If you need specific data on the financial markets in the US, there is an abundance of resources and information available. Yet, if you need this same information from an emerging market you’d likely be out of luck. Redd Intelligence understands the value of having this information and is doing the legwork to make it a reality. Covering Asia, Latin America and shortly CEEMA (Central & Eastern Europe, Middle East & Africa), Redd brings financial institutions, investors, and advisors the ability to make the most well informed decisions in underrepresented and often opaque markets. The markets move on information and Redd delivers the information you need to know about the emerging markets.
AlleyWatch chatted with founder Valeria Girimonte about the business and their most recent round of funding.
Who were your investors and how much did you raise?
Our investors prefer not to be named, but include a retired Hedge Fund Portfolio Manager who interestingly enough had no experience in Emerging Markets (but saw and understood the value proposition). Additionally a strategic angel who has vast experience in Fintech, initially as an entrepreneur himself with successful exits. We have raised $4.1M to date and have delivered gross revenues close to double that with our first platform alone.
Tell us about your product or service.
REDD is a leading provider of intelligence on distressed and high yield event-driven special situations in the emerging markets. The company launched its Latin America service in 2014, developing a market leading product trusted by thousands of financial and legal professionals who rely on REDD to stay abreast of events like Venezuela’s financial implosion, the latest corporate victims of Brazil’s political scandals and help them make sense of complex, politically-driven situations in Mexico.
The company recently started operations in Asia from its base in Singapore, making waves with reports on distressed commodities trader Noble Group, Chinese real estate developer Hsin Chong and market-leading coverage of Reliance Communications and its attempts to avoid an in-court restructuring.
Gabriel De Sanctis and I cofounded REDD in 2013 after realizing that large multinational financial information providers failed to properly cover the emerging markets, adopting a short-sighted “one-size-fits-all” approach suited to coverage of developed markets. The company raised over $4M in funding over two rounds since then from a group of strategic angel investors and has not yet tapped VC funding, aiming to leverage its success in its core markets.
How is it different?
REDD continues to break the mold in a male dominated industry. Almost everyone on the senior management team are women including REDD’s Global Head of Sales, Global Head of Research, Latin America Managing Editor, and Global Head of Content Aggregation. In each region REDD operates, the company has an “A Team” of experienced financial journalists, analysts and lawyers that is genuinely motivated by the emerging markets and the content and services REDD provides. The company aggressively invests in technology and its staff. There are no wild parties with endless booze. We put our money where it matters.
What factors about your business led your investors to write the check
Certainly, bootstrapping and waiting to have a working platform and our first institutional clients in was key. And yes, there are plenty of investors out there willing to get involved at the idea stage but this allowed us to be more picky and bring on board people who really got our business model. You can say just by what they ask for in your meetings. Founders commitment was also key, we had left our corporate jobs months before fund raising and we were well into our year of sweat equity. We were putting our lives into it, and investors saw that.
What was the funding process like?
Our funding process went well. Technically, while we call it our series A, internally (and with our investors) we refer to them as Series A and Series B because that is how our lawyers decided to call them on paper and we are not obsessed with the optics of around labeling — a topic I find fascinating. That is something we have always been very aligned with our investors on; call it whatever you want to call it, for us, it is the round that take us to the next level of growth. Our first round, if anything, came a bit late (July 2014) after officially launching our first platform in March 2014. We bootstrapped and put our savings towards getting the best technology and people and we waited to raise until we had something to show. We were signing our first institutional clients contracts while papering our first round. That allowed us to stand strong on our valuation. Technically our second round should have been with an institutional and we had plenty of inbound interest (a full summer of VC phone calls) but we talked to our investors and they preferred to double down. Our next step will definitely be choosing the right VC to partner with to complete our global expansion and also to help bring under REDD’s umbrella some fantastic small data and content companies out there to further enhance our product offering. We live to bring value, ideas and tools to our clients (we are proud of over 96% renewal rate) so it is only natural to continue to expand to synergistic verticals.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
One advice for entrepreneurs would be not to get stuck on the idea of how success should look like in funding your company. Don’t say that you need to raise seed, then you wait x months and raise A and you need to get one of this big names in your space involved. Your path to success can be dramatically different from that. Explore all sources of funding, explore working line of credits, securitize receivables, there are plenty of ways to grow to get you there.
Where do you see the company going now over the near term?
We are aiming to continue expansion and fulfill our mandate to offer complete emerging market special situation coverage, opening its offices in London to cover CEEMEA (Central Eastern Europe, Middle East and Africa) early next year. REDD is also open to strategic alliances and examine other opportunities to accelerate growth.