Frequency Machine

A travel app for podcast guides and personal advice from local experts

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Why I love Frequency Machine (aka Cerca)

Security Type
Crowd SAFE
Categories
Technology
Min Investment
$100
Location
BEVERLY HILLS, CA
Offering Date
February 10, 2022
Expected Close Date
October 12, 2022
Target Raise
$25.00K-$1.07M
No. Investors
59
Security Price
$1
Number of Employees
2
Cash
$458,516
Revenue
$55,401
Short Term Debt
$145
Cost of Goods
$84,600
Long Term Debt
$116,787
Net Income
$-203,066

Company Description

  • The 'Cerca' app by Frequency machine will guide travelers using professional tourism connections in cities around the globe
  • The free version includes podcasts that discuss notable locations and attractions as well as local spots
  • The subscription version, available for $3.99/month, allows the user to connect with local guides and opportunities around the city

Key Deal Facts

Venture capital funded, led by Backstage Capital
Introducing the Cerca travel app from Frequency Machine
Travel podcasts & on-demand connection to local experts
Cerca lets you plan the perfect trip & get your questions answered
Founded by TV/film execs & creators who scaled the Detour travel app
Creators of podcasts sold to TV with partners Warner Bros & 20th Century
Other partners: Vox Media, Audible, Headspace, Samira Wiley, Jodie Foster

Use of Proceeds

  • $750k: Operations and app development
  • $250k: Podcast production
  • $460k: Design and ancillary content

Recommendations

Low Risk, High Upside

Valuation Cap: 20,000,000

Discount Rate: 15%

Frequency Machine has a proven business model and fulfills a real need in the industry. Cerca has 4.9 stars on the app store and operates in a fast-growing, up-and-coming industry. The executive team has tons of relevant experience, and the company already has tens of thousands of dollars in revenue and hundreds of thousands in cash reserves. The company predicts having 2% of US international travelers (1.86 million) sign up for their $3.99 subscription service, which I think is realistic and shows their growth potential in the coming years. They even have ideal exit strategies in mind. 

Amount Raised : $33,220
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Valuation

Security Description

An equity crowdfunding specific version of a SAFE used by crowdfunding portal Republic. Upon conversion (if and when that happens), investors may receive special shares with limited rights that do not show up on a company’s cap table. The issuer may roll over and not convert shares at the next financing round causing investors to lose out on some upside.

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