This Cykel is simply seeking to apply AI to real world business solutions
“…here is a home grown company bringing exactly the kind of expertise in cutting edge software development the LSE Main Market has been looking for…”
The runaway excitement about the possibilities of AI that has pulsed through markets since the debut of ChatGPT has continued to drive big tech to sky-high valuations: chipmaker Nvidia briefly became the biggest company in the world earlier this month.
Cykel AI, which joined the LSE Main Market last week, is one of a new wave of companies seeking to apply AI to real world business solutions that promise to transform our everyday interactions with technology.
‘An automation layer for the internet’
Cykel, formerly listed on the Aquis Stock Exchange (AQSE), joined the LSE through the reverse takeover of special acquisition vehicle Mustang Energy (LON:MUST) in a deal worth £19.22m, giving private investors a rare opportunity to participate in the early phase growth of a new AI venture. Today, the company successfully raised gross proceeds of £350,000 at a premium to the current share price. The Placing arises from market demand for the Ordinary Shares following completion of the Company’s reverse takeover and re-listing on the London Stock Exchange.
Cykel joined AQSE last October with plans to rollout a suite of AI-driven software products through a ‘software as a service’ (SaaS) model. Co-founded by executive chair Jonathan Bixby, who has also played leading roles in the growth of tech small caps including NFT Investments, Argo Blockchain, Guild Esports and Cellular Goods, the company is seeking to take advantage of the possibilities offered by increasingly sophisticated Natural Language Processing (NLP) text generators – famously exemplified by OpenAI’s ChatGPT – for a new wave of AI-powered business applications.
Speaking to StockBox last week, Mr Bixby said Cykel’s IPO offered investors the chance to invest in a stage of the business cycle usually dominated by venture capital. ‘We are in I think the largest growth market in technology I’ve ever seen,’ said Mr Bixby. ‘I’ve been through Web 1.0, 2.0, and 3.0 I’ve never seen anything like AI … every company we talk to has an AI task force, is AI curious, and is investing – I’ve never been in an opportunity where literally every company is saying “if I don’t do this I’m going to get left out.”’
Cykel aims to bring AI to everyday business task management, offering users an intuitive platform for streamlining workflows, intelligent project prioritisation and cross-platform integration. The company’s first product, an AI-powered task operating system accessed on desktops through a Google Chrome extension, executes common workflows – ‘within five to 20 seconds’ – that would otherwise have to be completed by hand.
Conceived as ‘an automation layer for the internet’, Cykel integrates with thousands of third-party apps, including Google Workspace, Salesforce, and LinkedIn. By entering parameters into the system’s interface users can create and modify documents automatically, generate reports, and perform complex web searches. A wide range of marketing tasks can be automated: Cykel can create new product listings on ecommerce platforms, send marketing emails to segment lists, update customer records with new feedback, generate leads by sending outreach emails based on recipient’s LinkedIn profile and message parameters, and even suggest the social media influencers best able to promote products. The system can also add invoices to accounting software, calculate and file taxes, and process receipts. Cykel says the product ‘stands poised to revolutionise organisational efficiency, automating repetitive tasks and furnishing invaluable data-driven insights for strategic decision-making.’ When fully integrated into a company’s workflows the software can reduce repetitive work by 30 to 50pc, possibly saving each employee some eight hours routine work per week.
Mr Bixby said: ‘We’re trying to build an interface to allow a knowledge worker to get as much leverage out of their job as possible by creating an autonomous computing experience … It’s that exact same ‘voila’ moment that you got when you first use an iPhone and I first got into a Tesla … we’re building an autonomous computer that leverages everything a knowledge worker needs to do for the future’.
Cykel is currently available on a ‘freemium’ basis, with SaaS fees charged once usage reaches a certain level. An aggressive marketing strategy will be pursued through 2024, focused on the B2B software market in the UK, Europe and North America. Mr Bixby said: ‘We are going to market through people that are already selling into these organisations and have relationships with their CFOs and CTOs’. The product will be refined and extended in response to feedback from customers and project partners. The company is currently revenue generating, and will update the market quarterly on metrics including number of user tasks and revenue.
Turning AI speculation into solutions
Cykel is seeking to take advantage of the new wave of AI generative models signalled by the debut of ChatGPT in late 2022. The subsequent boom in demand for chips capable of training and running next generation AI has driven huge gains for semiconductor firms, indices tracked by semiconductor ETFs rising more than 20pc through the the year to April. Earlier this month Nvidia, which has single-handedly driven about a third of the 14pc year-to-date increase in the benchmark S&P 500 index, briefly surpassed Microsoft and Apple as the most valuable publicly listed company in the world, touching a market capitalisation of $3.34tn.
But there are signs the rally will only be sustained if companies across the wider economy demonstrate how the new technology will actually produce the exponential gains in productivity so much commentary has forecast. The big cloud computer providers such as Amazon, Microsoft , Alphabet and Oracle are only spending so many billions on GPUs in the expectation that software companies will use them. Recent declines for dozens of stocks that had soared to sky high valuations suggest that investors are now looking past the hype and examining earning stories. More than half the stocks in the ‘AI Winners Basket’ maintained by investment bank Citi, have fallen back. While semiconductor stocks boomed, software benchmarks rose by just 5pc in the year to April.
Research by another bank, Jefferies, indicates that companies are still uncertain about how to integrate AI into their processes. More than a third of businesses analysed said they were still exploring what AI meant to them, with 57pc citing concerns over ‘unproven return-on-investment’ as a deterrence to making a commitment to fully integrate the technology into their processes.
Here, it seems, is the opportunity for providers such as Cykel offering ready-made solutions for channeling disparate data such as emails, customer calls and videos into automated workflows. The company is a first-mover in a rapidly developing field:global IT spending is expected to rise 8pc in 2024 as the big software companies roll out business automation solutions. This year Microsoft has expanded the availability of its AI-enhanced version of Office 365, Sage has introduced its Sage Copilot digital assistant, Google has unveiled its AI assistant Astra, OpenAI has focused on making its model more consumer-friendly, and, perhaps most significantly, Apple has just announced its own AI personal assistant. The Californian giant’s proven ability to drive the mass adoption of emerging technologies may prove a watershed moment for the industry, as with the tablet and smartwatch.
Outlook
Cykel AI’s story will be well worth following over the next few months as the company seeks to take advantage of its earlier mover position in the generative AI business solutions market. The failure of UK markets to attract tech talent has been exhaustively documented over the past few years: here is a home grown company bringing exactly the kind of expertise in cutting edge software development the LSE Main Market has been looking for.
Prospective investors should take time to listen to Mr Bixby’s StockBox interview for further information about the company’s expertise and ambitions. At the time of writing share price was 5.5p and its market was around £25m.
