unlocking rare cannabinoids with unique properties. Our platform has the ability to decrease costs by 10 x. Reduced reduced production time to just five days, all while delivering a pure product.
At CB therapeutics, we're unlocking new therapies using these rare cannabinoids for pain, anxiety, cancer and more. Eliminating the need for dangerous drugs such as opiates, which killed over 35,000 people in the United States alone last year.
We have indirect competitors that use plants such as general hemp and GW Pharma that produce a moderate to high price point product that's usually contaminated with pesticides or other heavy metals and you're only limited to two or three different types of cannabinoids. We also have direct competitors. companies that use some form of biosynthesis, such as hyacinth or in med that produce a low to moderate price point product that's relatively pure. However, these companies are years away from scaling up and manufacturing in the California cannabis market. cb therapeutics produces a pure product that's price competitive.
We're going to be the first ones to commercialize and manufacturing. Here in the California market.
The cannabis market in the US last year was $8.2 billion.
And California alone
was 45% of it.
In the future. We're looking at other markets such as pain and anxiety, which has a combined market value of over $73 billion.
We filed their patent in 2016 and we are waiting decision in the next two months. We've also verified production of 15 different cannabinoids in our yeast using the Scripps Institute and other third party testing labs and up till recently in fact six weeks ago we acquired all the assets and manufacturing facility for a previous biotech company here in California enabling us to be the first bias that that a company to start scaling up and manufacturing
the this is our product which is pure cannabinoids isolates initially we're going to sell it to customers in the cannabis industry. Some of whom have given us lol is for over 250 million dollars. These companies are in Europe and North America. In the long run. Our plan is to partner with other research institutions like the UC system and take these rare cannabinoids through clinical trials with the hope of getting FDA approval. For some of them.
Our team has deep domain expertise in synthetic biology and cannabis science. I was lab director at steep hill, the largest cannabis testing lab in the world. And I also work for Novartis commercializing drugs with the FDA. Jacob has a PhD in bioengineering from UC Berkeley and has 16 published papers in the space
we have a team of experts in synthetic biology, analytical chemistry and bioinformatics on our team as well.
cb therapeutics is changing the face of the cannabis industry by providing very cannabinoids for new innovation in healthcare.
pharmaceutical products and affordability for consumers. Join us at www dot cb dot com. Thank you.
can you tell us about the I guess customer experience? Basically, how does it feel
It's so it's the exact same thing that the plant would make. So you know, our focus right now is on CBD. So technically, CBD doesn't actually have a psychoactive effect. But it does have more of a relaxing effect. The benefit of this technology is that it's actually bio identical. So typically, when you have a synthetic product, it's made, it's different in nature. With this, we're using actual plant enzymes. So it's exactly 100% the same thing that the plant would make.
And I can imagine there might be some challenges going from pilot production now to full scale production. So can you just talk about make me what some of the production challenges may be and then how you're going to ensure quality assurance throughout the process?
Great question. So with this new facility that we just acquired, it's already a full scale pilot manufacturing plant. We're bringing in people that are experts that have actually set up that facility. We don't think that based on the team and the facility and where the technology is that we're going to have too many challenges in the future. But again, there may be unexpected or knows in the future.
one question on the process, how unique is this in terms of the process you're running to develop them and can we use for other compounds outside of CBD in the future?
Absolutely. So it's unique in the sense that we're patent pending.
This platform can be scaled up for other different types of compounds. In fact, we're getting some companies that want us to manufacture stuff outside of cannabinoids that we may look at at some point.
Could you talk just a little bit about clinical benefits in the context of customer need, because what I'm trying to get a sense of is, for example, you compare the clinical outcome or at least to the need to opioids and pain. It's hard for me to believe that a product derived from marijuana could be as effective at pain management as Percocet but maybe that's wrong. I'd love to just hear what the the evidence is on the clinical efficacy
You're absolutely right you know some very strong opiates there's nothing that can parallel that effect but there are some effects of pain relief that you're able to maintain with CBD and other cannabinoids when it comes to the rare cannabinoid side, there's so many of these compounds except for maybe three or four that haven't really been tested because they're so rare. It's you know, just doing a clinical trial would be millions of dollars. For example, there's some new cannabinoids that have been shown one called THC V, which has been shown to suppress appetite. Ironically, it's found in cannabis. There's another one that has been shown to be a bone stimulant. So there's so much there's so much that we don't know today. And that's the whole point is we need to be able to manufacture these products in a cost effective way where we'll be able to do clinical trials with them.
So you said you're starting and CBD but you did talk a lot about some of the other more rare compounds so as what a starting and CBD mean to us, are you actually selling to some of these skincare products that we're seeing some of the more kind of CP g type applications or what does it look like?
Absolutely. So we have almost $300 million in lol and I think at least 200 and something of that is just for CBD for companies that want to put it in skincare, creams, lotions, shampoos, things like that. As far as the other compounds go. I think the biggest thing for us is looking at where the market is going. So when we go out there and talk to customers, we initially thought that we would get a lot of orders for THC but that's not even something that people really want that much I think they want something that's easily you know, ship a bowl that doesn't have too many psychoactive effects that has medical benefits. So in the future, we will commercialize the other ones as well.
