Zedge unveils AI data strategy with $7.7M insider investment

Zedge Inc. filed an investor presentation on October 2026 outlining a strategic pivot to scale DataSeeds into a core B2B AI data business, supported by an approximately $7.7 million insider-led investment. The company, listed on the NYSE American under the ticker ZDGE, stated that DataSeeds is now its primary growth initiative, leveraging existing consumer businesses to generate cash and provide operating infrastructure.

The presentation disclosed that Zedge reported approximately 1.3 million active subscriptions in Q3 FY26, a 41% increase. Monthly active users stood at approximately 20 million during the same period. Based on a stock price as of October 16, 2026, the company calculated a pro-forma enterprise value of $15.7 million. Pro-forma cash totaled $27.4 million, comprising $19.7 million in reported Q3 FY26 cash plus the $7.7 million capital raise, with zero debt. Zedge noted a free cash flow yield of approximately 20%, derived from trailing twelve-month free cash flow of $3.1 million divided by the pro-forma enterprise value.

The company cited Grand View Research data indicating a 22.6% compound annual growth rate for the global AI training dataset market through 2033, reaching $16.3 billion. Zedge identified three demand drivers: purpose-built physical AI data, expert human evaluation for model assessments, and nuanced quality control requiring professional judgment. DataSeeds offers multimodal datasets, including images, audio, and video built to customer specifications, as well as expert evaluation services.

Commercial validation has begun, with the company reporting its first six-figure order and repeat customers from enterprise AI clients. Zedge stated it has launched commercial model-evaluation services and is scoping video annotation as a further expansion. The company is hiring marketing, sales, engineering, production, and operations talent to drive revenue, while noting that project timing and scope will make DataSeeds revenue lumpy over upcoming quarters.

Howard Jonas materially increased his investment in the company and is actively focused on driving DataSeeds' growth through talent, technology, infrastructure, and selective acquisitions. Of the $7.7 million financing, $6.5 million was associated with Howard Jonas's participation, with Board Member Elliot Gibber and another current stockholder also participating. Zedge announced that its quarterly dividend is expected to continue, while a share buyback was suspended.

Morris Berger serves as Chief Executive Officer, a position he has held since October 1, 2026. Previously CEO of Zeno Media for 15 years, Berger also served as CEO of Zedge from 2005 to 2009 and CEO of IDT Entertainment from 2001 to 2005. Jonathan Reich serves as President and Chief Operating Officer, roles he has held since October 1, 2026. Reich previously served as CEO from August 5, 2020, to September 30, 2026, and has been with the company since its spin-off in June 2016.