Arjun Sethi speaks with the confidence of someone who knows more than others, or at least knows that sounding confident can shape perceptions. In any case, he told me on his Zoom that “in five years, he will have 50% of the world's personal data in his hands,” and that “it will be impossible to compete against me.” ” When he says it, he says it with all his might. Warren Buffett's authority has dropped the truth about the stock market.
Sethi, co-founder of venture firm Tribe Capital, is talking about Tribe's recently spun out Termina, a subscription-based AI software platform for “quantitative diligence.” Sethi says they can improve performance for as many investors as they can enroll. But the mere prospect raises questions. So if Termina is so good, why are Sethi and Tribe giving other investment firms a competitive edge? Why should other investors trust Termina to improve?
Termina was founded just six months ago and soft-launched two products last month. One is a dashboard that aims to help investors quickly determine a company's health by comparing across companies in Termina's initial proprietary dataset and combining it with customers' own data. . The second is designed to help investors understand the external factors at play, such as expected market changes. Think of Termina as “the empowerment of 1,000 allies,” says Sethi.
Mr. Sethi declines to name his early clients, but they include pension funds, sovereign wealth funds and private equity funds, all of which he collectively describes as a “low-profile… “Large capital deployers who want to do things like that,” he characterized.
He is happy to talk about his business ambitions. Its biggest advantage, according to Sethi, is that Termina has transaction data for about 1,500 companies that it feeds into multiple third-party large-scale language models (which Sethi declined to name) and Termina itself It is said to be his LLM created to increase profits. Benchmark function.
To leverage this tool, Termina customers also provide their own raw data. “Private equity firms will dispose of their data because they may be using it for M&A.” [into it] The same is true for other VC firms,” he says. The software ostensibly spits out a comparative data set of companies “across the board and across all stages,” Sethi said. He calls Termina “the true Bloomberg of private markets.”
Some people scoff at Termina's handling of so much sensitive data, which is every company's most valuable resource. This may prove doubly true given the relationship between Termina and Tribe Capital.
Sethi dismisses such concerns. For one thing, Tribe invests in companies from seed to Series C stages, seeking venture-like returns, he says. On the other hand, Termina says, “This is two completely different strategies because it allows anyone from any asset class to think about how to invest in software companies, regardless of their stage.”
Sethi, who worked with VC Chamath Palihapitiya at his company Social Capital before selling his previous company called MessageMe to Yahoo and then co-founding Tribe, said he was unable to accomplish what he set out to do. It also suggests that you have the necessary reputation.
“Part of it is you're essentially building a lot of trust over a long period of time,” Sethi says of convincing other investors to use Termina.
Let's take a look. Indeed, there are both advantages and disadvantages to Termina's close relationship with Tribe, which owns Termina stock. (Termina has raised just over $10 million to date, including a personal donation from Sethi.)
For example, a team that has been working together for many years is an advantage. In addition to Sethi, who stepped down as Tribe's CEO last December and instead assumed the role of chairman and chief investment officer to partially focus on Termina, the startup's seven members will have time between Termina and Tribe. It also includes other people who are dividing it.
These include Alex Chee, who co-founded MessageMe with Sethi, joined Social Capital, and went on to co-found both Tribe and Termin with Sethi. Chee oversees the day-to-day operations of his Termina. He also remains Tribe's Chief Product Officer. Jake Ellowitz, another of his Termina co-founders and a short-lived Social Capital employee, is his CTO at Tribe.
Conversely, Tribe itself is quite young and has yet to prove itself. The 30-person organization, which already boasts an impressive $1.6 billion in assets under management, was founded just six years ago. While the company has had some success with investments in crypto tokens, other investments have yet to be exited, and the trajectory of some of those bets is unclear, highlighting the limitations of quantitative analysis. . Take, for example, Karuta, a cap table management company that has come under fire for tactics that some have questioned, or Bolt, a one-click checkout company that has been in the news for a while.
It's also worth noting that Termina's clients have not agreed to share their data exclusively with the company. So if someone else's black box is better, Termina might be happy.
Once again, Sethi waves off talk of challenges. “The reason we exist and our customers work with us is because we have the best data in the world and we have the best products. We don't have any specific patents. Everything we do is a trade secret. And our tools aren't 10x better than what's out there. It's just a matter of what people's existing workflows are. It’s 1,000 times better than being.”
What that means for Tribe is that he apparently has bigger ambitions now. “My biggest goal is that there are limits to what one venture can do. As a company, I can do more.”
