Sonnant x Community VC DD

Community VC Due Diligence

We carefully select pitch decks from companies that approach us, choosing the most promising ones for our community DD. Our analysis covers a company's product, business model, and potential for future growth. This is done with input from experts, founders, and our community. We aim to provide a detailed understanding of each investment opportunity, laying a solid groundwork for members to go on and conduct their own due diligence.?

At the end of this process, we compile our findings into a detailed memo, which is accompanied by our due diligence cheat sheet. This cheat sheet provides detailed metrics and analysis, serving as a primary resource for key information on the business model, funding history, and past performance.?

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Sonnant ???

If you'd like to invest in Sonnant, please follow this link

About Sonnant

Sonnant uses AI & ML to transform audio into data for the digital era. The Sonnant platform transforms broadcast, podcast, radio and streaming audio into data. This data is delivered into industry-wide cases to power monetisation and delivery workflow automation at every stage of the audio publishing lifecycle.?

In laymans - Sonnant uses data to give publishers and advertisers the opportunity to provide more accurate, timely and contextualised advertisements within their broadcasts. For instance, instead of showing a Ferrari advertisement at the start of a Joe Rogan podcast whose audience is mostly 25-30 year old males that can’t afford Ferraris and skip the start of the podcast anyway. A publisher could wait until the 15 minute mark where the most intense part of the podcast is and add a Toyota Sahara advertisement (in which Joe owns).

Moving into the future this will become even more personalised where two of us listening to the same podcast could hear different advertisements depending on who we are, how we interact and what we normally listen to.

Highlights

• Sonnant has experienced a remarkable growth rate of 90% in 2023.
• Customers include major broadcasting and podcasting companies including SCA, Nine, Nova, Salem Media Group, top podcast hosting platform Libsyn and top podcast Good Life Project.
• Combined radio and podcasting market is worth over $160b (2023) with podcast CAGR of 27.6%. US podcast advertising revenues expected to exceed $4b by 2024 with revenue outpacing the total internet ad revenue market (72% vs 35% year-on-year)
• The average ACV for Sonnant $15k and just for radio stations alone there are over 43,000. That is $6.5bn ARR in opportunity in ? of their market potential at the starting ACV without expansion.
• Aiming for $2m in ARR by 2025 (a 6-8x increase from today), with plans to increase to $10m shortly after.

Founder insights

• Background: Tony Simmons, originally a corporate lawyer specialising in M&A and IP, transitioned out of law to establish a data telecommunications company, achieving a listing on the ASX.
• Product: Employs AI, ML, and natural language processing to convert spoken word content into valuable data for advertising and industry transformation.
• UVP: Sonnant aims to unify various systems, providing customers with structured data to fully understand their content's lifecycle.
• Markets: Focuses on expanding in the US, UK, and Australian markets where Sonnant already has large Logos.
• Funding: Seeking over 1.5M USD to grow US market presence, focusing on staffing and product development.
• Financial: Aiming to hit 2m in ARR, which may significantly boost valuation and attract Series A funding in the US, with a strategy to cater to both content creators and advertisers.

Community insights

• Experts recognise Sonnant's pivotal role in ad tech, comparing its potential to the successes in display and video.
• Sonnant's innovative approach is transformative for the audio industry. The ability to deliver highly contextual advertising is a standout feature.?
• The integration of AI and ML technologies is a significant competitive advantage.
• The platform’s optimisation of workflows using data is a key strength.
• Focusing on creators, Sonnant enables them with data-driven insights, highlighting its user growth potential beyond the key market segments and into individual content creators.
• The ability to diversify content and revenue streams is a major factor enhancing Sonnant's investment appeal.

Things you'd want to do before considering investment:?

• Product trial: Experience the functionalities and features of Sonnant's offerings firsthand.
• Understand the IP and workflow: Gain an understanding of the venture’s intellectual property, and how their processes flow and integrate.
• Further financial DD: Conduct further analysis of Sonnant's financial projections to better understand its current position and growth potential.

Gain expert insights and join our network of angel investors. Register as a CVC member now for exclusive access to our community-led DD!

Due Diligence Memo

Deal Information: Explore a snapshot of Sonnant, including insights into their business model, product, and details regarding their crowdfunding campaign in our Hype Reel Video.

Go-No-Go Information: We've distilled the most critical data into our Go-No-Go section, providing a clear understanding of Sonnant's potential, growth strategy, and market fit - Pitch Deck Review.

Founder Interview: We conducted an interview with Sonnat’s Founder, Tony Simmons. In this interview, he touches on his experience as a founder and dives further into the company’s vision and strategy - Founder Interview.

Community Insights: We engaged our community, including AdTech & Media experts as well as experienced angel investors. They shared their perspectives on Sonnant's market standing and future growth prospects - Community Session.

Closing summary

After speaking with Tony to fill in our understanding gaps and then engaging with Ben Johnston and Chris Johnson directly over this opportunity - we didn’t feel the need to engage with anyone further to build conviction around Sonnant.

Sonnant has all of the makings of a Venture-backable business with high ACV’s, high gross margins, a fast-growing market, a second-time successful founder, sticky customers and a clear positioning as the infrastructure for the spoken word industry.

Beyond our due diligence we suggest that the key things you are looking for as an investor beyond this capital raise and pre-series A are:

1. Sonnant to achieve the milestones it has stated.?
2. A deep and proven understanding of Sonnant’s sales velocity to prove its future growth.
3. An understanding of their future as an infrastructure play with some proven API integrations.

Key links:

• If you'd like to invest in Sonnant, please follow this link
• Sonnant DD Cheat sheet
• Sonnant Investor Deck

Thank you to those who contributed to this DD!

• Chris Johnson: Head of LiSTNR product and strategy at Southern Cross Austereo aka SCA.
• Ben Johnston: Josephmark Venture Studio and Flower Ventures ESVCLP Founder, with 3 major exits in the media space.
• Cam Yuill:? Multi founder with an exit in Adtech through Silicon Valley - Early investor in companies such as Spotify.
• Steve Allan: M&A and Investment specialist and CEO of Parent Company JV with Jay-Z/Roc Nation.?

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Jock ??