What's the regulatory environment that you're in and how long will it take you to actually get the market.
So in terms of regulation, the way that it's going to work is in California. You can't sell anything until you have a California cannabis manufacturing license. In fact, you were able to import CBD from hemp into the state that's been banned about a month and a half ago. So anything that being sold here has to be manufactured within the state. So from that perspective, we're about four and a half months from getting our state approval.
And at that point you'll be able to sell
We will be legally be able to manufacture and sell the product. Yes.
Can you talk about how much of this you've actually manufactured in terms of pounds kilograms times.
So we've demonstrated that it works by doing third party testing as far as manufacturing large quantities, that would be illegal so we're waiting to get the license before we are starting to manufacture and sell the product itself.
So then how do you know how much you will actually cost I guess part of this is getting to the fact that there's there's a lot of marijuana in the market. It's very highly profitable. I don't at this point, see Why there's a tremendous benefit to having something that's a 10th of the cost or even where you get that number from?
That's a great question. So the first part of it is we have estimates of how much the production facility costs in terms of running expenses, the people, the scientists, we bring in there. We've also gotten third party quotations in terms of how much it would take to outsource production at a biopharma facility. So that number is derived from you know, analysis of those in terms of the second part, I think, you know,
no matter how efficient plants get, they will not be able to make these rare cannabinoids in large quantities. So receive you know, it takes 10 years to breed a you know, cannabis strains that are 5% higher in THC. For example, you know, I've been testing cannabis since 22,009 at steep hill. It took 10 years to bring cannabis strains from five to 7% CBD all the way today to 20%. So it's going to take another 1015 years for these rare cannabinoids with plant genetics to catch up. And until that happens, there's no alternative.
I'm sorry we're out of time. Give it up for CB therapeutic.
Okay, let's bring out Lori was any for Lori are Josh Sandler and Jean Claude Homawoo.
Hey everyone, I'm Josh Sandler from South Africa. This is Jean Claude from togo and with get shimmy who's in Nairobi, who's from Kenya, where the co founders of Lori the company powering logistics in Africa. When you purchase something in Africa, you pay significantly more than you should. Why logistics? If the continent had the US cost contract as the US you would be paying up to a third of the price whether that's fertilizer, cement, or bag of grains. This is a pain point we have felt our entire lives
and the logistics system on the continent is broken poor
logistics drives product cost inflation which limits consumption hinders export potential and prevents global competitiveness
this okay cargo as an example when Cargill one of the biggest movers of commodities on the continent who's responsible for getting grains to Miller's who make flour for the consumers to feed the population when Timothy from Cargill the head of logistics has to get trucks he'll call 40 different transporters, 30 of whom answer their phone 20 will confirm availability out of those 2010 will come to final terms but on the day of only three show up
you ask Timothy why and those in the market and they say the reason we can't get our product to market that impacting our bottom line is because the truckers are evil, terrible human beings
fit that's not the case the trends
Storage often go to the farm to pick up the cargo only to find that an equipment is broken or customs clearance documents aren't ready or any of the other emerging market externalities have occurred. And they'll wait for three four days not being able to make it to their next pickup. As you can see there is a lack of coordination and a lack of flexibility in the system
which is driving heightened costs and preventing this global competitiveness and efficient consumption. Enter Lori the company powering logistics in Africa. Lori provides us flexibility and centralized coordination that does not currently exist in the system Lori is a marketplace platform that gives cargo owners unparalleled visibility into their entire supply chain of trucking.
Lori for if trucks are delayed or start Lori will redirect other trucks to those locations for pickup it will optimize assets which leads to increased truck utilization and decrease costs. In just four months. Lori was able to bring down the cost of moving grains to Uganda by 17%. We now move about 40% of the grains heading to Uganda
move to demo
Lori provides. Lori collects data points throughout the entire journey to power decision making. We provide our customers with a easy to use dashboards that give them insights into their entire supply chain of trucking. They can see loading times offloading times delayed, they can better plan inventory through the system
that see for kind of near cargo when their truck has delayed, there'll be notified they'll have visibility into it and we will redirect another truck to go pick up that order we provided the customers further with
Push notifications that are consistent and give them peace of mind. On top of that they have access to our 24 seven Customer Service Center to help them with any of their needs. That's moved back to presentation.
We have a deeply experienced team who come from experts in logistics, finance technology operations. We have people who have led divisions of mercy led product at Google people have run $100 million supply chain businesses and I with a dual masters in econ and business from Harvard, wrote my dissertation on how technology can drive logistics efficiencies in Africa.
The past few months have been pretty wild for us last October, we're at a $6 million run rate of revenue with 10 cargo owners and 300 trucks. Since then, we have grown exponentially we now have 70 cargo owners 3000 trucks.
went from one country to four countries. We've contracted with some of the largest movers of cargo in Africa, Kuda, Nago cargo, Procter and Gamble, many of these are using Lori in East Africa as their exclusive providers for transportation services. We're pushing the rest towards that. Now, the market for moving cargo on trucks across Africa is huge, 180 billion dollars
today expected to grow to $500 billion within the next 20 years.
