Zirra Will Supply PrivatEquity.Biz’s New $30 m Secondary Platform with Insightful Research Reports On Select Companies

PrivatEquity.biz, a peer-to-peer platform that directly connects shareholders in pre-IPO private tech companies with accredited investors, has secured total shares for sale of close to $30 million in senior employees or former employees’ stocks in 25 leading private tech companies such as Palantir, DocuSign, Gett, Outbrain, IronSource, and Ezbob.

PrivatEquity.biz will be the first platform in Europe and Israel to allow senior employees or former employees to sell their stocks in private tech companies directly to accredited investors, without the need to go through corporate management. It will allow more employees to enjoy an earlier exit and will help democratize the tech industry, allowing more people to enjoy the wealth created by it.

To provide a transparent arena for smooth and thoughtful transactions, PrivatEquity.biz hired the analysis and research services of Zirra, a technology-based company that analyzes companies using big data and AI. Zirra will supply the platform with insightful research reports on select companies. PrivatEquity.biz also hired accounting firm BDO and law firm APM to make sure the platform works with full compliance with the local law.

PrivatEquity.biz allows accredited investors in Europe and Israel for the first time to buy private tech companies’ share in smaller portions, as the market has previously limited the access only to institutional or large-scale investors. With PrivatEquity.biz, smaller accredited investors of $100,000 per investment and above will have the ability to diversify their investments further and get access to equity in pre-IPO startups by associating them under a limited partnership. It will enable them to manage the risk accompanied by an investment in a tech company while employees will be able to retain some of their stocks.

Dealing with the private tech sector is also full of blind spots, as both those selling stock and investors alike have a hard time valuing shares and assessing the success of a company. Zirra’s AI-powered research and analysis service will provide accredited investors and stock sellers with research reports of private companies, that will supply them with data and insights that will improve their visibility into private tech companies. This includes estimated valuations, NLP-generated lists of competitors, expected time to exit, risk and success factors, as well as a rating of the team, product, momentum, and execution.

PrivatEquity.biz’s platform provides further tools to ensure that the transactions run smoothly. These solutions include tools for determining the pricing of shares in a private company, digital ledger technology used to enhance equity management capabilities, and an online secure data room for transaction participants, which also allows investors to exchange confidential documents.

About 2,000 accredited investors are listed on the platform, which was recognized by Red Herring as one of the top 100 innovative companies in Europe in 2016. A few months ago, PrivatEquity facilitated the selling of stocks of the taxi-hailing app Gett to a London-based investor, which was offered for sale by a senior employee in the company. No details regarding the value of the shares were disclosed, but Zirra has estimated Gett’s valuation last April to be around $2.2 billion.

“PrivatEquity.biz is the only global platform that allows ordinary, small-scale accredited private investors to buy secondary stocks of pre-IPO startups, and employees or former employees in those companies to sell them directly and enjoy better liquidity,” said PrivateEquity.biz founder and CEO Sigalit Cohen. “As more employees and former employees can now enjoy an earlier exit, the tech industry is being democratized. Working with reliable research, legal and accounting teams will support the platform with a smooth, compliant, transparent, and discreet deal making for both sides.”

“Such a platform is important in a world in which investment decisions in private companies are still too dependent on rumors or skewed information, rather than on objective, data-driven, thoroughly informative analyses,” said Moshit Yaffe, CEO, and co-founder of Zirra. “The platform will also allow for accredited investors to invest in better companies which align better with their portfolio, with the help of up-to-date data, insights, and expert opinions.”

 

Here’s Why You’re Paying Too Much For Decent Research

By Aner Ravon, Co-Founder and Chief Insight Officer at Zirra

Have you ever seriously considered buying an expensive car even if you know you’re not going to drive it enough to justify the price? Take the Lamborghini Veneno as an example. It’s the most expensive model of a well-known brand and the second highest expensive model in 2016. Evidently, it makes Tesla look like a Toyota. It has a 6.5-liter V12 engine that gets to 60 mph in 2.9 seconds, it was built to celebrate the automaker’s 50th birthday, and it costs a whopping $4.5 million.

For a car, it may make sense if you can afford it. You’ve worked hard for that car – you earned it by making smart decisions, and you had a good deal of luck that helped to leverage your victories. Now, you deserve to indulge yourself in a futuristic machine and impress your friends, even if you know deep down that you’re not going to drive it to the office every day.

Now let’s change the subject to the research tool you’re using to make those smart investment decisions. You may not realize it immediately, but you’re probably already using the Lamborghini equivalent of a research company. If you seriously want to research companies or a market as a venture capitalist or an angel investor, your current choices are between a Lamborghini, Ferrari or Bugatti. And you didn’t even know you’re working with Lamborghini!

