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Breaking the IPO lull, market intelligence company Tracxn was listed recently in October. Founded in 2012 by Neha Singh and Abhishek Goyal, Tracxn offers private company data for deal sourcing, deal diligence, mergers and acquisitions, and tracking emerging markets, among others. The company has quickly become one of the five players in this industry, globally.
Analytics India Magazine caught up with Tracxn co-founder Neha Singh to talk about the company, its IPO listing, and future plans.
Tracking Tracxn’s progress
“Before we started Tracxn ten years ago, I was an investor with Sequoia Capital, broadly investing in the technology space. I moved to the Bay Area to do an MBA at Stanford University. It was here that Goyal and I started Tracxn,” said Singh. The idea behind starting a company like Tracxn was to deal with the dearth of information about the private markets for marketing investors. This is unlike the public markets for which there are platforms like Bloomberg and Capital IQ for investors to use.
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Investors (for private markets) spend a lot of time aggregating data. Earlier they had to build the whole stack themselves, that is take the data filed by the company, standardise it and then use it for investment purposes. This was similar to how public market investing worked 30 years ago. “There is just a lot of data and the problem compounds when you consider that the private market is growing at a break-neck speed. As the private market is becoming a large asset class, they also need similar platforms. So we did just that with Tracxn. Interestingly, all our initial customers in terms of direct market investors and large corporations were within a 10-mile vicinity of our campus,” Singh told us.
“We work with anyone who’s looking at private markets. Our customers include secondary private market investors, venture capital funds, private equity funds, corporate development teams, M&A teams, and technology offices that are either acquiring companies within the different sectors or partnering with solutions in different sectors,” said Singh. Currently, Tracxn’s team is 800-member strong. There are close to 80 employees working across the tech and product departments. The second-largest team is that of data production, which also includes sector focus analysts. Lastly, the third largest team is sales and marketing with over 200 members.
Since the domain still largely remains unexplored, Tracxn currently faces limited competition. “Globally, we have five-six companies that currently exist in the private market data space. This is also because the market is probably in its first decade of evolution. That said, there is a fair amount of differentiation that exists in this domain. People have started using data platforms for the first time in the past decade. The trick lies in acquiring a lot of customers who have not used these kinds of platforms,” said Singh.
AI and analytics for Tracxn
Tracxn deals with a sea of information and data points. Needless to say, analytics and AI form a major cog in the wheel of its operations. Speaking about the same, Singh said, “We have a million companies we are talking about here and there exists a very large amount of unstructured data about them. We use a lot of data mining, analytics, and intelligence techniques to mine data that in turn helps users find ‘interesting’ companies based on the historical data.”
Tracxn uses AI primarily for three purposes – to aggregate information about companies of interest, to find out companies in a particular sector, and for parsing financial information for private companies to build their models on top of it.
Speaking about Tracxn’s IPO, Singh said, “We started the process a year-and-a-half ago when we got cash flow positive. Last year, we officially filed the DRHB and received the approval in three months, by November. The start of this year was slow but as soon as we had a good opportunity window, we hit the market.” She further explained, “Going public offered our company a good opportunity to grow for the next two decades. We don’t have to think about the next fundraise and can focus on the long-term goals.”
Although they started the company at Stanford University, Tracxn founders deemed it was best to have an India headquarter – firstly because the country is the hub for delivery and is poised to become the leader for such data platforms; secondly, it is the centre for profitable businesses. “Our internal target, right now, is to build an iconic global data platform out of India. So far, India has been the back office for most financial data companies – they may have offices here but the headquarters are in New York and London. We want to change that,” Singh signed off.