AI Behind the Idea Europe

Behind the Idea: Portend

One in five of all startups fails within its first business year. For those that survive, a tense and turbulent relationship can form between founder and investor as tracking a company’s progress from an investment standpoint can be challenging.

Julie Cunningham is the founder of Portend, a compliance-as-a-service platform providing due diligence on investments into startups.

We sat down with Cunningham to find out how Portend is seeking to improve the relationship between a company and its VCs – creating a more transparent investment process for both sides.

Tell us more about your company and its offering
Julie Cunningham, founder, Portend
Julie Cunningham, founder, Portend

Portend is a leading online compliance-as-a-service platform leveraging AI to provide real-time due diligence on investments into startups, detecting and warning of anomalies.

By providing live alerts for any anomalies or early warning signs, we help founders, VCs, boards and investors protect shareholder value.

Working from within a portfolio company, similar to a spam filter, our platform provides alerts against thousands of checks to ensure boards have time to act – instead of reacting.

What problem has your company set up to solve?

Portend was created to enable investors to track the financial standings of their portfolio live. It acts as an early-warning system and allows action to be taken before things worsen and a startup fails, as so often happens.

The current model is broken and relies wholly on trust post-investment. It is not surprising therefore that one in five of all startups fail in the first year of business, often due to poorly managed finances. Even startups baked by VCs only have a success rate of 25 per cent. Furthermore, VCs lose their entire investment in 30-40 per cent of scale-up cases.

We recently asked 100 venture and private equity firms behind closed doors how often they check a portfolio company’s bank statements or access the account data post-investment. The answers were five per cent every quarter, and five per cent every six months. Thirty-nine per cent requested statements but never checked them, and 51 per cent said never – only checking when making initial investments. These responses show how portfolio managers struggle to keep up with the demands of swollen portfolios and workloads.

We help founders protect their company from a range of issues so they can concentrate on building a great business. We help VCs enter board meetings with the questions that really matter, helping build a better rapport with their teams. Portend provides visibility and security to both sides of the same coin.

Since launch, how has your company evolved?

Since launch, we have already had a pipeline of over 20 VCs. We are working vehemently to fine-tune our technology to provide a seamless real-time due diligence tool which is effective, efficient and does not miss any detail. The platform works alongside investment installed alongside Key, D&O and other insurances. We also leverage AI to detect anomalies, but every warning is checked by a human before it is flagged to a customer.

In addition to our VC pipeline, we have partnered with a number of portfolio founders, family offices, and LPs to integrate Portend into their systems and provide the insights and data to increase the success rate of investments.

As we grow, further partnerships will be announced.

What has been the biggest challenge or most ‘tricky moment’ to overcome?

Our biggest challenge is undoubtedly the status quo. Despite the exhaustive due diligence process startups face to secure funding, there is a complete lack of financial due diligence post-investment, a fact that is blindly accepted by those in the VC world.

Portend is trying to change this approach. VCs leaving startup investments unsupervised is not trusting, its reckless.

What are your biggest achievements or ‘proudest moments’ so far?

Our most remarkable accomplishment has been the swift development of the software behind real-time due diligence. The Portend system means that as an investor with very little time, you can walk into any board meeting equipped with critical questions to take action early instead of reacting on a call.

Our financial, communication, and simulated governance tools mean that at a glance, data and insights are available to investors which can inform decisions which could rescue a failing startup.

How would you describe the culture of your company?

The culture of Portend is engrained in our mission. We are bold, disruptive and determined to achieve clarity during the whole life cycle of an investment. Our team is made up on experts with years of experience in their fields and networks to match. We are fully digital and react efficiently and effectively to any challenges.

Most importantly, we are calling for the industry to take a stand against the reliance on trust that is VC startup funding and challenge the lack of financial due diligence post-investment.

What’s in store for the future?

This is just the beginning for Portend. We are continuing to fine-tune the technology which underpins our real time due diligence platform. Additionally, we plan to announce new partnerships, coverage in new regions and further unique insights into the world of VC investment.

The ultimate goal is to shift the culture and prove that with the technology available today, all financial relationships should be based on facts, not trust.


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