Unlocking exclusive private credit investments
What is your background?
I started ‘play’ investing at age 8, my first taste of trading and finance. After college, I joined Merrill Lynch - in 2009, certainly an interesting time to start out! After less than three years in traditional finance, bouncing between Merrill, Bank of America, and BlackRock, I grew bored of the industry and its lack of innovation. I naturally gravitated towards the startup ecosystem in New York, which in 2012 was really starting to take off, and built Lumenary, a consulting company that helped other early-stage startups build their companies. We provided the product, marketing, branding, and engineering expertise to help companies at their most critical stage. Some of our clients became really well known, including companies such as BlockFi in the crypto wealth management space. At that point, I realized that, for the right idea at the right time, we had the team, the knowledge, and the network to be able to build a successful venture-backed company.
What problem are you solving? Did you face it personally?
The private debt market is more than $7T today and growing rapidly - as one of the fastest-growing asset classes in private capital markets; it is seeing heavy investor demand. Even more impressively, it has reached this size and scale without having much in the way of any technology. The industry operates almost exclusively on Excel, phone calls, and emails. Percent’s mission is to bring public market efficiencies through market standards and data standards, wrapped up in a single comprehensive platform facing all transaction participants to push this market to new heights.
Percent is using innovative technology to reinvent the private debt industry. We’ve tackled everything from standardizing deal structures to make comparisons and risk assessments possible to normalizing data across asset classes and improving reporting to bring more transparency and insight to the market. We’ve created efficient, automated workflows that connect the three sides of the market to drive efficiency and get more deals done more quickly, at a fraction of the cost.
I believe this market will continue to grow with the same types of market and data standards and credit protections that exist in the public debt market combined with transparent, efficient, and standardized processes.
Who we are today and what we do definitely evolved from my own personal pain points. As is the case with most startups, where you start isn’t where you end, and our trajectory has very much been shaped by the market. When we were founded in 2018, we saw a gap in the market for an alternative investment platform that gave investors optionality - shorter duration investments, lower minimums, all at comparable yields. As we started to do more and more of these transactions, we realized the real opportunity was in building the infrastructure to power these transactions since there were no tools available to track an order book, manage compliance, or even monitor the performance of these assets. We discovered these problems only after launching our initial idea, but by identifying them, we have been able to evolve and adapt our business model to what it is today.
What is your solution?
Percent has created a platform that unites the three sides of private credit transactions – the investor, the borrower, and the underwriter – and provides them with access, technology, transparency, and data in a single marketplace. Our technology delivers public market efficiencies, solving many of the traditional problems of the private debt markets to create opportunities for all participants.
Borrowers have a proprietary solution to set up and manage debt capital needs at a low cost, accelerating time to market and broadening their investor base.
Investors can diversify their portfolios with short-term, high-yield investments with uncorrelated returns and passive income.
Underwriters have access to a streamlined underwriting process, a deeper pool of potential clients and investors, and automated and real-time syndication tools. With Percent, they can underwrite more deals in less time with standardized documentation and due diligence.
Why do you believe that this is the perfect time to build this product?
Alternatives are here to stay. There’s tremendous optionality and potential for growth if we can remove some of the barriers that have traditionally made these deals so time-consuming and opaque.
There’s certainly an incredible appetite – not just from investors seeking diversification and yield but also from the borrowers, who can’t access funding from traditional sources, and the fintech lenders who have stepped into the void left by banks and are constantly seeking their next investment. In today’s volatile markets, private credit can be viewed as a reliable asset class that continues to perform even in a high rate environment, boding well for our future prospects as we develop into the industry leader in this space.
Why are you excited about the industry you are building in?
It’s a greenfield opportunity, and the chance to reinvent a sector is very exciting. As the upstarts, we can identify the problems and bottlenecks, look for solutions that have worked in other markets, and use technology to innovate and create a better, more efficient marketplace.
As the private debt market matures, there’s the potential for explosive growth if we can create the right support and environment for market participants. As the market grows, we will have more and more data to optimize pricing, create transparency, and improve confidence – creating a virtuous cycle and incredibly powerful flywheel that continues to accelerate our growth.
What has been the biggest lesson you have learned so far on your journey?
There are many, but my top three are:
1) Never say never. Early in my career, I vowed to never go back to finance given my experience, and yet here I am running a capital markets fintech company.
2) Nothing’s ever as bad as it seems, but nothing’s ever as good as it seems, either. Stay level, and it will all be okay.
3) Focus on yourself and execute on your plan. Don’t worry about what everyone else is doing because they’re too busy focusing on themselves too.
Who have been your biggest supporters up until today (give shoutout)
There are so many people to thank along the way who have believed in us since day one when we didn’t have much to show for it.
White Star Capital (Eddie Lee and Sep Alavi), who were not private debt experts by any stretch of the imagination but went down the rabbit hole with us and took the time to understand the ins and outs of our business from top to bottom.
Navtej S. Nandra and Oliver Wriedt who have both been amazing board directors and have shared so much of their wisdom from years of experience in financial services.
Our investors, borrowers, and underwriters who have continued to support our growth in any and every way they can.
Our incredible team who are devoting their time, their talent, and all of the energy and creativity into building an iconic financial technology firm.
And, of course, to my father for introducing me to investing – and for making sure I wasn’t risking real money as an 8-year-old!
Asks: What do you need help with? (Not fundraising related)
For the first few years, we were the sole underwriter, sourcing borrowers and creating deals for investors to invest in. We used that experience to solve some of the biggest challenges facing private credit transactions. We funneled all of those learnings into a platform built for underwriters that recently launched. This platform provides a streamlined process and transparent approach to underwriting and syndication. We are actively seeking additional underwriters, so contact us if you are interested in sourcing new borrowers and creating products that can reach a broad institutional and retail accredited investor audience.