Right now we operate in Kenya, Uganda, Rwanda and South Sudan and plan to expand to four new countries within the next few months.
Global e logistics heavy haulage players include blackbuck, in India convoy in the United States and man bang in China. These players lack the necessary partnerships and context of Africa.
rica in order to grow there, we as Laurie remain the only proven scalable, tech enabled solution for moving your cargo across Africa. We invite you if you're a multinational player looking to reduce your costs of moving goods in Africa to join us today by visiting www dot lorry systems. com. Thank you,
sir. Thank you. That was That was great. So today, where's your constraint in the business? Is it in any marketplace? Right? Is it the demand or the supply side today?
If right now, it is a bit more of training up the drivers to be on the professional level that we intend for it to be on. A lot of the drivers have the infrastructures that's the compliance and onboarding that become a bit of a constraint. But we have been developing better systems for onboarding training mechanisms and whatnot to provide better solutions overall for the whole market.
So you talked about some of the other players not being able to build the underground local relationships and sounds like your team is able to do that. So you can just walk us through what that looks like, how do you build those partnerships? And then if you're going to expand, how do you kind of scale that, you know, partnership building to make this work?
Sure. There's there's a number of ways we can think about it. So the reason why these international players are not able to enter the market is because of these these sort of local dynamics. For instance, in speaking with transporters on the in the market, we asked them, you know, what's your biggest pain point and it's managing drivers, for instance, drivers might siphon she'll from the trucks for a variety of reasons. these are these are problems that we believe we can solve with product that help align the incentives of the drivers of transporters and the cargo owners. So these these are really things that allow us to build our presence in the market and and defense really the the early mover advantage that we have
Yeah. Just to describe another example really quickly when we had another trucking company paying offloading facilitators to underway our trucks, our relationships and networks in the market allowed one phone call to make that trucking companies toppling us. And those kind of relationships become very localized. But we have been building these pan Africa relationships for 20 years.
So when you go to a new market, you build new relationships, or do you get people on the ground or
we're expanding a lot with our current customers. And then as well as what's new providers who have already been developing.
So the relationships with these multinationals that we've built, obviously these multinational so pan African, right, so once we do a good job in a given market with them, we're able to scale to other markets by working with them and leveraging those relationships.
You talked a little bit the driver experience. Can you tell me more about that? What does it feel like to be a driver today and what will be on your platform and how will you align the incentive
Being a drivers tough I mean these guys are really really skilled I've been written on a lot of trucks they'll have like an inch on each corner and be maneuvering through alleyways essentially they're exceptional right now it's tough it's you're on the road all the time you're never with your family you're just being yelled at no one there's a lack of respect. These are like lower income individuals who are hustling to get by and they don't have the respect. So they're incentivized, in many ways to they're encouraged to fuel siphoning and other forms of salary and revenue. So we're working with them to better incentivize the process the drivers now call us when they have issues because we don't scream at them and they have started like pushing a lot more information to us so we have better visibility into the entire ecosystem with
with their upside are they gonna make more money in your platform or why
correct so they will be able to collect their payment much faster because of the methods will, we will be using through the product, happy to give you additional detail on that, because I think that is part of the secret sauce for us is really creating additional value for drivers that is currently not available to them. Like Josh just said, they're really at the bottom of the pyramid today. We think that with these services, we will give them a lot more power and a lot more control into their ability to do these gigs and get paid in a timely fashion.
And and just to tie that all together, we increase their asset utilization so we can take a margin on the business because they do more trips when they're on our system. And we do some other financing products that support them.
You have mentioned three times in the q&a, what would be called fast or corruption either on the driver side or along the way on your website. You say that 76% of the cost of goods is logistics and transit whereas it's six or seven percent in the US. That's a huge discrepancy. How much of that is in nature to
bribery, poor infrastructure, poor rule of law enforcement of being able to go after people who take an entire truckload of things? How far can you drive that down and how do you solve those problems?
So we've done 7000 trips in the past little while actually I'm not going to say the exact dates out of those yeah
we've had zero the last of any incidences on scale and the last 7000 trips and and just to tie that all together people use these as excuses they say the roads poor so you know it has to be a high x
like high expense and all that stuff Mombasa Nairobi it takes 12 hours to go 300 kilometers that's that's not great but you're doing one trip a week. So that's not what's driving the utilization factor isn't the infrastructure isn't easy excuse out and to say hey, look, it's the optimism of the assets
bribery and corruption.
We've never like encountered it like everyone
engine siphoning gas twice as well as the weight of your trust us
siphoning gas is perceived in this context as essentially a waiter at a restaurant having a meal at the end of a meal having a free food at the end of the meal. It is a normalized and it is perceived it is not perceived as legal or corrupt. It's known as being probably not the best thing to do. But they're seeing it as an opportunity
for those I guess for those of us in the West who would see that potentially as theft. What you're basically saying is over there if if I don't consider it illegal, it's not and that makes me uncomfortable as an investor For example
I think there's there are there's a clear line sorry, what's the
Okay. So you
clearly have that gap right of that difference in margin there's a there's a big part of it that we won't be able to directly affect. However, a lot of big part of the cost component is due to operations, allocation and utilization. Those things can be resolved with software. And that's what we're here for.
