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Alfia Ilicheva came from the world of public markets, including four years at one of the world\u2019s largest hedge funds, Bridgewater. But when she transitioned over to the private side, including serving as the CEO of an Apollo-backed investment platform, she realized the difficulty of fund administration for operations like private equity and venture capital. Instead of having access to real-time and accurate data like at Bridgewater, which can rely on publicly available information, this new world was filled with manually compiled and fragmented data subject to human error and inconsistent metrics.\u00a0 \u201cHow could it be that hedge funds are so into the future and private capital markets are so backward,\u201d she remembers thinking.\u00a0<\/p>\n
As private markets explode and AI makes automation increasingly possible, Ilicheva saw an opportunity to build the next generation of fund administration software for everyone from venture capital outfits to PE giants like Apollo. After initially planning to bootstrap the project, which she named Formulary, Ilicheva was introduced to Hari Arul, a partner at Khosla Ventures, who immediately saw the appeal of the idea. Khosla is leading Formulary\u2019s $4.6 million seed round, which Ilicheva says is three times oversubscribed, with participation from Human Ventures, Serena Williams\u2019s venture firm, and others.\u00a0<\/p>\n
In the red-hot field of private investments, buoyed by the rise of private credit and massively valued companies like SpaceX and OpenAI, fund administration may not be the most alluring area for innovation. But the ability to track investments, returns, and performance\u2014and accurately convey the information to investors, or limited partners\u2014is a necessary foundation.\u00a0<\/p>\n
The existing options fall into two camps: the service side, or high-touch accounting companies, like SS&C and Citco, or the software side, like Carta. As Ilicheva interviewed general partners and former clients in her user research, she realized that nearly everyone was dissatisfied with the existing options to the point that most turned to shadow fund administration, where they would hire outside firms but keep their own books at the same time. \u201cWhen you raise a fund, your dream is to generate alpha by investing capital, not redoing someone\u2019s work,\u201d Ilicheva said.\u00a0<\/p>\n
Ilicheva planned to find a happy medium between the two models by leveraging AI to massively scale up the service approach, creating software for their own in-house accountants, which Ilicheva playfully calls bionic accountants. \u201cThey\u2019re really focused on having a grip on the numbers and delivering service, but they\u2019re not manually entering things in an Excel spreadsheet, which has been the industry\u2019s burden for the past decades,\u201d she said. \u00a0<\/p>\n
The challenge in creating a tech-enabled services company, of course, is scale, with a pure SaaS model able to grow at a much faster clip. When I asked Khosla\u2019s Arul how he thought about the approach, he said the key is to deliver the vast majority of the product through technology: \u201cIt\u2019s important for any entrepreneur or any investor to look at an AI-enabled services business and say, the margin of how this business runs looks more like a technology company than a services company.\u201d\u00a0<\/p>\n
Arul said that while Khosla is not yet using Formulary, which is just now coming out of stealth, he\u2019s optimistic for a future where tedious processes like ensuring data accuracy for LPs can be fully, reliably automated. Ilicheva mentioned one possible future use case for Formulary as drafting LP letters, which Arul wholeheartedly endorsed, along with a portal where investors could communicate directly with the system to understand the value of positions, fund deployment, and future capital calls. \u201c[That] sounds pie in the sky relative to what the reality is today,\u201d Arul said, \u201cBut it doesn\u2019t feel out of reach.\u201d\u00a0<\/p>\n
