Software enabled deal research and sourcing has become more commonplace in recent years with a number of platforms using data science and machine learning to generate better top of the funnel ideas for PE investors. In this article, we wanted to pull a comprehensive review of the top platforms out there on the market (as of Q4 2023), including their pros/cons and prices:
A good way to segment this market based on a 2x2 of (i) asset focus (Public vs Private) and (i) the nature of the funds using the platform. In our experience the private equity universe can be crudely broken down into three broad categories:
Each of the groups have their own needs and thus require a slightly different mix of platforms and data sources. Lets take a closer look at the individual platforms themselves:
When it comes to selecting the right private company research and origination platform, it is helpful to consider the most common use case for the investor. If the goal is to look up information on a particular target that an M&A adviser has mentioned, Company Research platforms such as Pitchbook or GainPro are the best as they contain a deep amount of information on a given universe of companies. Alternatively, if the goal is to "filter" a large amount of companies into a small subset of off-market opportunities to reach out to, deal origination platforms are better suited for that as approach.
Note of caution: In our experience, the likes of SourceScrub or Grata, are only effective when paired with a very robust outbound origination effort - e.g., hiring 2-3 associates to do cold emails and calls with prospective companies. This investment approach was pioneered by the likes of Summit and TA, and is not appropriate or well suited for most PE funds.
The most established in this category and used by large cap, mid market and growth investors. The platform primarily focuses on private companies, however has built out a fairly robust comps and financials module for listed companies as well in the recent years. They also offer industry thought pieces and market maps, which are helpful for sector research / coverage.
A recent new-comer to the market, GainPro was started by a group of ex-McK consultants in Europe. The platform has a very clean user interface and focuses on commercially relevant analysis of the target - e.g., ownership, market, competitors, financials, etc. GainPro also allows to research markets (e.g., industrials in Europe), which is helpful for thematic investors.
ListAlpha has a unique Company Research + CRM offering which allows to research any company in the world based on publicly available information and 3rd party APIs. The platform combines new deal discovery with deal flow tracking, which enables for investors to see new deals in the context of prior deal flow and advisers that are known to the fund. ListAlpha also integrates with Crunchbase and PitchBook, allowing deep dive into financial, valuation and ownership information.
The freemium version of Pitchbook focused on VC-backed start-ups. Don’t expect any proprietary deal flow here, however as a basic research and screening tool for VC funds, this platform is great. More applicable for VC and growth rather than PE.
VC and start-up-focused platform similar to Crunchbase , however more premium and with more robust financials and data points available. Frequently used by VC funds and corporates.
Indian-based platform started by two ex-Sequoia investors. Similar UI and focus to Dealroom, however with a wider range of offered functionality, including a rudimentary CRM module.
The more established of the two origination platforms, having been founded in 2014 by Tyler Fair, who has previously build a bespoke origination solution for his employer (Serent Capital). Great industry classification features and ability to search companies based on past conference attendance.
Expert-interview based platform that allows to access the transcripts of expert calls conducted by other investors. Althrough initially popularized by hedge fund customers, the company has been increasingly expanding in the private equity as well and has been investing in coverage of late stage VC-assets that are likely to list.
Another public markets platform historically very strong in equity research, which has recently been expanding into private markets. The software has great search capabilities and UI that allows to cut across thousands of documents to find the right mention or sentiment on a target. AlphaSense has also recently started offering expert network-like transcripts that allow to research individual companies and markets.
These platforms focus their attention in the realm of Investment Banking and M&A and offer primarily structured financial data for listed companies and securities (e.g., bonds, commodities, etc.). In PE, they are more applicable to the large cap side of the market, where valuation analysis is more relevant (e.g., take-over situations) and listed competitors are generally more common. These are industrial grade platforms (e.g., Factset employs 10k staff globally) with extensive data feeds, API connections and Excel plugins, however they do tend to suffer from an ageing user interface and tech stack given just how long they have been around.
Founded in 1999, Capital IQ started as a provider of software and analytics related to public markets. It was sold to McGraw-Hill Financial in 2004 for more than $200 million and has since been part of their portfolio. Not as robust as Factset in terms of functionality, but is considered a standard entry level piece of software for any financial institution no matter the size. The user interface has not aged well and is slowly starting to resemble a mix of Bloomberg and Windows 95.
Founded in 1978 (!) in New York, the company has grown into a very diversified platform with $2bn+ of revenues and a number of products catering to both buy side and sell side of the market. Very strong excel integration functionalities, which make it a standard choice for investment banking M&A departments (which then as a result gets frequently carried over into PE funds who hire from banks)
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