DOOH Network Focused On Screens Inside Rideshare Cars Goes Under
October 25, 2022 by Dave Haynes
A digital out of home ad network start-up based on tablets in view of passengers in the rear of ride-share cars, paired with AI-based analytics, has had a messy demise.
The DOOH network ALFI has ceased operations and filed for Chapter 7 bankruptcy, four years after founding and about 17 months after going public on the Nasdaq. Shares were down 82% in 2022 when the lights went off. The company was delisted two weeks ago.
The Miami Beach company had positioned its offer as deploying an “exclusive network of AI-powered screens at the back of Uber & Lyft rideshares, (bringing) unprecedented targeting precision to digital out-of-home. We use computer vision technology to match audiences with relevant advertising in real-time and in a privacy-compliant process.”
Around the time the company went public, it said it planned to have some 20,000 rideshare cars deployed with its ad platform, starting in Miami. The company this spring announced plans for Seattle and San Diego.
There are many stories over the past 25 years or so of companies seeing the rear of headrests in all kinds of cars – taxis, limos and rideshares – are terrific captive media platforms, but very few success stories. Advertising is hard, and it is particularly so when the network operator needs to incur the cost of the infrastructure (those tablet screens and related tech) and connectivity.
The company was unfamiliar to me, but I wrote about it after a partnership announcement with a CMS firm had me doing a “Who’s that?” Here’s a bit of that:
A little Googling got me quickly to press releases from law firms rounding up participants for a class action lawsuit that has been filed on behalf of investors who purchased or otherwise acquired shares in Alfi in its IPO last year. The lawsuit (stating the obvious here that a lawsuit involves allegations, not findings) complains that executives now on leave “made materially false and misleading statements regarding the Company’s business, operations, and prospects.”
On or about May 4, 2021, Alfi conducted its IPO, selling approximately 3.7 million shares of common stock and 3.7 million warrants at $4.15 per both share and warrant.
On October 28, 2021, Alfi revealed that its Board of Directors had placed the Company’s President and Chief Executive Officer, its Chief Financial Officer and Treasurer, and its Chief Technology Officer “on administrative leave [pending] an independent internal investigation regarding certain corporate transactions and other matters.” It also stated that on October 28, 2021, Alfi terminated the CTO’s employment.
On this news, Alfi’s stock price fell $1.18, or 22%, to close at $4.42 per share on October 29, 2021, thereby injuring investors.
On November 1, 2021, Alfi disclosed that the Chair of its Audit Committee resigned. The Company also stated that its internal investigation was into “the Company’s purchase of a condominium for a purchase price of approximately $1.1 million” and the “Company’s commitment to sponsor a sports tournament in the amount of $640,000,” both of which “were undertaken by the Company’s management without sufficient and appropriate consultation with or approval by the Board.”
The SEC had also started investigating the company … and so on.
Very messy, but maybe not all that shocking. The build-it-and-they-will-come business model (with entrepreneurs putting screens in some defined location – like a taxi or bar or health club – and the making the money back through ad revenues) has failed far more often than it has worked, and the Alfi folks were touting computer vision in an ad industry that already had numerous computer vision options.
The many dreamers that have called me over the years looking for consulting help on their planned DOOH networks have almost uniformly been advised, for free, that they instead find a business with predictable recurring revenues, and little or no upfront capital investments. Advertising tends to look easy to people who don’t know the business. Then they find out …