Forefront Communications

Mergermarket: Causality Link Could Raise Series B in 2021, CEO Says

OpenFin

Alexandra Hamer

Alexandra Hamer

Causality Link has runway through at least the end of 2021, even without any new customers or new capital, Haren said.

It already expects a three- to six-month hiccup in customer acquisition because of the outbreak, Haren said. While the global coronavirus pandemic has increased customer interest, prospective clients are not actively signing on as they instead reassess their budgets, he added.

It would look for around USD 20m in the next round, likely tapping venture capital firms in the software industry or one of its large partners or customers, Haren said. It raised USD 5m in a Series A round led by French family office HORIZON, bringing its total funding to USD 8m.

Causality Link targets the financial industry, namely asset managers whose quants use the aggregated research in their analysis. It also targets large corporations that want to understand the dynamics around their own companies, their competitors or the broader market.

Causality Link has two paying customers, one of which is a Brussels-based specialty chemical company called Solvay [EBR:SOLB]. The startup has reassessed its customer acquisition goal and now expects to sign on five new money management companies and between five and 10 industrial companies, similar to Solvay, before year’s end, Haren said.

Access to the platform can cost hundreds of thousands of dollars per year, though Haren said it is quickly becoming a “must-have” product in the wake of the pandemic because it can find links that might not otherwise be obvious.

For example, its aggregation analysis found the pandemic-fueled decline in Airbnb’s business significantly affected HomeDepot. That’s because people often do the work themselves when looking to fix up a property on a budget. Banks, which have issued loans to these customers, could also be hit by Airbnb’s slowing demand because the borrowers may now struggle to repay their debt.

The platform has 84 million different documents and can read up to four million documents per day. Although Causality Link does secure public documents from screen scraping government websites, the long-term business model is to buy documents from content aggregators, Haren said. It works with the software company Naviga, receiving 4,000 daily newspaper feeds in real-time, including content from seven of the largest eight newspapers in the US, he added.

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