Veritone CFO: Company Finalized Wazee Digital, Performance Bridge Media Acquisitions

Veritone has completed its acquisitions of Wazee Digital and Performance Bridge Media (PBM), according to Veritone CFO Pete Collins. Both deals were closed by the end of August, on schedule, he said Sept. 6 at the DA Davidson Deep Dive: Vertical Tech. Day event in New York.

Veritone recently signed an agreement to buy Wazee for $15 million, including $7.5 million in cash and $7.5 million in Veritone common stock. Its Veritone One subsidiary, meanwhile, signed an agreement to buy Binghamton, N.Y.-based podcast agency PBM for $6 million, plus a contingent earn-out of up to $5 million based on PBM’s revenue for calendar year 2018, with such consideration being payable mainly in Veritone common stock, Veritone said Aug. 13. The PBM acquisition will expand Veritone’s market share to more than 25% of all U.S.-based podcast ad revenue, it said.

Veritone already started to integrate its business with Wazee, the Denver-based provider of cloud-native video management and licensing services that enable rights holders to monetize and enrich their content, according to Veritone CEO and founder Chad Steelberg.

“The Wazee acquisition especially gives us a very large foothold” in software-as-a-service (SaaS) revenue, Collins said Sept. 6.

Asked whether it was Veritone’s goal to acquire more companies with content that could be analyzed using its artificial intelligence (AI) tools or to get the tools themselves, he told attendees: “We’ve talked about really pursuing both.”

But he said: “We’re not really interested in acquiring cognitive engines because we think that it’s a very competitive marketplace and we really kind of want to be Switzerland to a certain degree. We don’t want to necessarily have a stake in which engine is performing best. We just want to be able to have the best engines available for our customers.”

However, he was quick to add that, “to the extent that there is technology that can extend the capability” of Veritone’s aiWARE AI platform, “we would be interested in that.”

With the cost of cognitive engines declining, there are more use cases available to Veritone today that are cost-effective, he noted, explaining that at $3.24 an hour four years ago to create a transcript, use cases were “more limited.” But, at only about 10 cents now, “there’s obviously a lot more” use cases, he said.

“The video side of the business hasn’t seen that type of price compression yet and a lot of the really cool, kind of cutting-edge opportunities are in that side of the business,” he told attendees. Analyzing, at scale, large quantities of surveillance footage was an example he gave for that, adding: “There’s still more kind of technical work that would need to be done to bring the cost down significantly.”

Of the three main verticals that Veritone is in today, public safety/government represents the “largest opportunity for us long-term, and that’s just because of the sheer size of audio and video content that’s available and needs to be analyzed in that marketplace,” he also said.

Media and entertainment is the vertical market that Veritone started with and is furthest along with in revenue generation, he noted. It’s further along in its third vertical — legal and compliance — than public safety/government, he said.

“Over time, we see a lot of opportunities” in the legal and compliance space, “especially as we move away from just litigation support and move into compliance,” he went on to tell the Liolios Gateway Conference in San Francisco Sept. 6.

He added: “What we can do in compliance is to be able to deliver additional levels of cognition: looking for sentiment analysis [and] looking for unusual language patterns to be able to help the risk monitoring functions within especially financial services institutions to be able to better monitor what’s happening in their organization and avoid investigations and litigation in the future.”

Although Veritone hasn’t generated much revenue from public safety/ government yet, he said: “We know there are large quantities of audio and video content that agencies ranging from local law enforcement to federal agencies are very interested in analyzing at scale. And so, we’re pursuing those opportunities, both through our direct sales force as well as through system integrators.” He expects that the company will be able to move from unpaid proof of concepts into paid proof of concepts in the U.S. and U.K. and then start seeing revenue from that vertical by 2019, he told the conference.