As borderless as we have become, there is still a lack of reliable information when it comes to emerging markets. REDD Intelligence serves emerging market investors that seek reliable market intelligence and real-time news by relying on a technology-driven approach combined with a seasoned team of journalists and analysts. REDD covers over 1,400 Emerging Markets companies focusing on shareholder/creditor activism, financial distress, equity and debt issuance, potential M&A opportunities, and more. REDD has a 90% renewal rate among its clients and plans to launch coverage of Central & Eastern Europe, Middle East, and Africa (CEEMEA) later this summer.
AlleyWatch caught up with CEO and Cofounder Valeria Morozovsky Girimonte to learn more about the inspiration for the company, the upcoming launch of CEEMEA supported by a new London office, fundraising as a female Latino founder, and the company’s recent funding, which brings the total funding raised to $9.9M across three rounds.
Who were your investors and how much did you raise?
This is REDD’s first institutional financing and we raised $5.8M, led by Nassau Point Investors. Other investors include Neil Osborn (Chairman of REDD Intelligence) and Thomas Barry (President and CEO of Zephyr Management L.P.)
Tell us about the product or service that REDD Intelligence offers.
Headquartered in New York, REDD Intelligence is a leading provider of material intelligence on emerging market event-driven special situations. Through an online platform and mobile applications, REDD delivers real-time news and analytics on more than 1,400 emerging market companies. REDD’s recognized team of journalists and analysts continuously reports on trading catalysts, allowing bankers, asset managers, and advisers to focus on opportunities relevant to their unique market or business needs.
What inspired the start of REDD Intelligence?
Our founding team, consisting of Financial Times and Thomson Reuters alumni, believed that the needs of emerging markets investors, as well as bankers and lawyers active in the space, were not properly satisfied by global platforms that take a cookie-cutter approach to these increasingly important and nuanced regions.
How is REDD Intelligence different?
REDD’s innovative architecture was conceived and developed using our partners’ combined experience of more than three decades with a global client base of hundreds of leading global advisors and asset managers active in emerging markets. Other established financial news services cannot compete due to:
- Hardwired “one size fits all” approach to emerging markets
- Difficulty adapting to a highly specialized market
- Niche marketplace and the highly defensible, relationship-based nature of emerging markets.
What market does REDD Intelligence target and how big is it?
A $28B financial information market.
In particular, for REDD, we target 10K+ institutions around the world, including global and local investment banks, pension funds, sovereign wealth funds, insurance companies, hedge funds, family offices, law firms, mutual funds, financial turnaround firms, financial advisors, credit rating agencies, and corporates active in the space.
What’s your business model?
We are built on a multi-tiered subscription model with clients committed to annual-to-multi-year contracts. We are proud to have a renewal rate of more than 90% which is a result of providing a much-needed service and listening to the evolving and real-time needs of our client base.
How has COVID-19 impacted your business?
Globally as of the end of July REDD was growing at over 40% (GAAP revenue YoY) with Asia growing at over 120% YoY.
Market turmoil has increased the need for accurate (and in some cases market-moving) information on rapidly changing situations across the globe.
For example, we track all the airlines in Asia and Latin America that are currently restructuring. In some emerging markets, the local governments are unable to provide stimulus packages (as in Europe, US, China) leaving the private sector to its peril. Also, with business travel frozen, international investors in New York, London, Zurich, etc. are unable to travel to local markets to visit these companies, hence relying more on third-party providers like REDD with boots on the ground and unmatched local networks and reach.
What was the funding process like?
Check out Scott Galloway’s post on Female/Latino women percentage of VC funding: 0%.
Female/Latino entrepreneurs definitely struggle to fundraise. Initially, I tried to seek out capital in Silicon Valley as I lived there for 8 years before moving back to the East Coast last summer. The Valley is very consumer-oriented and every story has to invoke a Unicorn.
We are a very successful niche player, and I recalled being asked: why we were planning to be profitable so soon in the model. My response was: because we can. In one of the other 50+ rejections, I heard that the respective fund was not keen to proceed because they had serious doubts I could raise subsequent rounds, my answer to that was that I was building a sustainable company and not a fundraising machine.
The fundraise landscape changed significantly after the WeWork debacle and the prospect of many more former darlings whose business models and cash churn were called into question. It was clear that London and New York would be a more appropriate match for our business model and our current investor base reflects exactly that.
The fundraise landscape changed significantly after the WeWork debacle and the prospect of many more former darlings whose business models and cash churn were called into question. It was clear that London and New York would be a more appropriate match for our business model and our current investor base reflects exactly that.
What are the biggest challenges that you faced while raising capital?
Finding investors comfortable with a niche player and limited size of the round. We were determined to keep the round small as per our current growth metrics and projected explosive growth for 2021 onwards as we complete our global expansion.
What factors about your business led your investors to write the check?
Nassau Point has loads of experience with niche data companies and it is clear they understand our business model. They have provided value-added and accretive feedback since we first met them late last year.
What are the milestones you plan to achieve in the next six months?
Complete our global emerging markets expansion with the launch of our CEEMEA platform (Central, Eastern Europe, Middle East, and Africa) headquartered in London; as well as work on all our AI and alternative data technology initiatives to support REDD’s core focus on both early detection and follow- up of event-driven and special situation credit opportunities.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Focus on product-market fit and obsess over customer feedback. Once you have something that the market wants and needs, capital will follow.
What’s your favorite outdoor dining restaurant in NYC
Café Altro Paradiso.
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