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9fin, a fast-growing information provider for corporate credit investors, has raised $50 million in funding as it battles for dominance in the debt research market.
Highland Europe, a prominent growth capital investor, will lead the 9fin Series B round, which will be officially announced on Monday. Although the parties have not disclosed 9fin’s implied valuation, the Financial Times previously reported that the London-based fintech currently has annual recurring revenue of about $25 million and is valued at about $500 million. It was reported that it would be.
Stephen Hunter, who co-founded 9fin in 2016 and currently serves as its chief executive, believes a data services company serving the fixed income market and generating annual revenue of $1 billion will soon be created, according to FT. told.
“There are people out there who can build something on the scale of FactSet, Morningstar, Refinitiv, Bloomberg. I think there will be at least a $1 billion revenue business built in this space,” Hunter said. said in an interview.
Hunter, 32, started his career at JPMorgan in the UK as an investment banker in the fixed income markets and later became a credit investor. He said he quickly realized there was insufficient data on bond issuers, which are often privately held or small companies.
“I complained to anyone who listened to how outdated the technology was in my day and complained about how horrible the data was,” he said.
Hunter founded the company with his friend and college classmate, Huss Elsheikh, who was working in technology at Deutsche Bank at the time. Although 9fin’s roots are in traditional high-yield distressed bonds, the steady shift in capital intermediation from banks to asset managers has created a new asset class in private credit and asset-backed lending.
“People are[increasingly]looking for debt-like returns on pools of money,” Hunter said, adding that the largest existing data providers are still focused on stock market investors. Ta.
“We’re thinking about where our customers are making money and what’s the most important part of the world’s financial markets: debt,” he said.
9fin has nearly 250 employees, mostly in London and Belfast, and is expected to become cash flow positive next year. The funding from Highland Europe, a prominent software venture capital group, will be focused on expanding the company’s engineering and technology business in the United States, where the company’s business is growing the fastest. Highland co-founder Fergal Mullen joins 9fin’s board of directors, and the company has raised nearly $90 million since its inception.
KKR, Carlyle and Mubadala were among the other parties that expressed interest during the sale process.
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Like its direct competitors, including Reorg, Fitch, and Debtwire, 9fin employs journalists, lawyers, and financial analysts to break news and provide analysis on credit trading and market trends. Hunter said 9fin was primarily founded as a technology company to develop better tools to collect and process vast amounts of market data.
Debt information providers often sell their products for more than $100,000 per user per year, creating a fight among top players to become the industry standard.
“Instead of winner-take-all, winner-take-most,” Hunter said.
He argued that the high cost of data services should be easily justified.
“Think about how much trading fees your trades will cost you. Do you think 9fin will help you get one more trade in the next 10 years? If the answer to that question is yes. , the return on investment for licensing costs is extraordinary. ” he said.
