10% of Platforms Command 88% of the Market: See Who’s Leading

CHART OF THE WEEK 📈

By Léa Bouhelier-Gautreau | Read

Reg CF and Reg A+ deals are primarily available through FINRA-regulated platforms, which operate as two-sided marketplaces. These platforms face a "chicken and egg" dilemma: they can attract significant investment if they feature high-quality startup deals, but they can only secure the best deals if they have a large investor base. To gauge the success of these platforms, we analyzed the total investments made through each ECF platform for deals launched in January 2023 or later.

• The market follows the Pareto principle: 10% of platforms capture 88% of the investments, while 58 platforms split the remaining 12% among themselves.

• As consolidation looms—likely through mergers aimed at reducing costs and achieving economies of scale—leading platforms like Wefunder, StartEngine, and Dealmaker Securities command the largest share of the market. However, this is far from a "winner-takes-all" scenario. ECF platforms are still innovating and differentiating themselves to attract unique deals and investors. Nevertheless, to achieve profitability, platforms will eventually need to either expand their revenue streams or consolidate.

• Compared to last year’s data, StartEngine and Dealmaker have made significant strides in gaining market share, while Dalmore and Republic have seen a decline in their traction.

• Surprisingly, while we were expecting more ECF platforms to shut down, the market share of platforms outside the Top 7 grew from 5% to 12% year-over-year.

INVESTMENT ROUNDTABLE

By Sam Fiske / Watch

In this week’s episode of the Investment Roundtable, Brian, Léa, and Teddy discuss two significant topics shaping the equity crowdfunding space. First, the team analyzes the implications of Honeycomb Credit’s acquisition of Raise Green, a platform focused on climate-related investments. Then, they dive into an exclusive analysis of equity investment distribution across major crowdfunding platforms like StartEngine, WeFunder, Republic, and DealMaker.

PITCH REVIEW 💸

By Teddy Lyons \ Deal Report

Brief: Cube Click has developed a groundbreaking AI platform that revolutionizes dental x-ray analysis. With one in five dental X-rays going misdiagnosed and traditional X-ray technology remaining stagnant, Cube Click's AI solution addresses the limitations of human interpretation. The platform analyzes dental X-rays with higher accuracy than dentists, detecting cavities, root canals, and gum disease at the pixel level in seconds. By providing colorized X-rays that instantly highlight dental issues, Cube Click empowers the early detection of cavities and gum disease, preventing more extensive surgeries. Trained on 27,000 x-rays with guidance from leading dental professionals, the AI's patented, cloud-based system can be learned by dentists within 10 minutes of training. While awaiting FDA approval, Cube Click's innovative technology is poised to transform dental diagnostics.

Key People: Cube Click is led by Dr. Richard Ricci who has run his own dental practice for over 30 years in New York City. He received his D.D.S. in Dentistry from New York University and B.A. from Brooklyn College in Biology. He holds a fellowship at the Academy of General Dentistry. 

He is joined by Dr. Andrea Cambria (CFO) also co-owns the dentistry with Dr. Ricci has been a dentist for over 30 years as well. She also holds her D.D.S from NYU and BA in Biology from Brooklyn College. 

The founders are closely advised by a team of consultants from Innolotics, a Texas-based firm specializing in helping medical device software achieve FDA clearance.

Summary

Here's what we like: Specialized artificial intelligence is poised to dominate most major industries today. Practitioners not utilizing the latest AI/ML software will likely fall behind in providing the best care for patients. Cube Click targets an industry still stuck in the 1900s using the same X-ray technology that has barely been improved in over a century of dentistry. By utilizing AI trained on prior dental X-rays, Cube Click will provide unparalleled accuracy for dentists to diagnose cavities, root canals, and gum disease. Cube Click has been awarded six patents and has two more pending, protecting its AI-technology from competitors.

The company is well on its way to FDA clearance, having now submitted its 510(k) application to the FDA and projecting approval in mid-2025. While the company has several well-funded competitors, SmileDx outperforms them by leveraging cutting-edge nnU-Net technology and a more comprehensive dental X-ray dataset, resulting in superior sensitivity and specificity for dental pathology detection.

Here's what we don't: There are several large competitors in this space, including Overjet AI, Pearl, and Videa Health. These competitors have FDA-approved products and have raised large amounts of funding. While competing with well-funded competitors will always be difficult, Cube Click differentiates itself by using cutting-edge technology and focusing on accessibility for all dentists, from solo practitioners to DSOs. Another risk, as is the case with any medical technology company requiring FDA clearance, there is always a chance that Cube Click incurs significant costs from delays in its approval process. This is, unfortunately, quite common for companies requiring FDA approval and is a risk that Cube Click will need to manage as they move through that process. Finally, the company is currently burning $150K per month, indicating the requirement of additional capital infusions into the company in order to continue operating.

LAST WEEK’S POLL RESULTS

Would you invest in LemonRocks?

🟨🟨🟨🟨🟨⬜️ 👍 (12)

 🟩🟩🟩🟩🟩🟩 👎 (14)

26 Votes

INSIDE STARTUP INVESTING

In this episode, we dive deep into the world of Pivotal Health with its CEO, Sal Braico. Pivotal Health is revolutionizing the urgent care industry by bringing high-quality medical services directly to patients' homes. With 13,000+ visits and rave reviews, Pivotal Health addresses the inefficiencies of traditional healthcare by eliminating the need for waiting rooms and reducing administrative burdens. Sal discusses the strategic shift towards providing services through employer partnerships, enhancing accessibility while maintaining affordability through a subscription-based model. 

STAFF PICKS 🌶️

BitterBrains

BitterBrains operates in the education and coaching industry, offering a platform that provides developers with credible certifications, accessible education, and community events. Serving over two million developers worldwide, including professionals from companies like Google, Apple, and Microsoft, the platform helps individuals and organizations upskill with structured learning paths and certifications.

• Valuation Cap: $13.6 million

• Minimum Investment: $150

Consulta Immigration

Consulta Immigration integrates advanced AI technology to simplify and modernize the immigration process, offering accessible and affordable services through flat-rate pricing. The platform caters to individuals and organizations, including businesses, educational institutions, and law firms, addressing the high costs, inefficiencies, and complexity of traditional immigration services.

• Valuation Cap: $10 million

• Minimum Investment: $2,000

FlyFin

FlyFin leverages AI and CPA expertise to revolutionize the tax industry by delivering accurate tax filings up to 20 times faster and at a fraction of the cost. Serving over 270,000 users with a 95% customer satisfaction rate, the platform simplifies and accelerates tax preparation.

• Valuation Cap: $42 million

• Minimum Investment: $250

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