Nine Four Insights

Why We Invested: Finley

We’re delighted to announce our newest strategic investment in Finley’s $3M Seed round led by Bain Capital Ventures. Nine Four Ventures cannot be more excited to partner with Jeremy, Josiah and Kevin and the entire Finley team to build a category defining debt capital management software platform. Here is a bit more about the business, opportunity and why we invested.

Finley is a debt capital management software platform for fintechs that helps structure data requests and standardize workflows in the cloud between lenders and business borrowers. Finley’s goal is to help their customers and lenders transition from manual, offline, and bespoke processes to a cloud-based system of record that improves transparency and reduces the traditional costs, time and overhead required to originate, diligence, and service a loan.

Finley was born out of Jeremy’s previous role at Goldman Sachs’ Special Situations Group, where he experienced the pain of manual, offline and bespoke workflows between the bank and its borrowers first-hand. The number of human errors and shadow costs were expensive and made it difficult to make decisions, which slowed down deals. Jeremy knew there had to be a better way. That’s when he left Goldman Sachs and recruited Josiah from Ironclad and Kevin from Nova Credit to found Finley.

After we met Jeremy it immediately became clear that the business was addressing an overlooked and underestimated pain point in a global trillion-dollar market. In the “startup world”, debt often plays second fiddle to equity in the capital markets. As many software startups become fintech companies, we expect demand for debt capital to lend to customers will continue to grow. However, the syndication, diligence and management of debt is not the core competency of fintechs. More often than not, fintechs are focused on customer experiences and user interfaces that increase speed (ie Chime: simple online banking), lower costs (ie Robinhood: zero trading fees) and remove barriers (ie Affirm: buy now, pay later). Finley offers the “pick-and-shovel” infrastructure technology that standardizes the back office “plumbing” of debt capital management allowing fintechs and incumbents alike to keep up with the speed customers expect without sacrificing compliance or time.

As PropTech continues to gain momentum in the market, we’re seeing more startups run into the pain points that Finley is addressing. Given the role debt capital plays in the financing stack of a real estate transaction, debt capital subsequently plays a critical role in the lifecycle of every asset. Without it, most real estate transactions would never get done and the incentives and benefits of the current tax system couldn’t be realized. Institutional buyers, online marketplaces, tech-enabled brokerages and rent to own and sale leaseback PropTech startups, among many others will need debt capital management software as they continue to grow their platforms. Nine Four’s relationships with lenders highlight the need for Finley and puts us in a position where we can help on both the customer and lender sides, and support the company’s roadmap as they expand across verticals.

It’s worth noting just how important a startup’s relationships with their banking and lending partners are. As startups grow, the hope is that a lender can continue to work with them in bigger and more meaningful ways that produce value for everyone. It’s exciting for a company like Finley to consider the possibilities for where their product can go along that relationship spectrum, and the value that they can help create for every stakeholder. In short, debt capital management is just the beginning. Finley’s opportunity extends beyond management and includes origination, syndication and diligence. As Finley continues to productize its debt capital management platform and layer additional products and services on top it will be fun to watch how the business evolves over time.

Congrats again to Jeremy, Kevin, Josiah and the entire team. We’re just getting started!

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