Zedge Raises $7.7 Million to Power Its New Artificial Intelligence Expansion

2026-09-30 companies

New York, Wednesday, 30 September 2026.
Zedge completed a $7.7 million funding round led by Vice Chairman Howard Jonas to accelerate DataSeeds.AI, its new enterprise business delivering rights-cleared data for artificial intelligence development.

Structure and Scope of the Private Placement

On September 30, 2026, Zedge, Inc. (NYSE AMERICAN: ZDGE) announced the official completion of a private placement transaction that generated $7.675 million in aggregate gross proceeds [1]. The transaction, which was finalized on September 25, 2026, involved the issuance of 2,616,447 shares of Class B common stock alongside warrants to purchase an additional 2,354,803 shares of Class B common stock [1][2][3]. This capital injection is designed to reinforce the mobile entertainment platform’s balance sheet as it expands its digital footprint [1].

Howard Jonas Leads the Investment Round

The funding round was heavily anchored by Zedge’s Vice Chairman, Director, and 10% owner, Howard S. Jonas [1][2][3]. Investing through Chartwell Holding, LLC, Jonas committed $6.5 million of the total capital, acquiring 2,218,430 Class B common shares at a purchase price of $2.93 per share [1][3][5]. Chartwell’s contribution represents approximately 84.691% of the aggregate gross proceeds raised during this round [1]. The private placement also saw participation from Zedge board member Elliott Gibber and an unnamed stockholder [1].

Warrant Terms and Insider Holdings

As part of the transaction, Chartwell Holding, LLC received 1,996,587 warrants, representing 90% coverage of its purchased shares, with an exercise price set at $3.22 per share [3][5][6]. While warrants issued to Chartwell and Gibber carry the $3.22 strike price, the remaining participant’s warrants are priced at $3.28 per share [1]. These warrants are scheduled to become exercisable on the later of March 25, 2027, or upon obtaining requisite stockholder approval under NYSE American regulations, and they will expire five years after that initial exercise date [2][3][5]. Beyond this transaction, Jonas maintains additional indirect beneficial ownership of Zedge Class B shares, holding 60,495 shares through the Debbie Y. Jonas 2018 Dynasty Trust and 65,880 shares via The Jonas Foundation [3][5][6].

Strategic Pivot to B2B AI Data

The timing of this insider-led round aligns with Zedge trading around $2.95 per share, a level that market analyses suggest is undervalued relative to its fair value, especially given the company’s robust 93% gross profit margins and a balance sheet that carries more cash than debt [2]. Zedge intends to deploy the newly raised capital to accelerate the development of DataSeeds.AI, its emerging B2B artificial intelligence data business [1]. By leveraging its proprietary creator communities, which serve roughly 20 million monthly active users across platforms like the Zedge Marketplace and GuruShots, the company aims to scale its capacity for providing high-quality, rights-cleared data to AI developers [1].

Sources

Digital Media Private Placement