All right, one more round of applause for Lori
all right let's bring out our next company kid sense presented with kids sense our Kaveh Azartash and Jock Thompson and I believe a special guest
Wow. Well, we couldn't be more excited to be here. Introducing the first edge voice AI solution for children. Now if you're a parent, you may recognize this. This is how my daughter looks when a smart device doesn't understand her. It's pure frustration only followed by anger and you know, sometimes the yelling
almost all of our devices are our soon will be controllable by voice
but kids linguistic patterns are so different than
Adults that speech recognition built for adult just doesn't cut it.
And what's more, even doing it poorly. Many of these devices process their speech online, putting our children at risk and potentially violating several new kids laws.
I mean, do we really want to keep seeing headlines like this
kid? speech recognition is a bad experience for kids and parents alike
me kid since we enable kids to speak to technology securely by providing our SDK to device makers who put them in smart speakers, wearables, toys and apps kid sense is the first and only edge voice AI solution built for children.
Now edge AI means we take large algorithms and process them locally on a hardware device. It provides better privacy latency reliability.
the cornerstone to any children's edge voice AI solution is a powerful algorithm to convert their speech to text accurately.
When I first met my partners, they had already spent several years building children's multi language development and speech assessment tools.
The byproduct of this was an amazing amount of phonetically rich clean and tag children's beach data.
This is what we use for the foundation to build the best possible voice solutions for children under 13.
Let me show you how this all starts. Now let's move to demo.
So what we've done is we've taken a device and we've put a built a small demo app to show you the results and then we loaded a 10 megabyte kid sense speech recognition solution and we put the device as you can see up there by the airplane. It's an awful Android and what good where the kids product demo be without a kid.
Hi, what's your name?
My name is Zoe and I'm nine years old.
Hi. Hi, Zoe. Now, do you mind saying something into this device? For me?
I am a little nervous to be here. But my mom said, I can do this.
Excellent. So as you can see, we converted just always speech to text, real time on a device that's offline. So no data is shared in the cloud and guess what? Zoe's not frustrated or yelling. Right? Zoe?
Zoe, would you say one more for me.
This summer I went swimming and had lots of fun
now, because kids since operates offline. We don't have connectivity issues, better latency and better reliability means better user experience for our customers. Zoe, you got one more for me
when I grow up. I want to be an engineer.
Now, okay, because because we process is always speech to text online, we actually have the ability to select what data does go to the cloud or what day to get blocked. This is only possible because we process their speech to text data offline. Zoe, great work. Thank you. I,
You crushed it.
Now more than just speech recognition, our team has been for years building the model that provides our solutions. It starts with the data collection, which we use with our deep understanding of language acquisition to build children's specific sound maps and algorithms to train our neural networks. And finally, we use our proprietary method of quantization neural network architecture to build
children's edge voice AI solutions on devices using minimal processing power and memory. Now, I mentioned earlier there's several
new trial children's privacy laws these are COPPA GDP, K and CCP a, these laws threaten huge fines and they're actually driving demand to our products from the makers of children's interactive products. And the other thing these these laws are doing or creating really big barriers for all competitors who need to collect the targeted children's data to build solutions like ours now compared to the other voice AI solutions out out there. Now we differ by offering kid specific solutions, predictable pricing, privacy, and maybe most of all a long history of dealing with children's data.
This unique value proposition let's kid sense target the makers of the 1.6 billion devices that will be sold annually and SPSS by children under 13.
So we've got
Already, we've got traction. Sorry about that we've got traction already, it's pretty incredible. Actually, we're already working. One of the top three chip makers, a top toymaker, a top entertainment company in several robotics companies.
None of this could be done without our amazing team where PhDs, ai scientists, experienced entrepreneurs. And mostly we're parents. So if you're a parent, a grandparent, aunt, uncle or friend, look for products powered by kid sent and keep your kids safe and happy. And if you're building interactive children's products, you're going to need an edge voice AI solution that provides the best privacy latency reliability and cost visit us at www dot kids. sense.ai. Thanks.
So a lot of the parents I know are trying to get their kids to disconnect from electronic devices. And that's a pretty big topic if you have a kid under five or 10 years old, and I'm just wondering, are you little worried about To be frank what it called the creepiness factor of making it easier for your kids to exchange with Amazon or Google, whatever the case may be, as in an era where a lot of parents are saying, We want our kids to spend less time on their mobile devices, we will this the kids spend less time with electronics.
Yeah, I mean, the easy the quick answer to that is, is your there's a several range of devices, right? So we work with toys and a remote control that works with a kid. I mean, it doesn't always have to be a digital device. The reality is, sound is the new touch. I mean, there's no getting around it. So having an experience with these kids is it's going to be sound based. It's not always touch and it's not always a display.
