Arjun Sethi speaks with the confidence of a man who knows more than the rest, or who knows that sounding highly confident can shape perceptions. Regardless, when he told me over Zoom that “in five years, I will own 50% of the world’s private data” and “you won’t be able to compete with me,” he said it in all the right ways. Warren Buffett’s authority gives up on the truth about the stock market.
Sethi, co-founder of venture capital firm Tribe Capital, is talking about Termina, a subscription-based artificial intelligence software platform used in Tribe’s recently launched “quantitative surveys,” which Sethi says can improve performance for as many investors as possible Sign up. However, this prospect alone raises questions. That said, if Termina is so good, why do Sethi and Tribe provide a better way for other investment firms to compete? On a related note, why should other investors trust Termina as it absorbs its clients’ data and improves over time?
First, it’s worth learning a little more about Termina itself, which soft-launched two products last month. At a high level, one of the products is a dashboard designed to help investors quickly assess the health of any company by comparing it to companies in Termina’s initial proprietary data set, which grows with each new Termina acquisition. grow with customers. The second product is designed to help investors understand the external forces at play, including expected market changes. Think of Termina as “giving you the power of 1,000 employees,” Sethi said.
Sethi declined to name early clients but said they included pension funds, sovereign funds and private equity funds, all of which he described collectively as “a large group of capital deployers who want to keep a low profile.”
What he’s more comfortable discussing is his ambitions for the company, which Sethi says is its biggest starting point: transaction data on about 1,500 companies, which Termina has fed into multiple large language models (which Sethi declined to name). , which also offers an LL.M. He said Termina itself was created to enhance investors’ benchmarking capabilities.
To take advantage of the tool, Termina’s customers also provide the company with their own raw data. “They may use it for M&A, so private equity firms will dump their own data [into it] The same goes for any other venture capital firm,” he said. Ostensibly, the software outputs a comparative data set of companies “comprehensive and across all stages” of existence, said Sethi, who called Termina, founded six months ago, “the real Bloomberg for private markets.”
Of course, some will scoff at the prospect of Termina handling so much sensitive data, every company’s most valuable resource. That’s probably doubly true considering Termina’s ties to Tribe Capital.
Still, he dismissed the concerns. On the one hand, Tribe invests in seed-stage C companies and seeks venture capital-like returns, he said. At the same time, Termina “enables anyone in any asset class to think about how to invest in a software company, regardless of stage, so those are two very different strategies.”
Sethi sold an early-stage company called MessageMe to Yahoo and later worked with VC Chamath Palihapitiya at his company Social Capital before co-founding Tribe. Sethi also said he had the reputation he needed to make his endeavor a reality.
“Part of it,” Sethi said of convincing other investors to use Termina, “is you just build a lot of trust over a long period of time.”
We’ll see. Of course, one can see the pros and cons of Termina’s close relationship with Tribe, which owns a stake in Termina. (Termina has raised just over $10 million in funding to date, including from Sethi personally.)
For example, a team that works together for a long time is an advantage. Sethi resigned as Tribe’s chief executive in December and became chairman and chief investment officer to focus some of his energy on Termina. In addition to Sethi, the seven-person startup includes others who work between Termina and Tribe.
These include Alex Chee, who co-founded MessageMe with Sethi, joined him at Social Capital, and later co-founded Tribe and Termina with him. Chee oversees Termina’s day-to-day operations; he remains Tribe’s chief product officer. Jake Ellowitz is another co-founder of Termina. He briefly served as an employee of Social Capital and currently serves as the chief technology officer of Tribe.
Conversely, the Tribe themselves are still fairly young and haven’t really proven themselves yet. The 30-person agency has an impressive $1.6 billion in assets under management, but it was founded just six years ago. It has had some success investing in crypto tokens, but its other investments have yet to exit, and the trajectories of some of those bets are unclear, highlighting the limitations of quantitative analysis. Take Carta, the equity structure management company that has been criticized for what some consider dubious tactics, or Bolt, the one-click checkout company that was once buzzy but has since stopped being so.
It’s also worth noting that Termina’s customers don’t agree to share their data exclusively with the company, so if someone’s black box is better, Termina could be doomed.
Sisi once again shook off the topic of challenges. “The reason we exist and the reason customers work with us is we have the best data in the world and we have the best product. We don’t have any specific patents. Everything we do is a trade secret. Our tools It’s not 10 times better than existing tools; it’s a thousand times better than people’s existing workflows.”
As for what this means for the tribe, he clearly has bigger ambitions now. “My whole goal is, as a venture capital firm, I can only do so much. As a company, I can do more.”
