As generative AI technology continues to reshape the tech landscape, Australian startup Leonardo is making waves with its unique approach to creating images and 3D model textures.
Leonardo is part of the wave of generative AI services that have gained prominence in recent months, joining the likes of OpenAI's ChatGPT, DALL-E, and more. Its ability to generate images and 3D model textures from brief prompts has caught the attention of local and international investors.
Australia's largest VC fund, Blackbird Ventures, has invested approximately 20% of Leonardo's capital across multiple funding rounds. Some industry insiders have drawn parallels between Leonardo and Canva, marking it as a startup with immense potential.
Another local VC firm, Side Stage Ventures, is closely tied to Leonardo, and its success is crucial for the firm's pitch to prospective investors. Gaining exposure to Leonardo is a pivotal part of Side Stage Ventures' efforts to raise funds in a challenging market.
Leonardo's challenge lies in retaining users. Internal statistics reveal a significant drop-off rate, with most users leaving within a few months of signing up. This drop-off affects the company's claims of having solid annual recurring revenue.
While Leonardo's annualized revenue was reported at $US5 million in August, its actual revenue to date is significantly smaller, at $US1.6 million. The distinction between Leonardo and more traditional software as a service firms raises questions about its recurring revenue potential.
Generative AI tools often exhibit biases seen in the images they are trained on. Leonardo's approach to addressing bias in its images remains a subject of inquiry.
Leonardo's journey in the generative AI sector reflects the broader landscape of rapid innovation and investment in AI startups. As it grapples with user retention and revenue challenges, the company's ability to carve a niche in the competitive AI landscape will be closely watched. The allure of its unique approach and the support of investors like Blackbird Ventures position it as a compelling contender in the generative AI race.
The evolving landscape of generative AI continues to shape the future of technology and innovation. Leonardo's journey offers a glimpse into the dynamic interplay between startups, investors, and user engagement in this transformative field.