The extravagant price is the primary driver of this raise’s deal rating. GenesisAI is raising through common equity at a pre-money valuation of $49,026,348. This valuation is nearly four times more than the company’s pre-money valuation from its previous raise — which only ended in March 2021. There hasn’t been any notable progress from the company since the last raise that would justify this massive increase. Therefore, GenesisAI scores extremely poorly in the price metric.

AI is one of those markets that is expected to absolutely skyrocket as more and more companies see the benefits of AI adoption. The global market was valued at $39.9 billion in 2019 and is predicted to see a CAGR of 42.2% from 2020 to 2027, so within a decade we could be looking at a market worth trillions. As GenesisAI will be engaging in asset management, its total addressable share of that market will be considerably smaller. Think of it as a marketplace for members of the market to offer their services, like Amazon or Craigslist. GenesisAI would be collecting what are essentially hosting fees around 30%. However, even with this smaller niche, the company is still targeting a vast and growing market. The market score for GenesisAI is its highest across all five metrics as a result.

While the team boasts impressive credentials even for a tech startup, there are some warning flags investors should know. CEO and co-founder Archil Cheishvili holds a Bachelor of Arts in Economics from prestigious Harvard University. After spending a short time working with investment management firm Bridgewater Associates, he dedicated his time to a restaurant he co-founded in the country of Georgia. Before moving on from that project, he founded Palatine Analytics, a tech startup focused on streamlining HR and management roles for companies, which he still runs. In 2018, he joined the International Development Fund for Economy and Culture — a small venture capital firm based in Germany — as vice president of artificial intelligence. He left the firm at the start of 2020, and it seems like the firm might have closed at this point, as its website has been taken down. Cheishvili started GenesisAI in late 2018 and has been running it simultaneously with his roles at Palatine and IDFEC. In fact, he maintains his role as CEO of Palatine, which splits his commitment.

David Fan is a co-founder and, like Cheishvili, was at Harvard from 2012 to 2016 while he earned his Bachelor of Arts in Applied Mathematics in Computer Science and Economics. He participated in various engineering and tech internship roles while at Harvard before joining Google as a software engineer in 2016. He worked with Google for three and a half years, apparently focused on developing ads for YouTube. After leaving Google in early 2020, he joined Prelay as a software engineer. Prelay is a startup focused on deal management for companies. Just as Cheishvili remains committed to Palatine, Fan remains committed to Prelay. The extent of his involvement with GenesisAI is unspecified.

Mena Gadalla also works with GenesisAI, though his involvement is likewise unspecified. Like his fellows, he is a Harvard graduate with a Master of Science in Computational Science and a Doctor of Philosophy in Physics and Applied Physics. Apart from a brief internship at Lam Research, he has published scientific papers and raised money in research grants but doesn’t have much in the way of corporate work experience.

Having three graduates from a prestigious school like Harvard is a plus for any startup. However, a lack of total commitment to the product as development is becoming essential is somewhat concerning, and the founders’ all being from the same school indicates they could have limited networks for business development purposes. Thus, GenesisAI’s team score is middle of the road.

Differentiation is another weak spot for GenesisAI. While the product is potentially game-changing, the company faces stiff competition from global behemoths Google and Amazon, both of which are working on their own AI marketplaces. Both tech giants provide AI services to consumers already, and Amazon in particular has extensive experience with hosting tech marketplaces. Put up against these giants with no patents held and little to distinguish its product from other potential offerings, GenesisAI faces a steep uphill climb to market dominance — or even market participation on a reasonable level. The company’s differentiators score is middling in reflection of these factors.

As the product is still in development, GenesisAI has nothing in the way of revenue to speak of. At the moment it also has little in the way of assets. Still, the company has accrued no debt, perhaps due to its impressive fundraising capabilities from a previous raise (around $1 million dollars last year). GenesisAI also garnered interest from 20 potential clients on the supply- and demand-side. While this interest is not the same as signing deals, it is as close as the company can get before providing an actual product. Bringing these data points together, GenesisAI’s performance score is mediocre.

As with any company with an innovative and untested idea, risks are high here. The product is still in the beta phase, which means there is no way to verify its potential and useability, and a lack of commitment from most of the team is worrying. The biggest concern here is whether GenesisAI can overcome competition from much larger and better-funded competitors and establish itself as a dominant market player, which seems very much in doubt. Finally, given the product’s early stage of development, it is likely to be several years before investors see a return, if they ever do.

There’s a lot of cause for caution with GenesisAI. In addition to an uncommitted team with limited work experience, there is little progress to show, and certainly nothing to justify the valuation’s skyrocket to four times its previous level. Investors should be leery of startups promising major results and showing little in the way of progress on the journey. This is especially true given that there is no proven product-market fit for an AI marketplace. Unless GenesisAI does reach its stratospheric projections, investors are unlikely to see significant returns on their money. As of now, there is little evidence that indicates GenesisAI will achieve its lofty goals.

As artificial intelligence drives prosperity around the globe, a service that can open these services to easy monetization and cooperative learning truly could be a game-changer. If GenesisAI can deliver on its promises and carve out a substantial niche for itself, it could grow to be a large company with impressive revenue. However, it’s important to note that the company would need to surpass well-established and name-brand competitors in order to achieve such success.

GenesisAI is creating a global network to buy and sell artificial intelligence technologies, allowing a tech that historically operates in a closed system access to the worldwide market. It also is developing its own machine learning protocol.

While its potential is high, Genesis faces stiff competition from tech giants seeking to build AI marketplaces as well. The company’s executives are not fully committed, never a good sign for potential investors. After a recent successful raise (that ended only a month ago) but little else in measurable progress, the valuation has shot to stratospheric heights. While the potential for a planet-spanning network for AI services has indisputable appeal to those excited for the advancement of AI, there are viability concerns that cast doubt on whether GenesisAI can corner a market that, as yet, doesn’t exist. For all of these reasons, GenesisAI has been rated an Underweight Deal.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com.

Analysis written by Benjamin Potts.