Target Information

9fin, founded in London in 2016, is an innovative AI-powered analytics platform designed to overhauling the debt capital markets, an industry that currently oversees $141 trillion in assets. The initiative arose from the founders' frustration with the inefficiencies and outdated practices pervasive in the debt markets. Co-founders Steven Hunter and Huss El-Sheikh, both veterans of the credit markets with experience at JPMorgan and Deutsche Bank, recognized the urgent need for technological advancement in a sector that has relied on archaic systems for far too long.

Since its inception, 9fin has positioned technology at the heart of its operations. The platform allows investment bankers, advisers, fund managers, traders, and legal professionals to access and analyze millions of data points, promoting informed decision-making through AI-driven insights and real-time market updates. Leveraging generative AI for its services, 9fin is the first information provider in the sector to offer users an advanced Q&A capability, facilitating efficient data retrieval from extensive databases.

Industry Overview

The debt capital markets, comprising a vast array of financial instruments, are notably larger than equity markets, amounting to nearly $141 trillion. Despite its immense size, the industry has witnessed significantly slower innovation compared to its equity counterpart. While equity markets have evolved with advanced analytical tools, debt markets have remained stuck in outdated methodologies since the 1980s, characterized by fragmented data and manual processing.

As the demand for high-quality financial information surges, the global financial data market reached over $42 billion in spending in 2023, marking a 12% increase from the previous year. Within this landscape, the credit markets generate approximately $58 billion annually in debt deal fees, emphasizing the critical need for timely and accurate information in high-stakes transactions.

In recent years, the landscape of private credit markets has shifted, with alternative lenders capitalizing on the opportunity created by investment banks' retreat. This evolving environment has led to advisory fees for debt transactions surpassing those of mergers and acquisitions or initial public offerings. Investing in more sophisticated tools is no longer optional but rather essential for success in the competitive debt market.

Rationale Behind the Deal

The recent funding of $50 million led by Highland Europe in 9fin's Series B round underscores the critical need for innovative solutions in debt markets. With notable backing from existing investors and the addition of Highland Europe to the board, 9fin is well-positioned to further its mission of revolutionizing the sector through advanced technology, strategic market expansion, and the cultivation of world-class talent.

This investment aligns with the rising demand for AI-driven insights and streamlined processes in the debt capital markets, which have lagged behind their equity counterparts. As 9fin continues to enhance its platform and expand its services, it addresses a key gap in the market for high-quality, accessible financial information.

Investor Information

Highland Europe is a prominent growth-focused investment firm that invests in technology-driven businesses across Europe. With a strong track record of backing innovative companies, their strategic investment in 9fin reflects a commitment to supporting transformative solutions in underdeveloped markets. Highland's involvement not only provides financial backing but also valuable expertise in scaling technology businesses, essential for 9fin's continued growth.

Alongside Highland Europe, 9fin has garnered support from several influential investors, including Spark Capital, Redalpine, Seedcamp, 500 Startups, and Ilavska Vuillermoz Capital. The collective experience and network these investors bring to 9fin are invaluable as the company plans to innovate and expand its presence in a rapidly evolving market.

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The investment in 9fin represents a compelling opportunity within the debt capital markets, a sector that has historically struggled with inefficiencies and a lack of innovation. Given the increasing demand for data-driven insights and the urgency to modernize how information is processed, 9fin's technology is likely to pave the way for significant growth in this field. With a firmly established client base encompassing major players in the industry, the platform has already demonstrated its value by enhancing operational efficiency and accuracy for its users.

Moreover, the infusion of capital will enable 9fin to further enhance its AI capabilities, expand its market reach, and potentially lead the charge in reshaping the debt markets. This aligns well with broader trends in the financial industry, where the integration of technology plays a critical role in achieving competitive advantages.

Overall, the investment appears to be strategically sound. Should 9fin continue its trajectory of growth and user adoption while addressing the evolving needs of its clients with innovative solutions, it stands to redefine how information is accessed and utilized in the debt capital markets, making it a highly promising investment opportunity.

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