Arjun Sethi speaks with the confidence of someone who knows more than other people, or someone who knows that appearing overly confident can shape perception. In any case, when he tells me over Zoom that “in five years I will have 50% of the world’s private data” at his fingertips, and that it will be “impossible to compete against me,” he says it with all the authority of Warren Buffett dropping the truths of the stock market.
Sethi, co-founder of the venture firm Tribal capitalis talking about ends, a subscription-based AI software platform for “quantitative diligence” that Tribe most recently launched and which Sethi says can improve outcomes for as many investors as can sign up. However, the mere perspective raises questions. I mean, if Termina is so good, why are Sethi and Tribe giving other investment firms a way to better compete? Related to this, why should other investors trust Termina, which ingests its clients’ data to improve over time?
Firstly, it’s worth learning more about Termina itself, which launched last month with two products. At a high level, one of those products is a dashboard that aims to help investors quickly assess the health of any company by comparing it across companies in Termina’s initial proprietary data set that grows with every new customer Termina secures. . The second offering is designed to help investors understand the external forces at play, including expected changes in the market. Think of Termina as something that “gives you the power of 1,000 associates,” Sethi says.
Sethi declines to reveal the names of the early clients, but says they include pension funds, sovereign wealth funds and private equity funds, which he characterizes collectively as a “large class of people who deploy capital and want to stay under the radar.” .
What he likes to discuss most are his ambitions for the business, whose biggest head start, Sethi says, is the transactional data from roughly 1,500 companies that Termina has fed into more than one major language model (which Sethi declines to name), along with with an LLM. which he says Termina itself has created to improve investors’ benchmarking capabilities.
To take advantage of the tool, Termina clients also provide the team with their own raw data. “They may be using it for mergers and acquisitions, so a private equity firm will get rid of its own data.” [into it] and the same goes for any other venture capital company,” he says. What that software yields, apparently, are comparative data sets of companies that exist “across the board, at all stages,” says Sethi, who calls Termina, founded just six months ago, the “true Bloomberg of markets.” “private.”
Naturally, some will scoff at the prospect of Termina handling so much sensitive data, which is every company’s most precious resource. This may prove doubly true given Termina’s ties to Tribe Capital.
Still, he dismisses such concerns. On the one hand, he says, Tribe invests in early-stage companies through Series C and seeks venture-like returns. Meanwhile, Termina “is allowing anyone in any asset class to think about how to invest in software companies, regardless of their stage, so they are two very different strategies.”
Sethi, who sold a previous company called MessageMe to Yahoo and then worked with VC Chamath Palihapitiya on his company Social Capital before co-founding Tribe, also suggests he has the reputation to achieve what he’s trying to do.
“Part of it,” Sethi says of persuading other investors to use Termina, “is just that it inherently builds a lot of trust over a long period of time.”
We’ll see. Certainly, you can see both the advantages and disadvantages of Termina’s close relationship with Tribe, which owns a stake in Termina. (So far, Termina has raised just over $10 million, including from Sethi personally.)
For example, a team that has been working together for a long time is an advantage. In addition to Sethi, who stepped down as Tribe’s CEO last December, taking on the role of president and chief investment officer to focus in part on Termina, the seven-person startup includes others who split their time between Termina and Tribe.
Among them is Alex Chee, who co-founded MessageMe with Sethi, joined him at Social Capital, and subsequently co-founded Tribe and Termina with him. Chee oversees daily operations at Termina; He also remains Tribe’s chief product officer. Jake Ellowitz, another co-founder of Termina and, for a short time, an employee of Social Capital, is Tribe’s CTO.
On the contrary, Tribe is quite young and has yet to prove himself. The 30-person team already has an impressive $1.6 billion in assets under management, but was founded just six years ago. He has enjoyed some success with crypto token investments, but his other investments are yet to come out and the trajectory of some of those bets is unclear, highlighting the limits of quantitative analysis. Take Carta, the cap table management company that has come under fire for tactics some consider questionable, or Bolt, the one-click payout company that was hot until it wasn’t.
It’s also worth noting that Termina customers don’t agree to share their data with the team exclusively, so if someone’s black box is better, Termina could be screwed.
Once again, Sethi stops talking about challenges. “The reason we exist and why customers work with us is because we have the best data in the world and we have the best product. We do not have any specific patent. Everything we do is trade secrets. And our tool is not 10 times better than what exists; It’s like a thousand times better than what people’s existing workflow looks like.”
As for what that means for Tribe, it apparently has bigger ambitions now. “My goal is that, as a venture company, I can’t do much. As a company, I can do a lot more.”