Leo Schwartz Submit a deal for the Term Sheet newsletter here.<\/p>\n Joey Abrams curated the deals section of today\u2019s newsletter.<\/em> Subscribe here.<\/p>\n – <\/span>ClickHouse<\/b>, a San Francisco-based analytics, data warehousing, and observability platform, raised $400 million in Series D funding. <\/span>Dragoneer<\/b> Investment<\/b> Group<\/b> led the round and was joined by <\/span>Bessemer<\/b> Venture Partners<\/b>, <\/span>GIC<\/b>, <\/span>Index<\/b> Ventures<\/b>, <\/span>Khosla<\/b> Ventures<\/b>, and others.<\/span><\/p>\n – <\/span>Alpaca<\/b>, a San Mateo, Calif.-based brokerage tech firm, raised $150 million in Series D funding. <\/span>Drive<\/b> Capital<\/b> led the round and was joined by others.<\/span><\/p>\n – <\/span>Ivo<\/b>, a San Francisco-based AI-powered contract review and intelligence platform, raised $55 million in Series B funding. <\/span>Blackbird<\/b> led the round and was joined by <\/span>Costanoa<\/b> Ventures<\/b>, <\/span>Uncork<\/b> Capital<\/b>, <\/span>Fika<\/b> Ventures<\/b>, <\/span>GD1<\/b>, and <\/span>Icehouse<\/b> Ventures<\/b>.<\/span><\/p>\n – <\/span>Karman<\/b> Industries<\/b>, a Los Angeles, Calif.-based thermal technology company, raised $20 million in Series A funding. <\/span>Riot<\/b> Ventures<\/b> led the round and was joined by <\/span>Sunflower Capital<\/b>, <\/span>Space<\/b> VC<\/b>, <\/span>Wonder<\/b> Ventures<\/b>, and others.<\/span><\/p>\n – <\/span>XBuild<\/b>, a San Francisco-based developer of AI-powered roofing proposal software, raised $19 million in Series A funding. <\/span>N47<\/b> led the round and was joined by <\/span>Rackhouse<\/b> Ventures<\/b> and <\/span>Andreessen<\/b> Horowitz<\/b>.<\/span><\/p>\n – <\/span>one.five<\/b>, a Hamburg, Germany-based developer of an AI-powered packaging workflow platform, raised \u20ac14 million ($16.3 million) in Series A funding. <\/span>Dr. Hans Riegel Holding<\/b> led the round and was joined by <\/span>212<\/b> NexT<\/b>, <\/span>Symbia<\/b> VC<\/b>, and others.<\/span><\/p>\n – <\/span>Noise<\/b>, a New York City-based platform where users can trade on the relevance of internet trends, raised $7.1 million in funding. <\/span>Paradigm<\/b> led the round.\u00a0<\/span><\/p>\n – <\/span>Net<\/b> Health<\/b>, backed by <\/span>The<\/b> Carlyle<\/b> Group<\/b>, <\/span>Level<\/b> Equity<\/b>, and <\/span>Silversmith<\/b> Capital<\/b> Partners<\/b>, acquired <\/span>Keet<\/b> Health<\/b>, a Phoenix, Ariz.-based digital health platform. Financial terms were not disclosed.<\/span><\/p>\n – <\/span>AgomAb<\/b> Therapeutics<\/b>, an Antwerp, Belgium-based developer of therapies for immunology and inflammatory diseases, filed to go public on the Nasdaq. <\/span>EQT<\/b> Life<\/b> Sciences<\/b>, <\/span>Fidelity<\/b> Management & Research Company<\/b>, <\/span>Pontifax<\/b>, <\/span>Sanofi<\/b>, <\/span>Redmile Biopharma Investments<\/b>, <\/span>Cormorant Asset Management<\/b>, <\/span>Pfizer<\/b>, and <\/span>Canaan<\/b> back the company.<\/span><\/p>\n – <\/span>SOLV Energy<\/b>, a San Diego, Calif.-based infrastructure services company for the power industry, filed to go public on the Nasdaq. The company posted $2.1 billion in revenue for the year ended Sept. 30.\u00a0<\/span><\/p>\n – <\/span>SpyGlass<\/b> Pharma<\/b>, an Aliso Viejo, Calif.-based developer of treatments for chronic eye conditions, filed to go public on the Nasdaq. <\/span>Glide<\/b> Healthcare<\/b>, <\/span>Samsara<\/b> BioCapital<\/b>, <\/span>Vensana<\/b> Capital<\/b>,<\/span> New Enterprise Associates<\/b>, <\/span>RA<\/b> Capital<\/b> Management<\/b>, and <\/span>Sands<\/b> Capital<\/b> Alternatives<\/b> back the company.<\/span><\/p>\n – <\/span>Arctos<\/b>, a Dallas, Texas-based private equity firm, hired <\/span>Santiago<\/b> L\u00f3pez-Vilas<\/b> as an operating partner. L\u00f3pez-Vilas previously served as CEO of <\/span>Real<\/b> Madrid<\/b> Estadio<\/b> and deputy general manager of <\/span>Real<\/b> Madrid<\/b> CF<\/b>.<\/span><\/p>\n – <\/span>FirstMark<\/b>, a New York City-based venture capital firm, promoted <\/span>David<\/b> Waltcher<\/b> to partner and <\/span>Aman<\/b> Kabeer<\/b> to principal.<\/span><\/p>\n<\/div>\n #Khoslabacked #Formulary #raises #million #seed #AIpowered #private #fund #manager #software<\/p>\n","protected":false},"excerpt":{"rendered":" Alfia Ilicheva came from the w… <\/p>\n","protected":false},"author":1,"featured_media":13986,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[9654,9653,137,9652,138,913,1868,1569,1175,9064,4605,1570,1571],"_links":{"self":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/13985"}],"collection":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13985"}],"version-history":[{"count":0,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/13985\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/media\/13986"}],"wp:attachment":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13985"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13985"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13985"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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