teleCalm has set its valuation at $5.48 million on a pre-money basis. For the first $100,000 committed, this valuation is set slightly lower at $4.52 million. Keeping in mind how progressed the business is and the kind of revenue it is already generating, this low price certainly warrants teleCalm’s strong price score.

With 5.8 million Americans living with Alzheimer’s and dementia — and assuming management’s existing pricing for its service — we are looking at annual recurring revenue potential of $3.48 billion. In addition, one-time activation fees represent another $0.35 million. By 2050, these figures should rise to $9.59 billion and $0.96 million, respectively. Globally, the picture is even more attractive. Today, the same pricing would imply a market size of $29.97 billion annually. In addition, we would see up to $3 billion in activation fees. Though the upside for teleCalm could be substantial, the probability of capturing any sizable chunk of the market is slim. International expansion is complicated, and pricing will vary by region. In the US, the market is fairly small compared to the world as a whole. This is all reflective of teleCalm’s market score, which was its lowest across all five metrics. 

At this moment in time, there are three core members to the teleCalm team. The top of these is founder and CEO Tavis Schriefer. Previously, Schriefer founded IDEATIVE Product Ventures, where he was President and CEO. There, he focused on selling seven of his inventions under the consumer electronics category. Beyond just marketing a product, he gained valuable insight into intellectual property, new product design, prototyping, and more. Prior to that role, he worked as an eCommerce Strategist and eBusiness Architect at Nortel Networks. There, he delivered IT business solutions for the telecommunications firm. 

Another key individual at teleCalm is Carl Ott. He presently serves as the CTO of the business. In the past, he founded COTRO Services. That business served as a consulting firm for product conception, development and launching. Another role he had was as a Senior Consultant of Product Technology for Aperio Insights Market Research Co. There, he worked on assessing product-market fit for clients. 

The third person, meanwhile, is Jill Schriefer, teleCalm’s Chief Customer Officer. Her focus in the past was dedicated to Girl Scouts of Northeast Texas where she served as the organization’s Grants Manager. Before that, Schriefer worked as the Manager of Foundation and Partnerships for the SPCA of Texas. And prior to that, she was a Trade Show Coordinator for IDEATIVE Product Ventures. While there, she focused on budgeting and the management of presentations. Her focus on grants does not translate directly to what teleCalm is working on, but it has come in handy. In 2019, teleCalm received at least one grant worth $100,000. 

Overall, the team running teleCalm looks solid. Management has relevant experience and even the member with the least relevant experience was able to generate some value for the firm last year. The lack of medical experience or previous successful exits in the team is not ideal however. Altogether, teleCalm’s team score is middle-of-the-road — they have relevant experience, but there are gaps which could be challenging to overcome as the business grows.

What really separates teleCalm from established players like Call Blockers and Vonage are a few of its core features. Some competitors have scam protection, but none of them help to reduce repeat calls, late night calls, and 911 abuse. One example is RAZ Mobility, which provides large, picture-oriented dialing via cell phones. The Memory Phone is another one. teleCalm’s own service is so much more comprehensive, though, that we view it as having a leg up on the competition. Furthermore, its service is built off of three awarded patents. Even if other players were to try and copy it, the patents protecting teleCalm’s technology and the work needed to build out a similar system would be prohibitive for some businesses. Hence, teleCalm’s high differentiation score.

Since launching, teleCalm has done really well to expand itself. In 2018, the firm generated sales of just $32,066. This grew to $104,436 last year. So far this year, monthly recurring revenue is about $22,000, and management is targeting annual recurring revenue of $326,000 for 2020 as a whole. Along the way, the business has accumulated more than 500 subscribers and boasts over 1.5 million phone calls served. Like most early-stage entities, though, teleCalm is still generating losses. Its net loss in 2019 totaled $128,894, while its operating cash outflows were $137,997. Both of these are better, though, than the $287,062 net loss and $220,780 operating cash outflow seen a year earlier. This kind of growth — especially compared to 2019 — is impressive but it’s not meteoric. The promising growth of teleCalm’s revenue gives it a strong performance score.

At this point in time, there are not a lot of bearish items to consider. The net losses and cash outflows are obvious things to consider. The overall market for the business and its product is not the largest or fastest-growing. Even in the best-case scenario, this does limit teleCalm’s potential upside. The company would need to secure a very large market share to provide a solid return on investment.

While the bearish indicators are few, the bullish ones are many. Traction, for starters, is really great. Management has relevant experience in this space. The market opportunity is growing, and the company has plans to significantly increase sales with the launch of its own cell phone. Data also illustrates that — far from being a gimmicky item — teleCalm does have the usefulness it’s intended to. The price tag of $49.95 per month is not that high considering phone services on the market today. On top of all this, teleCalm’s valuation is far from high. 

Taking all of the data provided and putting it together, the KingsCrowd team has concluded that teleCalm is an interesting prospect. The firm’s valuation appears more than reasonable. Its early traction is encouraging, and its general take on what the market needs is logical. There are some weak points to consider, but these are few and far between. What’s more is the fact that the market for this kind of service is all but guaranteed to expand for as long as the population expands. All of this combined warrants teleCalm’s rating as a Deal to Watch.

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

Analysis written by Daniel Jones.