Did you think about other applications for the technology? Have you guys talked about, you know, word processing for kids? Things like that.
Several products on the roadmap anywhere from kids with learning disabilities? It's a big one. Yes. So there's there's several products on that roadmap. But But again, it all builds off the, the foundation and the building of these algorithms that we've already started.
But do you guys seeing? I mean, you mentioned some numbers and the demand in terms of some of the players, but what is the average contract value size look like? What are people willing to pay for this. And the thing I'm looking at is the bars of how much better you are versus other large players in the market, and just how much people are willing to pay for the delta and the performance.
So we actually don't charge much delta and the performance if you look at what competitive products were out there now, like the embedded guys charge your licensing fee, we're actually in some cases on drum. So there's, it's we're not asking anybody to pay more for that fee. Now,
to be fair, in some instances where it's a device that has an adult speech recognition solution where we would add a kid speech recognition solution that would increase the price
down in the toy range. They don't have an adult speech recognition and that's where margins are the tightest when we start to get up into smart speakers in robotics, they have such great margins that they're not they're not really pressuring pushing back at all
Can you talk to us about what I would say is more of the actual market size you say 1.6 billion devices that kids will interact with. But I mean, really like what your specific market size in terms of how many chips go into toys. And what what that size of market actually is. So interactive dollar revenue? Could it be a billion dollars revenue? What's the potential here?
Okay, so the the, of the 1.6 billion I mentioned to 1.2 of that is smart speaker. The other 400 million or so is his actual kids, interactive products and wearables. If you were to talk to Qualcomm today, I think they would. I mean, I won't speak for them. But they would argue that kids wearables and speaking the kids wearables is one of their top markets they're going after. So I think the 400 million could grow, but I mean, that's the number we have right now.
And do you think you'll get $1 per device? 50 cents per device? What do you want?
So it was Without getting too deep into it. So you start with a kids device that our kids toy product margins are extremely thin. So will we actually work with integrated circuit guys there and make limited margin on huge numbers. But then as the as you see that matrix go up, we get into robotics and smart speakers. Again, the pricing goes up, you know, the volume certainly goes down a little bit,
I'll let you get away with a non answer that
So you talked about one of the value adds being privacy. And can you just double click on what you mean by this is a better privacy experience? And then also, I imagine you are collecting a lot of data about what kids are asking or does that data live on your servers that live in the supplier servers? Or how does all that work?
Sure, yeah, so we collect the audio samples from kids, but we never share the audio speech data with anyone. We constantly assess the tech space data, right to basically build better domains basically up the efficacy of ASR models and all that
there is never any data that will leave, or what's it called on the hardware, right? So being the speakers or toys and all that data stays there forever.
Also on the privacy point, do you envision it being an open SDK or you vetting somehow the people who are able to use it?
So we have multiple offerings actually, right? We have an open SDK for command words, things like call mom open door, right? We also on a bigger models on a more general ASR. We actually have again, different offerings for different model sizes, anything from like 1000 word all the way to about 50,000 word, right. So
down the line, there are more opportunities, you know, to do some of that, but at this point, the open source is only on our command words, which is basically for kids sort of on your smart watches or low end toys.
last quick questions.
All right. Give it up for kid sense. Give it up for Zoe.
Okay. Let's bring out our next startup fiber presenting for fiber are Obinna Okwodu and Demi Ademuson, come on out.
Africa is the world's next frontier market.
Let's take Nigeria for example.
Every year three and a half billion dollars is poured into the residential real estate sector in that country.
But this is nothing compared to the 420 billion dollars that is required to house one of the fastest growing populations over the next few years.
What this presents is an incredible market opportunity. But there are currently two factors that limited investments into the sector.
is that investments is restricted to big ticket investors who typically pay cash down for property.
There is currently no way
for the everyday retail investor like you and I to participate.
And the second is that the rental market is extremely fragmented, making it really hard to find that and manage tenants.
As a result, it is difficult to extract rental income from property.
I spent the last two years solving the second problem.
After graduating from MIT,
and working in Morgan Stanley's real estate team. I moved back to Nigeria and teamed up with today, and Adela engineer and Demi a behavioral economist.
To tackle this problem
over the years, we've generated over a million dollars in rental revenue for our partner landlords and have an occupancy that's over 97%.
But while running his business,
we've realized that there's an incredible opportunity for increased investments into the real estate sector.
And as a direct response to that we're introducing secure by fiber
secures a platform that allows anyone anywhere, invest in real estate on the continent
and get a return a rental return without ever having to lift a finger
through the platform.
Property owners and developers can list their assets for sale and investors have the ability to browse available properties acquire
Entire, or fractions of assets
and receive rental income directly from fiber.
Let's show you how this works. Move to demo please
now Maria ism middle management at a bank in Nigeria and she's been thinking about ways of investing money and growing our portfolio so she comes in our website right on the website you can browse through available properties right she likes this one this specific one in lucky which is a growing neighborhood in Nigeria and right on there she can she sees all the information that she needs right and she can request ownership verification documents she can schedule a viewing if she wants to just to get comfortable with her purchase. She does these things and you know she's she's finally comfortable but she doesn't want to buy the entire thing she wants to she wants to dabble. So she wants to buy a fraction of it right now the good thing is that we broken these properties into blocks. So she has the ability to do this right and this is what she does
now. She makes an offer for Two blocks of this property or representing 20% of it.
