A ‘Bloomberg for startups’ aims to fight false funding data

“Forty percent of the companies listed on Crunchbase as active startups are actually in liquidation,” says Jason Edwards, founder of market research firm VentureCap Insights.

But other startup intelligence platforms put the number at 15% to 25% instead. According to Edwards, the disparity is due to the use of “web crawlers that can’t tell when a company closes because no one does a press release when they close down.”

Jason Edwards, founder of VentureCap Insights / Photo credit: VentureCap Insights

That was something that came to his attention five years ago, when he was working as a venture capitalist and realized that there was no way to get accurate fundraising data, valuations, capitalization tables, and financials of startups in Southeast Asia.

Besides heading VentureCap Insights, Edwards is also a partner at January Capital, a VC firm based in Singapore. Prior to this, he was a partner at another VC outfit, Qualgro. He also had a 21-year career in law, including a stint as partner at international firm Baker McKenzie.

While VentureCap Insights launched in January this year, Edwards said this market research platform took two years to plan and another two years to develop.

His experience as a VC and a lawyer has better equipped him to look at raw streams of data for many months to figure out how to make the product work at scale.

Edwards didn’t divulge financial details about his company, but he says that it has been bootstrapping and hit profitability within six months of its launch. He added that a third of the VCs in Southeast Asia that have subscribed to VentureCap Insights’ service have expressed an interest in investing. However, the company doesn’t require the money for now.

VentureCap Insights already has major VC funds such as Sequoia Capital, KKR, GIC, Temasek as well as and the “big four” accounting firms – Deloitte, KPMG, Ernst & Young, and PricewaterhouseCoopers – as subscribers. The company said it has further signed up clients such as Nomura, Macquarie Group, North Ridge Partners, BRI Ventures, Visa, and Kasikornbank.

Devil in the details

As the ecosystem was rapidly growing, Edwards observed that there was a real need for accurate and detailed financial information about startups and investors in Southeast Asia. Most of the market research platforms that cater to the industry, such as Pitchbook, Crunchbase, Traxcn, and CB Insights, get most of their information from press releases to see if a startup has raised money and has publicly stated any details.

However, Edwards says that about half of the media reports on fundraising are inaccurate. This makes it hard for people to know what’s really going on and provides a distorted view of the ecosystem.

These platforms are also limited because a lot of data isn’t disclosed. Startups rarely reveal their valuation and share prices in press announcements, which they don’t frequently make. “And if they do they are often aspirational, vague or embellished,” he adds.

To solve this problem, VentureCap Insights has established ties with government company registries, such as Singapore’s Accounting and Corporate Regulatory Authority (ACRA), and pulls data on startups on a daily basis. So whenever an investor that VentureCap Insights is tracking buys shares in a new company, the data comes in the preferred format and the platform is updated within an hour. VentureCap Insights then applies its own interface and charts on top of this information.

Not another Crunchbase

The Bloomberg of the startup ecosystem