Investment IdeasMy Portfolio

H2O.ai

Leading open source machine learning platform

OTCmedium risk

Funding rounds for 2013-2019

Company income
$5 mln
$9 mln
$20 mln
$40mln
$72.5 mln
Current price
$27.50
Min Amount
$10
Earliest start
Any time
Fee
Enter 3.50%Leave 0.50%Success 20%

Invest in H2O.ai

Investment Idea Details
About the company

H2O.ai puts efforts in making artificial intelligence accessible to everyone. The company has launched a machine learning platform, which helps organizations to create AI for their target tasks – such as, for example, applications development and data analysis. That's an easier and a cheaper alternative to outsourcing third-party AI and data science specialists.

H2O.ai's advantage over conventional software vendors is that the company offers an open source platform. This provides a client with greater freedom and opportunities to customize the final product for their private needs. H2O.ai offers solutions across different industries: insurance, healthcare, telecommunications, marketing, financial services, retail and manufacturing.

The company was founded in 2012 in Silicon Valley. H2O.ai was proclaimed the global visionary by Gartner 2021 Magic Quadrant (list of top companies in its segment) for Data Science and Machine Learning platforms, as well as in the category of Cloud AI Developer Services.

Company is the trusted AI partner to more than 20,000 global organizations, millions of data scientists and over half of the Fortune 500. The company cooperates with almost all companies in the Gartner Magic Quadrant. For example, it works with Cisco, Intel, PwC, PayPal, AT&T, Citi, Procter & Gamble.

Market

The global machine learning market size stood at $11 billion in 2020 and is projected to reach $152 billion in 2028 with expected CAGR of 38.6% during the forecast period.

During the pandemic, companies faced many difficulties, including labor shortage and supply-chain disruptions. They are increasingly turning to AI technologies to improve their work efficiency. According to Algorithmia research in 2021, 50% of companies plan to increase their spending on machine learning and AI, 20% said their budgets are to be increased "significantly".

One of the main problems for businesses while implementing AI is the processing and preparation of data for training algorithms. Data scientists spend the bulk of their time cleaning and organizing data. That’s one of the reasons that managed and automated AI development platforms like H2O have gained ground in recent years. The global AutoML market generated $270 million in revenue in 2019.

The company's CEO Sri Ambati explained how H2O.ai clients use AI to save money. Due to audit automation, one of the top five audit companies managed to save $400 million. National chains, including Walmart and Walgreens, use H2O.ai to monitor changes in customer behavior due to the pandemic. H2O.ai helped bank customers to avoid many billion dollar penalties, providing protection from fraud. Investment funds use AI to predict stock prices.

Risks

High level of competition. There are many other of AI platforms offered by other companies. Competitors include both major companies such as Amazon SageMaker, Azure Cognitive Services and Google Cloud AutoML, as well as startups such as DataRobot, Abacus.ai.

Overestimation of the market. Machine learning platforms are a relatively young industry. There is a risk that analysts and venture investors overestimate its growth potential.

Asymmetric information. Management and current investors have access to more internal information about the company than other market participants. H2O.ai has not published its financial and operational reports in open sources. So it's impossible to estimate the company's revenue dynamics and the profitability trends.

Low liquidity – there is a possibility that early exit from this investment will take more than 1 month.

Similar companies and Valuation

In November 2021 H2O.ai closed a Series E investment round, which was led by H2O.ai strategic sponsor and client Commonwealth Bank of Australia (CBA). The company has raised $100 million to fuel its growth. As a result, H2O.ai was valued at $1.7 billion, which corresponds to a $28.63 price per share and it is 4 times more since the last valuation at $400 million in 2019. The previous round was also led by a strategic backer Goldman Sachs.

According to Crunchbase information, in November 2021 H2O.ai raised $100 million. Apart from its strategic partners, including NVIDIA and Wells Fargo, the company received investment from Barclays Investment Bank, Nexus Venture Partners and others.

How Venture Investments Work
1. Searching for Companies

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Publication
25 Sep
Minimum Amount
1 share
2. Buying shares

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Shares Outstanding
Limited
3. Public Offering

United Traders will have shares at its disposal after the IPO. The shares can be sold after the established 6-month Lock-up period. Alternatively, the shares can be hedged for the above period. Prior to the company going public United Traders look for exit options in the OTC market. If we find a great offer, we sell the shares.

Public Offering Date
Pending
Estimated Gains
+150%
4. Taking profit

After the Lock-up period is over, the investment in pre-IPO or OTC will be automatically closed, and generated profits are credited to your account less the applicable UT fees. We offer an opportunity for investors with over $100,000 invested in a specific idea to search for a counterpart in the OTC market individually and to take profits before the company goes public and thereby exiting the trade prior to the Lock-up period expiration.

Exit
̴ 2021
Early Exit

Although it is prohibited to sell shares within the Lock-Up period, our traders find ways to take profits for our investors using various financial instruments: forwards, options, short selling trades, etc.

For an investor the above means that the pre-IPO or OTC investment may be exited after paying a part of its value, usually around 15% which is caused by highly-priced instruments used to close the position. To do so, you should press the respective button in your members area as soon as it becomes active.

The exiting process is similar to making a new investment. You submit a request, we execute it within 1 business day, and your investment is closed at the current exchange price.

Fees

ENTRY FEE

3.5% of the share purchase amount. The fee is charged at confirmation of your investment bid.

EXIT FEE

0.5% of the share sell amount after the trade. The fee is charged at the investment exit.

SUCCESS FEE

20% of the profit gain. The fee is charged only if the trade is profitable at the time of exiting.

EARLY EXIT FEE

Usually a 15% fee is charged subject to the actual situation at the exchange. The fee is calculated individually for each investment.

What Are the Benefits of Investing with United Traders?

WE ARE A RELIABLE PARTNER

Our risk managers will support you throughout the entire transaction life.

HIGH PROFITABILITY

Venture investing is very risky as they involve new or growing companies, and multifold increase in capitalization is expected. We prioritize companies at the pre-IPO stage as they already demonstrate strong financial indicators and plan to go public soon. This approach allows limiting hyper-risks related to insolvency of new companies and substantially increasing profits as compared to investors who buy shares through a subscription just before the IPO.

LOW ENTRY THRESHOLD

To buy the OTC stocks, one would need millions of dollars. We gathered a pool of traders and investors allowing everyone interested to join similar transactions with as much as $10.

Risks

United Traders is experienced in minimizing risks but a future investor should be aware of all risk types:

  • Illiquidity. There is a possibility that early exit from this investment will take more than 1 month.
  • Asymmetric information. Management and current investors have access to more internal information about the company than other market participants.
  • Time uncertainty. There is no information regarding next financing round or exit strategy timeframe (IPO or M&A).
  • Share dilution. The issue of additional shares by a company may reduce the value of shares of existing investors.

Invest in H2O.ai