Home CompaniesB2B SaaS Startup Predictive Automates Annual Regulatory Filing Reviews

SaaS Startup Predictive Automates Annual Regulatory Filing Reviews

by Muriel Vega

A little over a year ago, Raj Sultanian and Carl P. Evans III landed in Atlanta to pursue their startup dreams. With their 30+ combined years of technology experience, they founded Predictive, a SaaS company that aims to automate discovery and retrieval of public regulatory filings to help users identify an investment manager. “We’ve found Atlanta to be great so far,” says Evans. “We just presented in the first round of the Startup Runway pitch competition here in Atlanta.”

Predictive helps automate the current manual (and often error-prone) process of reviewing annual regulatory filings. By using their platform, you can reduce the time and cost associated with conducting research and diligence on investment managers. Their first product, DisclosureTrack, helps you track rapidly-changing regulatory filings by letting you choose from a 1000+ investment advisor database, set up notifications, and list all regulatory data (past and present) in one place.

Evans and Sultanian talk to Hypepotamus about how their AI-first technology stands up to the competition, why you should automate your reviews, and how the team ended up founding the startup in Atlanta.

Year/Date Founded: April 2016

Number of Employees: 4

What’s your current funding status?

Predictive Inc. has been bootstrapped by founders, friends, and family. We’re currently raising a $1.25M seed round to fund 18 months of user growth and platform development and to provide the company additional working capital. We are seeking investors with experience helping early-stage B2B SaaS and data companies in the financial services space scale their business. We are also looking for investors that seek startups outside Silicon Valley.

Your Pitch:

There are over 2 million people in the financial services industry who spend millions of hours and billions of dollars each year conducting research and diligence on investment managers by reviewing billions of pages of annual regulatory filings. Most of those people spend such large amounts of time and money on the reviews because if they don’t, their companies could be exposed to legal liability if they miss red flags that could have been found by reviewing the regulatory filings. The current review process is manual, making it very costly and prone to errors. Predictive develops unique SaaS applications and an API that automates the discovery, retrieval, and analysis of those billions of pages of annual regulatory filings.

How’d you get the idea for it?

Our co-founder Raj spent the last 7 years manually reviewing regulatory disclosures for diligence, compliance, and sales both as a lawyer at an international law firm with a large number of hedge fund clients, and as in-house legal counsel at a $10B hedge fund.  After spending over 1,200 hours reviewing disclosures in one year, but still missing updates that nearly cost him a billion-dollar client, Raj teamed up with Carl to build a technology platform that would make sure nobody else would have suffer the same fate.

Tell me more about your product, DisclosureTrack. What are the features and benefits of using it?

DisclosureTrack is a SaaS application that reduces the time and cost associated with reviewing and analyzing a specific form filed with the U.S. Securities and Exchange Commission (SEC). This form, Form ADV, is the primary disclosure document filed with the SEC by the over 17,000 investment managers that have US clients, including most hedge fund, private equity, mutual fund, and venture capital managers. Form ADV contains critical information about business risks that are important for investors and other stakeholders.  

Currently, there is no way to easily (1) know when a manager has filed a new Form ADV, (2) review year-over-year changes to filed Form ADVs, or (3) summarize critical Form ADV information, in each case without manually reviewing each Form ADV.  Every day, DisclosureTrack imports newly filed Form ADVs, processes them, and alerts our subscribers when there are any updates. It then summarizes any changes from the prior filing on a single page that can be reviewed in under 60 seconds and  summarizes all the critical Form ADV information on profile pages it creates for each investment manager, keeping that information updated each time there is a new Form ADV filed for an investment manager. DisclosureTrack thus saves our subscribers significant time and money.

What problem are you solving?

There are three major problems with using public filing data from regulatory agencies such as the SEC or FINRA: (1) the information is fragmented across various different websites that aren’t indexed by Google or any other search engine; (2) the information is static – so you can’t easily analyze changes; and (3) there are no push notifications for new filings or updates.  

Predictive’s technology platform solves all three problems.  We automatically collect filings from various regulatory websites daily and store them in our central data server.  This machine learning-enabled server, which we call Predictive.AI, organizes and links together filings and changes, and makes this data and analysis available via our API. Our applications, like DisclosureTrack and PredictiveOps, use this API to notify our subscribers of new filings, automate change analysis, and allow customers to conduct complex data searches across various regulatory silos to find risks, interesting trends, and sales leads.  There’s no other application that does this right now.

Describe the market/industry impact.

There are three main industry segments within the financial services industry where our SaaS applications and API can help: (1) Diligence, (2) Sales, and (3) Governance, Risk Management and Compliance (GRC).  Combined, they represent a $12B market opportunity.  

Our applications and API will help save billions of dollars currently spent manually reviewing public disclosures by both diligence and sales teams.  We also enable complex searches and insights that aren’t even possible today – helping increase transparency and risk outcomes for subscribers.

There is growing demand for “data-driven” GRC applications – traditional applications like compliance management that automatically track public customer data for easier setup and ongoing use. Our API helps enable us to build these applications or empowers third-parties to add this functionality to new or existing applications.

Revenue Model?

We have a SaaS annual recurring revenue model for our applications. We also charge per API call for our data customers. We plan to add an application marketplace, where subscribers can purchase new or third-party add-on GRC applications. These applications will provide additional recurring revenue to the company.

Who are your competitors and how do you stand out?

Our primary competition is the status quo – manually reviewing and processing documents. There also are dozens of large scale data publishers, including Bloomberg, Factset, and Thompson Reuters, that publish regulatory data feeds or provide APIs for industry participants to license, but that data alone doesn’t help solve the problems of discovery, analysis, or retrieval, which remains manual.

There are two direct competitors that are currently organizing data across regulatory silos  – ALTX and Convergence Inc. Predictive stands out because we are the only AI-first technology company that has (1) a scalable data architecture, (2) a SaaS application platform, and (3) APIs that are simultaneously useful and extensible for sales, diligence, and GRC applications.

How does Atlanta weave into your story?

Carl relocated to Atlanta from Silicon Valley last year. He was a technology and intellectual property lawyer in Palo Alto before he decided to return to his technical roots and launch a machine learning startup. While the idea of being in Silicon Valley sounds cool, the reality is there are many reasons why a startup should consider looking elsewhere, including cost of living, labor costs, and diversity.  

Carl first became interested in Atlanta a few years ago when he was considering the general manager position at Georgia Tech’s ATDC.  In doing his research for that position, he was impressed with the growing tech community in Atlanta. Carl made the call to move to Atlanta last year with the goal of building our technical team here.  We’ve since moved our headquarters here and are based out of Strongbox West. 

You may also like