The Banks

A Financial Times story uncovered earlier this month the tense discussions between fund managers and banks over the price of analyst research, as the investment industry is facing the new European rules that will force fund firms to explain clearly to investors how much of their money is spent on research. Indeed, it’s difficult to explain to someone that you spent $30K on “access for a research platform” and up to $10M “to provide a fund manager access across the research company’s workforce.” It’s not hard to believe that fund managers are going to substantially reduce their spending on external research. Fund managers deserve a much scalable, faster, and cheaper service.

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Gartner & Forrester

Take Gartner and Forrester, for example. Price and return are sometimes blurry. It’s hard to know how much you are going to pay and what you’ll get in return, especially if you’re a VC or a private investor. They are positioned as markets for everyone, offering multiple services with no specific focus. They serve CEOs, CIOs, CTOs, IT managers, SMBs, enterprises, startups, investment banks, hedge funds, and investors. They offer local and global services all around the world, giving all sorts of advice. As high-priced premium markets with a wide offering, they not only provide research but also extra services such as conference and workshop management, consulting, and publication rights.

The price for access to a basic database begins at $20K-$30K and rises to $40K-$55K for unlimited access to analysts by phone or email. In case you want to have a more tailored solution, the price can rise to about $85K, according to some clients, depending on the access to a vertical-specific analyst and marketing analyst you demand. Adding Gartner Invest service, an analysis service for investors, means adding tens of thousands to the final price. If you want to have a better price, be ready to haggle or pray.

How effective are services such as Gartner or Forrester for a seasoned VC investor seeking to analyze a new deal flow of young startups? The library of research is rich in volume but stays pretty generic. The research material marks new trends, creates comparisons between giants, and sometimes points to promising later stage startups worth looking at. Their analysts can share their predictions about next trends and they might know large corporations intimately or point at the major players in a market. But Gartner and Forrester are suffering from what most research companies are currently suffering from: They can’t get into details in order to support pinpointed business decisions.

CB Insights, Pitchbook, and VentureSource

The notion that market research companies can’t get too specific about companies also applies to market databases such as Pitchbook, CB Insights, Mattermark, VentureSource, Tracxn, DataFox, and Privco. They offer a huge database of millions of startups with basic information on each, mostly based on data from CrunchBase. Each adds some market analysis on the top – such as clustering companies together on a common basis, pointing at new trends, and tracks VCs according to their portfolio.

Similar to their older brothers in the market research market, they too charge expensive subscription plans (Mattermark charges $6,000 a year, Pitchbook takes up to $1,500 a month, Tracxn offer its services for $2000 a month, and CB Insights charges up to $12,000 a month), but none of them can support a startup investment decision. It all comes back to the same issue: Market research companies prefer the coziness of being a database and watching the market from above. Very few take the step to actually say something bold about the data they provide. They are the Lamborghini and Bugatti of the research world, but they stay in the garage most of the time and no one seems to be that impressed when you drive them.

In order to make the right investment decision, you need to do due diligence on a company, have the most up to date details, and get the right insights about them. You’ll need to figure out whether the founding team is as good as they claim to be, and if the product is original and innovative – not just another risky “me too.”

Data Should Be Provided For Free

We think that data should be well packaged and provided for free, and that insights and productivity tools should be well built and provided for as a premium service. We believe that smart insights are a necessary addition to data analysis. Every requested startup has a dedicated report packed with in-depth insights. Each report is focused on a single company, giving you unbiased information on everything you need to know about it – the good and the bad.

We recently launched our free Spotlight Report feature which is a big milestone for us. Zirra’s Spotlight Reports are not just data sliced, diced and repackaged. They provide the essence of Pitchbook and CB Insights, for every company, immediately and for free. They include a unique NLP-based similarity mapping engine that, using hundreds of thousands of news articles, automatically identifies companies written about in a similar way. Other proprietary algorithms scan the media to spot meaningful events in the company’s history. The automatic report also includes web and mobile traffic analysis, HR open positions, general company information, key team members, their email and social links, and patent and trademark scanning. [Click here to try it]

Zirra’s insights are synthesized from metrics produced by our proprietary AI and machine learning algorithms and an expert network we use to calibrate the data system and to produce exclusive insights on companies and markets. The proprietary big data technology allows us to scale and evaluate startups metrics within seconds and our network of experts allows us to create qualitative and valuable insights that no other directory, including Gartner or Pitchbook, can create.

At Zirra, we don’t believe that you should have to pay for information that can be aggregated from the internet. We’re happy to give this information for free. Instead, we think our customers should only have to pay for analysis.

While the Spotlight Reports are free, our premium products will still be available: Company Analysis Reports for $99, Due Diligence Reports for $2,000-$5,000, and Expert Matching for $500-$2,000.

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