Today, I am excited to introduce you to our new name, Hum Capital, and to our new cloud-based funding platform, the Intelligent Capital Market, that brings a Kayak-like experience to institutional fundraising, eliminating the friction experienced by both companies and investors in the process.
In my previous life as an investor at Draper Fisher Jurvetson, this was exactly the type of business I tried to find and finance. Turns out, it didn’t exist, so together with my co-founders, Csaba Konkoly and Chris Olivares, we set out to build it instead. Founded as Capital Technologies in 2019, we’re now entering a new chapter as Hum, with strong momentum and clear conviction in our mission.
SaaS can Revolutionize the Fundraising Process
The rise of SaaS and cloud-based technologies has made it easier than ever to build a business around a brilliant idea. Notoriously tedious, labor-intensive tasks and siloed business functions now run smoothly, efficiently and synchronously in the cloud. One could say the arrival of these technologies has helped make modern businesses hum. But the same is not true of the fundraising process, which remains a barrier for many growing companies.
The fundraising process is often exclusive, inefficient and lacking in transparency. Founders lose valuable time evaluating their options, courting investors, and trying to prove their value—all before they have the chance to pitch. Investors spend countless hours accessing, organizing, and analyzing data to understand a company’s financial picture—all before deciding if they’re going to invest.
Like the quant revolution that transformed the public markets, the private markets too are becoming more data driven. It is estimated that 70 percent of business applications are cloud-based, generating volumes of valuable company data. The availability of this data is an opportunity for founders to supplement traditional fundraising decks and static metrics with performance insights that help substantiate valuations — and make for a more compelling pitch. This shift also requires investors, many of whom have underinvested in technology, to rapidly modernize in order to capture critical investment insights and underwriting data.
For the past two years, our team has been quietly building the Intelligent Capital Market to help companies and investors take advantage of this abundance of data in a way that far exceeds the capabilities of traditional Excel-based models, bringing new levels of clarity, accuracy and conviction to the way capital allocation decisions are made.
Our platform: how the Intelligent Capital Market works
- Live data connections to 100+ SaaS systems of record: Companies can connect over 100 cloud-based business systems to Hum’s platform, including Quickbooks, Netsuite and Google Analytics, offering a single destination to access valuable performance data. This real-time data ingestion forms the foundation for performance analysis that is current, accurate and comprehensive. Today, over 2,000 companies have uploaded financial data to the ICM.
- Trusted performance insights: Hum’s machine-learning system then organizes, labels and analyzes this real-time data to deliver advanced analytics, simulations and competitive benchmarks that help companies assess their performance and get the clearest picture of their valuation. With companies representing 15 industry sectors across 46 US states and a variety of growth stages, Hum is the starting point for any business wanting to better understand the story that their data tells.
- Personalized matches sourced from 250+ institutional investors: Hum helps companies connect with a diverse range of institutional investors that are connected to the ICM and ready to put their capital to work. Using machine learning, Hum helps streamline the fundraising process by matching companies with investors that are suitable for their fundraising goals, business characteristics and performance. Investors on Hum’s platform include pension funds, insurance companies, private credit investors, and alternative financing solutions with a combined $11 billion in AUM specifically for deployment into companies like those on Hum. The diversity of institutional capital on the ICM means companies can choose from a variety of investors and financing options to help them obtain capital at the right cost and flexibility for their situation.
With the Intelligent Capital Market, we’ve already helped companies raise a collective $400 million in capital on Hum, and today, we’re taking the next step to scale our business by inviting more companies and investors to experience the new way to fundraise.
Why the market needs Hum
The valuable underwriting data that has been unlocked by the SaaS revolution has sparked an explosion of alternative financing models giving companies new sources of capital beyond traditional bank loans and venture capital. While providers of these new flavors of capital have made strides in improving access to financing, no single option is right for every company – rather, companies should benefit from the diversity and depth of the global capital market. Hum makes it easy for companies to navigate the private capital marketplace.
At its core, capital is and has always been a commodity. The characteristics that should really matter to founders when evaluating financing offers are the amount, terms and cost of funding.
We started Hum built on the belief that greater access to capital won’t benefit companies unless they have a better way to understand their options, see through the fineprint and make the most informed choice for their business. That’s why we’ve focused on being a funding platform that gives entrepreneurs options in terms of the type of financing, and the investor they want to work with. In that way, our mission is to connect great companies with the right capital.
Hum empowers companies by giving them an investor’s view of their business through our advanced analytics. We also help bring new efficiency and control to the manual, unpredictable and relationship-driven fundraising process by hosting those interactions on our platform. For investors, Hum delivers investment insights and pre-qualified investment opportunities that free up valuable time spent searching for the signal in the noise.
So what gives us conviction that our approach will stick?
Because capital is a commodity, so long as it is equally flexible, the cheaper it is, the better it is for a company. Since diversification of risk is the key to cheap capital, our growing marketplace of 2,000+ companies and 250+ institutional investors becomes a diversification machine that enables us to create a cost of capital advantage for companies.
This path starts a flywheel where the more diverse businesses that come into the system, the more diversification we create for investors. The more diversification we create, the lower the cost of capital we are able to deliver. And the lower cost of capital delivered by our platform, the more diverse businesses we attract to Hum. Rinse and repeat.
If a business knows there is one place it can go to get the lowest cost of funding with higher certainty and more quickly than anywhere else on the planet, it goes to that place first. This in turn attracts more sources of institutional capital to the platform.
Referring back to my earlier Kayak analogy, how often do you book airline tickets one airline at a time? What about hotels? Isn’t it easier to start on Kayak or Airbnb? There is a reason Priceline and Airbnb are each 7x more valuable than America’s largest airline!
What’s next for Hum Capital
Building this type of multi-asset funding platform requires working in exactly the opposite order that most financing businesses are built. It required us to cut out the noise at a time when other alternative financing businesses have been trumpeting a single option at the expense of the power of the market. Instead, we have focused on product development and building a robust technology platform that would truly turn the tables on traditional fundraising.
We’re incredibly proud of what we’ve built and are excited to now share Hum with more companies and investors looking for a better way to grow. While our starting focus was debt financing, our technology platform will give us the flexibility to bring new financing solutions to market to meet the needs of growing companies.
My co-founders and I are grateful to our 55+ team members who have dug deep to help get us to this point, and to our incredible investors, including Greycroft Ventures, Future Ventures’ Steve Jurvetson, and Howard Morgan of B Capital Group who recognized our potential from the earliest days. We’re excited to welcome new additions to our executive team, Scott Brown, CMO and Yotam Troim, CPO to help us continue along our path to building a world where potential is unconstrained by capital.