Now, once she does this, she completed her
her offer process. And once the offer is accepted, she gets an email with the documentation that she needs to sign in details about how to make a payment. We hold these payments in escrow until the until the entire transfer process is over.
After which we slide these assets directly onto our rental platform. And she be she can begin any rental income on her property
taken back to the presentation, please.
Now how do we make money we charge a 3% service fee and all seals that happened on the platform and a 15% fee on all leases that happened on the platform.
And as for competition
well locally The only competition that exists or a our online agency platforms and what these what these do is they allow people to list their property online for sale but help you don't help with the actual process.
sale process and don't help you find tenants for your property. Now, there are other buy to let
options that exist. But they are not playing in the emerging market space. And certainly not Africa like we are
in terms of the market. Well as about $50 billion, bought or sold, bought and sold in real estate on the continent right now, right, which is about a $2 billion revenue opportunity for us.
We imagine that as we scale to other emerging markets, and we increase participation in the space that grows to be about $25 billion.
We're launching the platform about $10 million worth of property to be sold and as a function of the partnerships that we've already planted some of the biggest developers in the country Nigeria, we might we we plan for this to grow to $50 million in three months.
Now step back a little bit, ladies and gentlemen, what
just showed you is a platform that allows anyone anywhere, invest in real estate in the continent and receive rental returns. This is one of the fastest growing markets in the world. And through this platform, anyone can partake in the tremendous growth that will be Africa in the coming years. Thank you very much.
Can you say a little bit more about just the strategy to secure amazing investors? So for example, how does in the Ria even find out about your platform? Or if I'm an investor, how would I find out about fiber? And what are the kind of costs associated with
so the initial market that we're targeting or local people in Nigeria, right, and we plan to use online marketing online. And there's a lot of people who are already in our system
that we can reach. But there's another market which is the Diaspora market who buys a lot of real estate on the continent, right, and that's a very easy target for us as well in online marketing will help us with that as well.
We focus on individuals and not institutions, so Hello, you know, allowing hedge funds to, you know, invest in pieces of the rental stream.
And so we're definitely doing that as well. Right? There's going to be a consumer facing product, or there's also a product for for institutions to invest as well. And we're already having conversations with them.
Are you doing any financing behind this is are you buying the properties purely on cash?
Not yet. So right now, we aren't necessarily financing anything, but we're having conversations now with bigger pension funds and bigger institutions, right, to help us front these purchases. So it works similar to an open door model.
And quick question, how do you handle the ownership if I own 20% and eventually want to sell or the entire property? How do you handle that one? It's a partial.
Right. So we're creating SPV. So when you have to make a purchase your purchasing interest in the SPV so you can enter an exit as you please
Can overseas investors trust insurance. In the Nigerian real estate market, I looked it up in the world corruption index in Nigeria ranks 148 out of 180, which is pretty bad.
So how do you build trust with overseas investors, I understand how it would work with locals for people overseas.
the way I imagined this works is that I don't imagine that right off the gate, we get a lot of international overseas investors interested, I think that there's, there's a beachhead market, which is the Diaspora and the people in the country. And I imagine that as a function of the work that we've done with that set of with that initial market, they will be able to,
to convince more overseas investors to participate.
But if I have a dispute, for example,
what is the rule of law like there? I mean, I understand maybe these are naive questions, but they're the questions of a foreigner.
Yeah. So I mean, in the event of a dispute, the governing laws is in Nigeria or whatever country that the property is domiciled in, right? And there's a legal process that can be followed.
How do I make sure that you're getting me the best price when I buy a property through you, especially because you're incentivized to get 3% of the price. So in some ways you're incentivized to add me pay the most
world's incentivized to sell the property, right. And so it's also in our interest to make sure the price is low enough that people are interested in the yield, right? So
you buy it first, before I buy it as an investor?
No, we don't buy it. So we show you the prices as well as the rental yield. So you know, we are
I'm just wondering if there's a tension between the success of Nigeria as a country and the success of the product. And what I mean is, does Nigeria eventually reach a critical mass of growth, where the legal institutions have matured, the consumer mortgage institutions have matured and effectively it becomes such an advanced economy that people don't need security. fiber, they'll just do mortgage investing in the way they do it the United States or other countries.
So we definitely imagine that happening. But instead of fiber being an alternative or secure by fiber being alternative, we imagine that we will be one of the engines driving that process. Right? And so
we have we will have the ability to kind of have the customer from the beginning and be the entity that creates that change
or is it the plans to transition is the need transitions you guys have the customer but you recognize the need to transition the exactly
have you looked at any other markets beyond Nigeria that you want to move into?
