Deal Details
Startup: Vyrill
Security type: Convertible Note
Valuation (cap): $8 million
Minimum investment: $250
Where to invest: Wefunder
Deadline: April 23, 2021
There’s a big black hole in the internet’s video search capabilities. One small company is way ahead of anybody else in filling it. And in doing so, it can bring e-commerce to a whole new level of effectiveness and optionality.
That’s the startup I’m introducing you to today. This company is special. And it has to be. Usually, I choose from two or three promising startups when I write these picks for you. This time around, I had eight startups that I wanted to present to you. But this company — Vyrill — beat them all.
Google is great at searching through text for places, products and people — and any other topic you choose.
But you can’t use Google (or YouTube) to search through video for those same things. It doesn’t work. The capability just isn’t there right now. Which seems crazy when you think of how many great and informative videos there are on the internet.
Right now, these videos are all going into a black hole. Sure, you can search through the written descriptions of videos. But there’s no effective way to search through the videos themselves for what you want.
It reminds me of the bad old days when you had all this interesting stuff on “The Internet” — but with no way to search for it. I used to buy hard-copy books with titles like Free Stuff from the Internet that promised to help me find free content online. Google eventually plugged this gap and became a trillion dollar company.
But there’s only one Google, right?
I’ve seen the line “invest in the next Google” used so much, it’s lost all its meaning. But Vyrill has actually set itself up to be “the next Google.” It plans to be the dominant search engine for video. Lots of startups would love to be the “next Google.” But Vyrill has the technology RIGHT NOW to actually search through videos.
And Vyrill plans to follow in Google’s footsteps and become the dominant search engine for video — in much the same way that Google became the dominant search engine for text.
Thinking Big
That’s one heck of a goal. I usually dismiss such ambitious talk. But Vyrill is off to a rousing start. To even have a chance of pulling this off, Vyrill needs to do three things…
- Collect a critical mass of videos. Millions of videos are made and uploaded to the internet every day. The volume of video content is growing astronomically. Amazon has amassed 250 million videos. Nike has more than 20 million videos mentioning them just on YouTube (90% is user generated). L’Oreal has similar numbers.The growth opportunity is truly Google-like.
And Vyrill has millions of videos in its library. It’s indexing and analyzing more than 25,000 videos a day. And it’s speeding things up. It plans on downloading and analyzing 200,000-to-300,000 videos a day by the end of this year. And then doubling that number every six months. It’s well on its way to building the world’s biggest collection of videos for commerce — and it’s also building a huge moat. Think how difficult it will be for Vyrill’s competitors to catch up to those numbers.
- Develop a superior search engine. Google’s search is pretty good. I believe Vyrill’s is better. Its search engine offers companies eight dimensions by which to look up videos — including popularity of the influencers and videos, brand safety issues, positive and negative sentiment, topics, themes and demographics.
It does a lot of things that Google’s search engine doesn’t do, including generating sentiment scores. Companies can see which products (and which features of those products) are creating excitement and which are creating unfavorable comments. Companies can quickly find favorable product review videos or identify and react to negative and damaging content, including video fraud.
Companies can also get daily alerts about new videos on their product or in their product space. They can identify rising user and fashion trends very early — and see which demographics are driving them. They can track videos on their competitor’s products. They can discover previously hidden celebrities praising their products (this was how one company discovered a big fan in supermodel Heidi Klum).
It took Vyrill four years to develop this highly versatile technology. With all its resources, Google can’t do any of this. But I bet it wishes it could.
- Build a bridge between video and e-commerce. In the 1990s, of course, Google had a very different mission than today. It wanted to connect the internet to individuals. E-commerce wasn’t even a thing. The demand for a search engine back then was massively underestimated. It took many years for millions of companies to create websites on the internet. But it took a much shorter period for millions of videos to be posted on the internet.
Videos now play a vitally important role in retail — 85% of consumers say that videos helped them make a product decision.
