Investing in Ediphi
The following excerpt is from Allied’s original deal memo to investors. To review investment opportunities in full, please consider joining the syndicate at Allied.vc/join
Since Covid-19, the global hospitality industry has struggled with severe labor shortages and high turnover rates––79% of hotels have labor shortages, with an average turnover rate of 300%. Meanwhile, a typical hotel with 500 rooms employs roughly 600 employees at a cost of $1,500 to hire and onboard each new worker.
In response, there has been a surge in demand among hospitality brands for more effective, customizable, and engaging training programs that will attract and retain talent.
Enter Ediphi
Ediphi is a pioneering virtual reality (VR) training platform that is transforming the way the global hospitality industry onboards, upskills, and retains its workforce.
Headquartered in Austin, Texas, Ediphi has assembled a seasoned team of technology and hospitality veterans from industry leaders such as Westin, Hyatt, Shangri-La, and IHG.
At the core of Ediphi's offering is a comprehensive suite of AI and VR-based training modules that address the specific needs of the hospitality sector. From front-desk operations and guest services to culinary skills and event management, Ediphi's highly immersive testing & simulations enable trainees to hone their abilities in a risk-free and authentic environment.
Additionally, Ediphi’s unique approach has been shown to accelerate the development of essential skills, help reduce costly on-the-job mistakes, and improve employee readiness. As a result, Ediphi's customers describe the many benefits of reduced labor shortages and turnover while supporting the entire employee lifecycle, from onboarding and upskilling to reskilling and career advancement.
By transforming how the hospitality sector trains its workforce, we believe Ediphi is poised to disrupt the $290B global hospitality training industry and become the go-to partner for organizations seeking to maintain a competitive edge through a highly skilled and adaptable workforce.
Why we are thrilled to support the team at Ediphi
1) Proven Team with Deep Domain Expertise
Ediphi's founding team brings unparalleled expertise to the company's mission of transforming hospitality training.
Co-Founders Cristina Carl (CEO) and Vanessa Jopillo (COO) each have over 20 years of operational experience in the hospitality industry, having held management roles at leading international brands like Westin, Hyatt, Shangri-La, and IHG.
Complementing their industry knowledge, Co-Founder and CTO Rene Repija is a seasoned game developer with extensive expertise in immersive technologies. At the same time, Chief Content Creator Richard Enright leverages over 20 years of 3D modeling experience to develop Ediphi's compelling AI and VR training modules.
In our opinion, this exceptional team's blend of hospitality and technological acumen positions Ediphi as a disruptive force in the $290B hospitality training market.
2) Large and Expanding Global Market Opportunity on the Tailwinds of Covid-19
The hospitality industry's pressing need for skilled workers has ignited a surge in demand for innovative training solutions. Hotels and resorts now spend $240B annually on employee training and development programs (growing at 6.7% CAGR), while hospitality students spend $50B annually on vocational training (growing at 9.1% CAGR).
Per our investment thesis, we love companies that provide innovative solutions within large and rapidly expanding global markets.
3) Strong Early Traction with a Unique Wedge into the Market
Ediphi’s impressive traction and growth trajectory speak to the success of its innovative approach. The company is entirely bootstrapped and profitable, having grown by 211% YoY and achieving seven-figure revenues in 2023.
Furthermore, we like Ediphi’s quality of revenues. Its VR training modules are deployed across a diverse customer base of large-scale enterprise clients, including dozens of hotel brands, universities, and tens of thousands of hospitality students worldwide.
As such, the company has already booked seven figures in Q1 revenue and is on pace for [metrics redacted for privacy] revenue in 2024, with a projected net profit margin of [metrics redacted for privacy].
Additionally, by leveraging the team’s prior network and expertise in the hospitality industry, Ediphi has successfully implemented a land-and-expand strategy into some of the top global luxury hotel brands, including JW Marriott, MGM, St.Regis, Westin, Hyatt, Aman, Ritz-Carlton, and others.
As a result, we believe Ediphi has achieved early signs of product-market fit while benefiting from shorter sales cycles, zero churn, and an incredibly sticky product that customers love.
In Summary,
We love talented teams building infrastructure-layer software at the nexus of large and rapidly expanding markets.
Based on Ediphi’s impressive traction and growth, diverse customer base, and deep industry expertise, we believe in the potential for an outsized venture-scale return.
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