Oh certainly so so there are other major cities on the continent that we will that we will kind of launch this and we imagine this other emerging economies across the world that that
and what is the launch look like with it take to launch a new city
Um, so I mean, we we imagine that it takes we would need to partner with in in country companies and in country teams of people who are doing similar things.
Blue, the distribution that we have globally
will be able to kind of scale up quickly stepping back a little.
I mean, this was mentioned earlier, but there's an overarching kind of education gap here on what this even is, right? And if you're going out to individuals, and then showing them this platform and trying to drive adoption, that's the crux of the matter. So how are you thinking about it? You know, are there analogies to things that people are more familiar with? Or, you know, how are you even going to market with with that in mind.
So, right now, a lot of Nigerians living abroad actually purchase real estate, but they're doing it through maybe a second cousin or someone they met somewhere. So what we're actually offering them as a simpler way to do this. In addition to that, though, we want to, you know, provide macroeconomic data about every country that we're in, as well as sort of more granular data about neighborhoods, what yields mean how applications look, etc. So there'll be a you know, very solid education process as well. But it's a people who are already doing this just on sophisticated with
final question. Alright, one more round of applause for fiber.
We have one final startup presented today at this session, at least that startup is pot base presenting for pot based or Lisa Wong and Amit Tishler
Personality sells. Over 130,000 people attend Comic Con every year, this started off as a 300 person event to buy and sell comic books morphed into this worldwide phenomenon, because from Comic Con to Disneyland. We just love engaging with characters. We know it's not real, but as long as we're having fun. We'll play along and will pay for it at $2.8 million is generated by Comic Con attendees every year, and the Disney Parks generate 10.7 billion
Let's face it, it's a fan based economy. Now, consumers expect brands to be personalized emotional, and an immediately engaging in exchange for attention span. But digital characters have fallen a little short, right? The way that they feel right now is that you feel like you know them, they don't really know you until now. Introducing pop base pop base is a content management platform that allows creators and brands to deploy character as a digital asset that acid can engage through games and game a fight experiences. And those experiences can be monetized through in app ads in app purchases on the pop based app now, Kim Kardashian she turned herself into a digital asset she made millions on her game but this is really too expensive for most brands requires an upfront development costs as well as ongoing maintenance fees. So let me show you how easily pop based takes care of all of that for a brand and I'm going to use a YouTuber as an
Example. Move to demo, please.
So this is Larry Bundy Jr. Now Larry is a YouTuber that has over 330, 5000
devoted fans on YouTube. He's like Kim Kardashian and that he is a personality driven brand. What that means is that his content has to feel like it's authentically his right? It has to be about his persona. Unlike Kim Kardashian. He does not have a team of people to create the content for him. And it's kind of all Larry. So by using pop base. Let me show you how easily Larry can manage his fans by keeping them updated on his latest news
anchor Larry both being shut down into some amazing exciting Ladies and gentlemen,
of course, they can watch his latest videos on that TV. And very importantly, they can play monetize mobile games
we get to add to Larry's bottom line, which is very important to us and Larry, so Larry has actually queued up a quiz for us.
We have it here on the dashboard. Let's just save that make that go live
the advantage of a digital character is that the digital character. Oh, there it is. It's updated. So let's go ahead and play that game.
Which are the following is not okay.
So I had to make this joke because you'd never get to do this in your whole life. You're making the world a better place add up, Pulte. I knew the answer. Okay. So virtual, Larry can engage
24 seven. Always building that one on one relationship. And also do things like give a shout out to one of your cohorts at TechCrunch. So
back to slides, please.
we build proprietary tools so that content creators can focus on managing the content. But of course we're not just sticking with trivia, we're going to add additional game temp templates as well so they can extend
their portfolio and their reach. We filed a patent for this workflow. We also filed a patent for the character as a dynamic data formats. So if you imagine like Google AdWords puppeteering a character, that's what we're doing. Now. Game Maker and roadblocks. They do allow people to make code lists games, but it is quite labor intensive. And it is not about brand management, match made and game influencer are more about matching up celebrity influencers with development studios.
pop based is about letting anyone make a game that has a responsiveness and immediacy of social media. So we're going to focus by starting off with YouTubers that have a fan base between 10 K and 1 million. This translates to be about 3.12 million consumers for potential ad revenue of 19 million a year we're going to do a closed beta with five selective influencers that have a combined audience of about 1 million. We have a 6040 rev share split in their favor as well as a recommended incentive and of course, we are integrating an avatar building system and working with influential agency so we can scale rapidly
as we expand pop based, we move it to the cloud. We integrate AI and analytics so that our creators can focus on creating new dynamic experiences and really not have to worry about their technology tool chain.
My team has over 60 plus years of industry experience combined in the gaming space we have shipped products for Lucas Arts Sony, Activision, the short version is we really do know how to do this. We know our stuff. So whether you're a teacher making pop quizzes, or you are a YouTuber, or you're a traditional brand or your company and you want to make a fun training game for your employees come and play create make a little cash on part base.
simple question, I guess.
And it's related to the answer that you gave to that quiz. How does this actually make the world a better place?
I just had to make the joke. It does matter. And I like I probably will never get to do this my life.
