The Appen Ltd (ASX: APX) share price is in the red in early trade.
Appen shares closed flat on Friday at $7.09 per share and are currently trading for $6.91, down 2.5%.
Below we look at the ASX 200 tech share’s investment announcement that looks to be spurring investor interest.
What investment was announced?
The Appen share price is sliding after the company reported its minority investment of 2 million pounds (AU$3.6 million) in Mindtech Global Limited. In line with its investment, Appen has formed a commercial partnership agreement with Mindtech.
Mindtech, the creator of Chameleon, specialises in developing training data for AI computer vision models.
Commenting on the investment, Appen’s CEO, Mark Brayan said:
Mindtech has created a scalable platform for the generation of large-volumes of synthetic training data. The partnership between Appen and Mindtech will provide customers with the ability to curate a combination of real-world and synthetic data across a wide variety of use cases.
The allocation of capital to a new and disruptive product-led business enables Appen to bring new solutions to our customers and evolve with market trends.
If you’re unfamiliar with synthetic data, Appen explains it’s an “emerging component of the training data market that is used to augment real-world data. It is particularly useful for the creation of edge-case data that is difficult to capture”.
The company reports that the synthetic data market segment is forecast to grow to $1.15 billion by 2027. That’s a compound annual growth rate of 48%.
As part of the investment agreement, Brayan will join the Mindtech Board.
The Appen share price may have failed to get a lift today after the company said it did not expect a material revenue impact from the partnership in 2022, “given the early stage of the synthetic data market”.
Appen share price snapshot
It’s been a difficult run for the Appen share price since hitting all time highs of $40.08 on 21 August 2020.
And 2022 has been little exception.
The Appen share price is down 39% since the opening bell on 4 January. By comparison, the S&P/ASX 200 Index (ASX: XJO) is down 6.4% in that same period.
The post Appen (ASX:APX) share price fails to lift off on strategic investment appeared first on The Motley Fool Australia.
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More reading
- These were the worst performing ASX 200 shares in February
- Leading brokers name 3 ASX shares to buy today
- Embattled Appen (ASX:APX) share price bounces despite a top broker downgrade
- Top brokers name 3 ASX shares to sell next week
- These were the worst performing ASX 200 shares last week
The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Appen Ltd. The Motley Fool Australia owns and has recommended Appen Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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