Alex Goodwin and Ayo Ekhator both know the messiness of private market data, having worked at top shops like Blackstone and Leonard Green before meeting up at Harvard Business School.
Why it matters: Now they’re building something to clean it up; and maybe to clean out some of the younger staffers who enter and analyze such data, first on the LP side and eventually on the GP side.
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Driving the news: Bridge, developer of workflow automation software for private capital allocators, tells Axios that it’s raised $5.1 million in seed funding led by Thicket Ventures.
- Other backers include current or former execs at firms like Morgan Stanley, Bain Capital, Dynasty, CD&R, and KKR.
Zoom in: Goodwin and Ekhator argue that much of private capital’s liquidity problem is a really data problem, with LPs often unable to easily understand components and market values of their investments — thus restricting secondaries and related transactions.
- “This is about the second and third tier data which, if it’s there, is buried on page 80 of a GP report,” explains Ekhator. “We used to make these reports for our portfolios, and think they’re kind of BS.”
- Bridge ingests all of those documents, and eventually plans to leverage anonymized data from other clients to provide context. So far it has around $150 billion in assets across its customer base — many of whom are RIAs or multi-family offices — with Goodwin cautioning that it needs visibility into trillions of dollars before providing valid benchmarks.
The big picture: Part of the story here is just how the rapid growth of private capital is spawning a new cohort of tech-enabled service providers. And how the influx of retail investors will require different transparency and distribution tools.
- But another part is how such startups, including Bridge, threaten to replace the post-college crowd at investment firms, many of whom initially are tasked with advanced data entry. As with so many other white-collar industries, it’s unclear what will happen to more senior roles when the junior pipeline is mothballed.
- Bridge’s co-founders acknowledge that their early PE jobs might not exist in a few years, particularly at smaller firms. But they also believe the AI revolution could let new staffers get out of modeling earlier and into discussions with prospective investees, thus creating a younger generation of partners.
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