South African investment company Knife Capital has launched its web-based due diligence service YueDiligence, aimed at bridging the information gap between entrepreneurs and investors.
YueDiligence automates and structures the initial due diligence process to capture, analyse, summarise and communicate the commercial potential of a company in an investor-friendly format, enabling users to make informed decisions.
The online tool combines dynamic company information with a peer database and self-learning algorithms, generating various gap analysis reports and providing an interactive dashboard, action points, growth recommendations, indicative company valuation range and an active due diligence checklist.
“The lack of access to funding is perceived as one of the top constraints inhibiting the growth of early-stage ventures worldwide, but lack of access to information may be the real reason why not more entrepreneurial ventures get funded,” said Keet van Zyl, co-founder of YueDiligence and Knife Capital.
“Without seamless information exchange during the due diligence process, the investment cycle drags on and deal fatigue creeps in. Transactions with good intent and exciting prospects fail to close, resulting in the misallocation of resources for all parties involved.”
Knife Capital partner Andrea Bӧhmert said entrepreneurs were at the forefront of industry disruption, and that corporates need to build better partnerships with SMEs to future-proof themselves.
“Alternative risk-quantification methods like YueDiligence facilitate these partnerships and match investors of time and/or money with like-minded entrepreneurs,” she said.
“In the knowledge economy, changes to a company’s risk profile should have an immediate effect on its valuation and access to blended financial products. YueDiligence is a disruptor that will help shape the banks of the future by changing the way SME support can be measurably facilitated.”
Knife Capital said the product comes from the company’s years of experience in preparing various buy-side and sell-side due diligences, resulting in portfolio exits to the likes of Visa, General Electric and Garmin.
YueDiligence product iterations are on-going, and the team plans to launch a second version tailored to pre-revenue startups focusing more on business model development than business building before year-end.
Other future developments will allow users to interact with indicative valuation metrics for a better understanding of their value, and offer integrations with third party service providers to extend the offering.
A standard one-year subscription to YueDiligence costs ZAR5,000 (US$400), allowing companies to update information and improve their ratings over time.
Corporate plans start from ZAR50,000 (US$4,000) for 12 companies, allowing investors, incubators and other users who manage a portfolio of companies to customise their own private deal room, aggregate portfolio metrics, benchmark companies and track the impact of value-adding activities. There is also a free version with limited functionality.