The British AI startup you’ve never heard of is now worth $2.1 billion

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

💰 From obscurity to $2.1 billion
🤖 Watch out for Brad Pitt and Elon Musk
⭐ Starfish’s Got Talent

If that’s enough to get the billions flowing, read on…

AI Collision 💥

I woke up this morning, and saw an email in my inbox from the “Freetrade Team” titled, Freetrade agrees to be acquired by IG Group.

Freetrade, the self-directed investment platform, today announces that it has agreed to be acquired by London-listed IG Group. The deal will see Freetrade continue to operate as a commercially standalone business, under its distinctive brand. The deal values Freetrade at £160 million.

There’s good news to this, and not so good news. The good news is that Freetrade is a UK startup, that built a business from scratch and ended up selling to another (much larger) UK business at around £1.19 per share.

The not so good news is that 18 months ago, Freetrade was doing a funding round at £2.60 per share. And in 2021, they did a round at £9.25 a share!

Oof.

The thing about Freetrade is their funding was all done through the Crowdcube crowdfunding platform. Which means a lot of smaller investors. And you can be your bottom dollar a big chunk of investors came in at £9.25 and have now been wiped out. This of course is one of the risks of this type of investing. You have no liquidity in unlisted stocks until the management sells up, or the stock lists and goes public.

But there was hope Freetrade would become a darling of the UK startup scene. And arguably they have (for early investors) but also, it feels like a fall from grace considering the near £1 billion valuations around 2021.

Is this kind of story indicative of the UK start up and investment scene? Anecdotal evidence suggest that maybe it is, that when it comes to building blockbuster companies, most of the good stuff heads over to the US where there’s more capital and a faster more direct route to market.

The assumption is the UK is good at research, and science and development, but when it comes crunch time for commercialisation, it’s the final hurdle that never seems to get over the line. And when it comes to AI, again, the assumption is that all the good stuff is over in the US.

While the data might suggest that’s the case for now as we highlighted on Tuesday I think that gap can close in the next few years. I don’t believe it will be the government that achieves it though, they’re quite utterly useless. It will simply be ambitious, smart innovators that have the tools and resources to build success, and then continue that forward, right in the UK.

And the proof of that possibility lies with a British generative AI start up you’ve probably never heard of, but has just raised a ton of cash at a $2.1 billion valuation.

Synthesia, is a text-to-video AI generation platform that helps companies generate AI avatars and then implement them into their company. These avatars are used for things like sales and marketing and staff training.

One of the big backer to bring the valuation up to $2.1 billion is the $66 billion tech giant, Atlassian Corporation (NASDAQ:TEAM). Atlassian itself was a company only founded in 2002 by Mike Cannon-Brooks and Scott Farquhar in Sydney bootstrapped with $10,000 that grew into a massive, multi-billion software platform.

Looks like they think Synthesia could follow the same trajectory (they’re already well on the way).

Time will tell, and no doubt if the rollout of AI continues as we expect, that companies like Synthesia will end up on the stock market, like Atlassian did in 2016. For what it’s worth, Atlassian in the years since is up around 1,100%. Can Synthesia follow in their footsteps? Will we see a hugely successful British born and bred AI companies in a mega IPO this year or next? It’s highly possible, and a reminder that the US does have a lot of the best AI companies in the world but don’t fully discount the home grown British talent either.

#AD

Find out why events on January 20^th could send crypto prices surging higher…

And why one of the UK’s leading crypto investors is backing three overlooked stocks…

Forecasts are not a reliable indicator of future results. Capital at risk.

AI gone wild 🤪

The scammers are out there folks. And they’re using AI to a degree that makes it harder than ever to tell what’s real and what’s not.

I want you to remember, even after reading this, that scammers will prey on the most vulnerable, and that most of the time all you need to do to stay safe is just employ some common sense.

I see this a lot with my crypto work, and thankfully I have unbelievably smart readers who write in to me to ask if certain things are scams. The good thing is that if you’re writing in to ask if something is a scam, you’ve probably figured it out already, but that extra confirmation (which I’m always happy to give) gets you across the line. So I will add here, if it’s AI or if it’s crypto related, or even stock market related, if you think something is a bit dodgy, or aren’t sure, or suspect it but want another set of eyes, please email us, write in, ask away. I’ll always have time to help people avoid getting scammed.

Now, onto this latest scam and it’s wild.

A lady in France sent €830,000 to scammers under the belief she was dating and in a relationship with Brad Pitt.

Ordinarily that would seem a bit of a stretch, for anyone. Except these scammers utilised AI generation software to send her images and videos of “Brad Pitt” to convince her of the lie.

You can see how convincing these were:

Eventually she figured it out, after quite an elaborate and long winded scam. She even divorced her husband during the scam of which her divorce settlement was the bulk of the cash sent to scammers.

AI scamming is going to become more prevalent. And it will focus on more traditional “love scams” like this and impersonation of people.

Take this other one I recently came across that was a video of Elon Musk saying he supported a crypto (that of course was a scam)

This is a little easier to see it’s not Elon (I think?) but expect to see this a lot more in your feeds and in your inbox.

Be careful out there, and remember you can write in and ask me anytime about something that might seem a little fishy and I’ll be happy to take a look and help out where I can. Just reach me at feedback@southbankresearch.com

Boomers & Busters 💰

AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).

Boom 📈

• BigBear.ai (NYSE:BBAI) up 25%
• Symbotic (NASDAQ:SYM) up 20%
• Amesite (NASDAQ:AMST) up 18%

Bust 📉

• iRobot (NASDAQ:IRBT) down 22%
• Team Internet Group (LSE:TIG) down 11%
• Gorilla Technology (NASDAQ:GRRR) down 11%

From the hive mind 🧠

• It’s clear that healthcare systems around the world are not perfect. Not healthcare system can be everything for everyone at all times with the expectation of perfection. It would be great, but it just doesn’t work like that. But, what if it could? What if through the use of new technologies, like AI, healthcare, GPS, surgeons, the entire system can reach perfection?
• I’ve noticed this a lot recently, that I’ll go to read a sport story, and then after the first paragraph think, hang on a sec, I’m pretty sure no one actually wrote this. Have you felt the same? Is sports journalism going down the toilet?
• Goes to show that Apple isn’t always a leading innovator. Google had these same problems last year, and now Apple is pulling its AI because it decided to make up fake headlines.

Artificial Polltelligence 🗳️

It’s Friday and on Monday Trump is going to be inaugurated. There’s a lot of built up anticipation as to what that’s going to mean for the markets good, bad and otherwise…

But what do you think?

Weirdest AI image (or video) of the day

Note: trying something new here today (hopefully our email and hosting systems allow for it) But I’m seeing more and more AI generated video content that is strange, weird and makes me laugh. I came across the one below and decided this section isn’t just weirdest AI image anymore, but weirdest AI image or video. Enjoy the craziness!

My talent show performance went wild! – r/weirddalle

ChatGPT’s random quote of the day

Thanks for reading, and don’t forget to leave comments and questions below,

Sam Volkering

Editor-in-Chief

AI Collision