Why we invested in Accelex?
Perspective, by Jay Wilson
Every quarter we embark on a portfolio valuation exercise which entails haranguing the CFOs of over 50 portfolio companies for the latest trading information, gathering myriad external data sources by way of external valuation comparables, then setting about to extract the relevant company financial information and applying the often opaque valuation benchmarks to arrive at a portfolio company valuation.
Each investment professional is responsible for 5-10 portfolio companies and this process takes c. 1 week…..every quarter!
In some senses we have it easy, with less than 100 investments this process is just about manageable (bearable) if not highly labour intensive and open to manual processing error. For Limited Partners (LPs), the investors that provide the capital for most venture capital and private equity funds this process is orders of magnitude more difficult. Each LP might have 100-1000 investments into funds which themselves might have 20-100 investments. As one can imagine the problem of extracting, collating, analysing and benchmarking private company investment data for these stakeholders becomes exponentially more difficult, more costly and lacks traceability and insight.
Zooming out, assets-under-management (AUM) in private markets have nearly tripled in the last 10 years – alternatives now account for c.15% of total AUM – one might ask if alternatives are niche anymore. Industry participants and regulators are demanding more transparency, visibility and auditability of investment activity in private capital markets. However, these markets are underserved by technology with reporting and analysis workflows largely involving manual processing of unstructured data (pdf, excel, word documents). Preqin highlights c. 50% of private capital fund managers still manage their portfolios in Excel. As the industry has expanded these workflows are no longer fit for purpose.
Accelex unleashes the power of private market investment data. Accelex solves the unstructured data problem for the alternative asset industry using proprietary data extraction algorithms. This enables the automation of data collection, reporting and the application of data analysis. The longer-term vision is to become the standard for private market industry benchmarks having established itself as the single source of truth for performance data.
We originally met Accelex to discuss the potential use cases as a customer, as described above, our processes need a technology injection, but it quickly become clear there was a compelling investment opportunity in Accelex. It is rare that we as investment professionals are also one of the principal user groups for the company’s solution and as such are able to deeply empathise with the pain point. This naturally gives you a head start when thinking through the investment potential, but when we met the team, we were sold. Franck Vialaron, CEO and Michael Aldridge, CRO two of the co-founders have decades of experience in B2B technology, fintech and data businesses. And to top it off they sold their last business, a financial services benchmarking business to Boston Consulting Group. A core team that has experienced success in the domain they want to take their new venture is always a good start. Nicole Weder, the third co-founder, comes from the front lines of private markets. As Chief Product Officer she brings incredible product depth to the leadership team. For a seed stage investment, the founding team is already well set up for success.
Our investment in the company enables the business to double down on its amazing early success and acknowledges the experience and execution capabilities of the co-founders and their ambitious vision to redefine how private market data is created, analysed, and benchmarked. The company will continue to scale internationally further developing its footprint in Europe and North America.
Overall, Accelex is well aligned with our sweet spot of B2B software in a sector we know well. As such we are hugely excited to be co-leading this, the company’s first institutional fundraising round. We are delighted to welcome the Accelex team to our portfolio and very much look forward to working with them and our co-investors Illuminate Financial Management, Expon Capital and SixThirty Ventures to build the next phase of growth for the company.
We are excited to find the next generation start-ups in DataTech so if you are leading the way in this or an adjacent segment we would love to hear from you.
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