No, but I meant that as a serious
okay. serious question. Okay. So my background is as I started off as an artist, right? And so I am very creative centric. And one of the things I realized and this is like, no offense to it, I love engineers, but they tend to think that code is like the only real work right sorry, but you do so engineers and artists, everything you love is made by crater everything everything you were you love that and but all artists have been brought up to that you're so lucky to be working god you're so lucky like like, and you're like, but you love what I do.
So YouTubers are the same thing. You're watching YouTube, not because you go like hey, I really love pressing the buttons on my website. It's because you love that guy, right? You love what they're telling you and they're Really getting squeezed. And I want them to be able to have additional revenue so they can continue doing what they love, because that's what they told us.
how are you thinking about showing the first batches of creators? What can be done, right? And like, are you guys actually going to launch the first several apps or cells and, you know, kind of get them out into the world, or oftentimes in something that can do so many things it can get, you know, it can be really overwhelming. So how are you thinking about, you know, kind of getting people into the platform?
Well, pop based is a single platform and all the traditional on it, right? So we are hoping that they sort of discover each other. So Larry has his own base, but he's in the neighborhood, right? And then there's other creators in those neighborhoods. So if you're a consumer, you say, Hey, I really love our first go to market is going to be trivia games, right? Let them off the trivia game. So if you go I'm a trivia game player. I love pop culture and I suck at sports. I'm identifying this right now.
So I only want to play sports related trivia. I look that up and I go, okay. Larry is doing pop culture. So is this other girl? Morris girl? I'm going to just play those trivia games. Hopefully they can help each other out. Does that answer your question?
The trivia game piece does, yes. So that's where you're starting?
Yeah, we're starting with that.
What's the longer term vision here? You know, we've had startups in this particular segment of the competition, who, you know, are shipping 40% of the grain to a particular country, or who are trying to elevate the real estate market of another country. Yeah, what do you ultimately want to be?
I want to be the infrastructure so makes it feel like when you meet a character that you know, is imaginary. You don't care you're going to play along, you're going to have that magic trick the same way that when you go to Disneyland, and you go like okay, maybe doesn't bling, but it's still so awesome, right? And we kind of knew that you had to enable storytellers to sort of feed into the system because they're so good at building character.
And technology just isn't like I kind of joke that there's a thing of technology where they tend to report a story instead of still tell a story, right?
So that's what we're building.
Speaking of that,
becoming a full person, and knowing how they behave, how long does it take you guys? And how much does it cost to create one of those characters that can really feel and look at, like, the personality I might see on YouTube.
So one of the things that we found when we're doing this is that and this is what I also like, so Larry is obviously this is he's a real person, right? That's his voice that says content. And but you know, he's a digital character, his This is his logo. One of the things we found was so great is his personality and his content was so identifiable that
that's kind of the magic trick of when you're even playing games, right? You kind of go like, Hey, this is good enough and then you're just gonna play along and then we expect of course, because this always happens, right? It gets Faster than fidelity gets better and it will look more and more like whatever the brand wants it to look like.
But we actually got he he has fans right and when we were on the floor someone tweeted and thought we had like rip them off because oh my god they're using layer but in junior and then there was a positive oh wait no that that is Larry one day Jr.
But it is your model somewhat like an agency I'm hiring you to create this character or are you generating it at scale
we're generating at scale. So we have we're integrating an avatar building system so they can actually just it's like Sims right? They can just kind of build that themselves they get the brand experiences themselves and then just use gaming gain additional gaming templates to just play with their fans.
So it sounds like you want this to be kind of an open platform anyone can kind of utilize your tools but this is really work for everyone like you. You have to have the brand of a Larry or a Kim Kardashian for this type of tool to really work or do you feel like you can bring in any type of character and their brand will be reflected here.
So we obviously started from the entertainment space. And we were thinking very much like, oh, people have personally write grants. One of the things that has been so interesting for us, as we've been showing, this is a lot of education. A lot of people saying, Hey, I'm a teacher, I want to create something. I think my students would play with this, a cartoon version of me somehow is more compelling. Okay, so.
So yeah, I think that the extension of this is very much like a trivia template is a game it's a pop quiz. It's a training. It's a training experience that allows you to sort of close the loop and give reinforcement,
Sam feel like the creative elements are built in that versus someone having to bring the creative Yeah, okay. Yeah.
So in your competitive slide, you mentioned that there were other companies that allow folks to without a ton of engineering knowledge to build games on the platform. And obviously, you know, as you claim you have additional features, why do the additional features make what you're doing more desirable than the other open Game Development platforms.
So we are very much focused about people who
who want to sort of focus on managing their brand and using sort of gamification to do so. Right. The power of what the experience is, is really going to be about their voice and their personality. The other the other tools, they're really cool and I love them. But that's because I make games and they really do favor people who say, Hey, I'm someone who's a game designer, and I just don't want to learn how to code.
All right, give it up for pop base.
Alright, that wraps up this session of the startup battlefield. Judges are going to follow me offstage. We're gonna go backstage and liberate choose and finalists before they do though. Give it up one more time for our awesome judges.