The pandemic has only accelerated the trend. There’s been a 600% increase in video uploads during the pandemic. But the majority of the growth wasn’t from brand-generated videos. It was from user-generated videos. Since the start of COVID-19, the number of user-generated videos has grown 10 times faster than brand-generated videos. Authenticity makes a huge difference. Customers trust what other customers say.
What Vyrill has built is much more than an in-video search engine.
Vyrill’s search engine gives e-commerce-driven companies a way to manage and leverage this new phenomenon. It can match brands, products, categories, keywords and hashtags with the authentic videos made by influencers.
And there’s more. In a matter of minutes, companies can license content they like without ever leaving Vyrill’s platform. And it can do it at scale. It’s a win-win for both companies and influencers.
And Vyrill plans to expand this functionality by building tools to deliver licensed content directly to e-commerce sites and enable videos in a search box on shopping sites.
Vyrill certainly isn’t the only company that understands there’s a massive $7 billion opportunity here for the taking. But it’s the only company taking these critical steps right now. It has a significant head-start on its current and future competitors.
Vyrill has a handful of small, medium-sized and large companies (including one with revenues of more than $100 billion) paying to use its search engine. Another 50-plus companies are testing its video search technology for free. And Vyrill is signing up around two-to-five brands a week.
Vyrill is basically pre-revenue — but not for long. By the end of this year, it expects to average $1.5 million in revenue on an annual basis. And next year, revenues should be much bigger.
Google-like But Much Better
Vyrill’s investment opportunity is Google-like — but even better in one important respect. When Google had its initial public offering (IPO), its shares went for $85 each, giving it a total valuation of $23 billion. And the investors who got in that first day made out. For every dollar they invested, they pocketed more than $40.
There’s nothing wrong with a 40X return. But it’s not 100X or 1,000X startup investors expect. Then again, you and I wouldn’t have been able to invest in Google during its startup days. That right was reserved for institutional investors. But we can invest in Vyrill.
Vyrill’s valuation is capped at $8 million. You’re getting shares for pennies on the dollar because you’re investing while it’s still a startup.
It’s entirely possible that Vyrill may never reach Google’s level . But it doesn’t have to. The video e-commerce space is big enough for multiple companies to grow into very large enterprises. Vyrill doesn’t have to be the biggest. If it’s merely among the biggest, your returns would be unbelievable.
Right now it’s doing better than that. Vyrill is head of the pack. It’s in absolutely no danger of giving up its lead in the foreseeable future. It’s going to be hard for other companies to catch up.
And it’s led by two outstanding entrepreneurs. CEO and co-founder Ajay Bam has successfully launched multiple new products. Previously he built and sold a VC-backed mobile shopping app company. CTO and co-founder Dr. Barbara Rosario has a Ph.D in AI,machine learning and natural language processing from U.C. Berkeley and was a top research scientist at Intel Research.
All this should be music to investors’ ears. This outstanding opportunity has attracted investments from executives at Airbnb, Apple and Pinterest, among other companies. Turns out, investing in the next Google isn’t pure fantasy after all.
How to Invest
Vyrill is raising up to $1.07 million in this round of funding on Wefunder. You’ll need to sign up for an account there if you haven’t yet.
Once you’re signed in to Wefunder, head over to the Vyrill raise page. Now enter the amount you want to invest and click the green “Invest” button on the right-hand side of the screen. The minimum investment on this deal is $2500.
Risks
This opportunity, like all early-stage investments, is risky. Early-stage investments often fail. Vyrill might need to raise another round of funding in a year or two, if not sooner.
If it executes well, this shouldn’t be a problem. But that’s a risk worth considering when investing in early-stage companies. The investment you’re making is NOT liquid. Expect to hold your position for five to 10 years. An earlier exit is always possible but should not be expected.
All that said, I believe Vyrill offers an attractive risk-reward ratio.