Substrate AI is preparing for its IPO on BME Growth, the market for small growth companies. The current market situation, with volatility soaring in the wake of the Russian invasion of Ukraine, however, has postponed a host of IPOs across Europe. Lorenzo SerratosaSubstrate AI's CEO, Substrate AI, says he is not worried about the timing of the IPO - although it is expected in 2022 - and, for the time being, he has just signed the a collaboration agreement with the former MAB to boost the growth of Artificial Intelligence companies in Spain.
What led Substrate AI to choose BME again to go public instead of EuroNext, as announced a few months ago?
In 2021, due to the impact of the Omicron variant on the markets, we decided that we should postpone our IPO to avoid unnecessary risks. Later, market events, especially the war with Ukraine and the performance of technology companies on the stock market, proved us right. It was better to wait. In the meantime, we were talking to BME about the success of other companies in our sector in the market and the opportunity that the BME Growth market represents for artificial intelligence companies that need financing to grow. This led to the possibility of participating in the creation of an artificial intelligence ecosystem that will help emerging companies in this sector to find the path for their development. As a result of these conversations, the decision was also made to join us as a partners We are also looking forward to being listed on the BME Growth, a market that we hope will become the benchmark for Artificial Intelligence companies in Europe. We are going to work on it together with the Pre-Market environment contributing everything we can.
A priori you were thinking of going public at the end of last year (that was the initial plan), but taking into account the current circumstances and volatility, when do you plan to take this step?
We are not overly concerned about timing. We are working on this with the BME Growth team and our advisors, who are also keeping a close eye on market developments, to jointly weigh up the best time for all of us. In the meantime, we remain focused on creating value for shareholders and clients. In Spain, we are developing the projects we have in hand in the renewable energies, energy and energy efficiency sectors. agritech [focused on technology for agriculture] or industry. In France, where our fintech projects have been very well received, and where we continue to work with All Invest and others partners. In the United States, together with New York University, we are investing in R&D projects related to our Bio-inspired AI technology. We are focused above all on creating value in what we do.
What is the approximate valuation you are aiming for in your debut on the stock exchange? It must be taken into account that from its origins, with ZonaValue, to the present, the company has made a 360-degree turnaround.
The valuation is not yet on the table and, therefore, we cannot venture anything. What I can say is that the company's objective is to grow sales to around 7 million euros with organic and inorganic growth and that we are focused on achieving this objective in 2022. In 2021 we closed with a turnover of 2 million and a growth of 100%, but the work done during the past year will be really reflected in this 2022.
Do they fear a slowdown in AI investment as a result of higher inflation or a possible slowdown in the economy?
Not at all, quite the opposite, in fact. You have to understand that AI is precisely a key to greater efficiency in everything we do. To give an example, factories that combine predictive maintenance solutions such as those sold by Substrate AI together with proper quality control can reduce their costs by 30% and that is a great competitive advantage. The same is true in other industries. Dairy farms that use the data and the manager developed by Substrate increase their profitability over 30% thanks also to the creation of new efficiencies. This is why, far from stopping investment, we believe that we are in the perfect environment for it to accelerate, because it is when problems arise that you most look for solutions.