Middle-market companies -- the 99% of businesses making up 50% of the U.S. gross domestic product (GDP) that rank somewhere between small mom-and-pops and humongous transnationals -- can be difficult to engage as a market and often are overlooked and underserved by IT service providers as a result.
Many small and mid-size companies have not moved into the digital realm yet, largely because they work only locally or nationally. However, recent macro-dynamics -- including the COVID-19 pandemic -- have caused more and more small companies to go online, making it possible for financial analysts to collect private-company information at scale for the first time. This is becoming a major tipping point in the mid-market world.
A growing number of professionals across private equity, investment banking, corporate development, and management consulting are now reaching this huge number of businesses by using a new company intelligence software package made by New York City-based Grata.
The 6-year-old startup makes a SaaS-based business-to-business search engine that helps dealmakers find and target private companies. Nothing this extensive has existed previously, CEO Andrew Bocskocsky told ZDNet.
Former Harvard University classmates Bocskocsky and COO Nevin Raj told ZDNet that they co-founded Grata to fix this glaring data gap in the U.S. private economy. Their platform is an intelligence engine that provides deep coverage of private companies, featuring previously unreachable information and nuanced contextual insights on millions of companies aimed to help savvy dealmakers unlock the traditionally hard-to-access data on middle-market companies.
"To put it simply, the middle market has been historically difficult to access," Bocskocsky said via email. "Our approach to this problem is entirely unique. Incumbents rely on manual processes and can't keep up with the scale of the middle market. Grata captures detailed private company information through advanced automated technology. There really is no comparison."
How the Grata platform works
The product combines a web data acquisition engine that scans billions of websites and proprietary machine learning (ML) and natural language processing (NLP) models that intuitively process unstructured information into nuanced, contextual insights on private companies, Bocskocsky said. The result is a fast and simple search platform that empowers users to find the right insights into the most relevant businesses.
"Corporate dealmakers and institutional investors need robust, searchable, and accurate data to identify the needle-in-the-haystack opportunities within the myriad of companies. Grata has figured out how to aggregate, package, and deliver this data to customers in a scalable and repeatable way," said Jeff Fluhr, co-founder and General Partner of Craft Ventures. "And they've done this particularly well for middle-market companies, the hardest segment to crack."
The company announced on Feb. 22 that it had closed $25 million in its Series A funding round led by Craft Ventures, bringing its total funding to $35 million. Craft Ventures was joined by Teamworthy Ventures, Altai Ventures, and Eigen Ventures, with continued participation from Bling, Accomplice, and Touchdown Ventures, as well as current and former M&A executives.
The company's latest round of funding will sharpen its perspective on the private economy, further refining its machine learning models and accelerating product development, Bocskocsky said. Grata raised seed funding in 2020 and has grown more than 8x since January 2021, he said.
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