An acquaintance of mine is the former CFO of a midcap public semiconductor company. Despite holding assets worth tens of billions of dollars, when they sought to raise debt financing, they were initially unable. Why not? Simply because they didn’t have a Moody’s rating. Ultimately, they got the rating and the financing, but it cost them some seven million dollars to get there!
Before banks hand out debt capital, they need to subject the company to heavy due diligence. If the amount of capital is large, they really want to see a credit rating from a service like Moody’s, S&P, or Fitch.
But getting that rating is exceedingly expensive and time-consuming. The big three ratings agencies interview the company’s management and investors, comb through its risk management procedures, and conduct forensic analysis of its financials. It is a laborious, manual process, conducted by highly-trained investigators, which takes months to complete, and can cost millions of dollars.
Moreover, most private companies and even some public companies are considered too small to qualify for such a rating, leaving them to choose between expensive venture debt to fulfill their needs, or nothing at all.
This is why I am so excited to announce that Martini.ai has joined Neotribe’s investment portfolio via our Neotribe Fund II. Martini’s cutting-edge platform propagates real-time equity, bond, and loan market information. An AI-powered knowledge graph produces credit profiles on 700,000 companies from the outside in, leveraging a huge amount of public and private corporate financial data. That is incredibly useful to investors and lenders as a means to evaluate and compare companies against one another by size, sector, and other factors.
When you look back at corporate financial performance over time and compare it to Martini’s analysis, Martini’s corporate credit assessments can even outperform those of the ratings services. And if a company opens their books to Martini for more in-depth analysis, Martini can do an even better job.
Finally, what’s really exciting is that these profiles are updated—daily!
It’s easy to see how valuable the applications for this are. Debt issuers can use Martini to evaluate private companies without big three ratings, and also to supplement big three evaluations of rated companies on a more up-to-date basis. This lowers risk for lenders and therefore interest rates for borrowers. Martini.ai truly has the power to democratize borrowers’ access to working capital, lines of credit, and other debt vehicles essential for growth.
Martini is led by two brilliant PhD Co-founders, CEO Rajiv Bhat and CTO Rohit Singh. About cooperating with Neotribe, Rajiv had this to say:
“NeoTribe have been invaluable thought partners. They played a key role in identifying the full potential of artificial intelligence in this space, pushing us to dream big and take on a problem with a much bigger impact - helping smooth the flow of debt capital in faster changing times.”
We could not be more excited to join Rajiv, Rohit, and the entire Martini.ai team in democratizing access to debt financing and creating the future of corporate credit.