Financial Poise

A Few Minutes With…Neha Manaktala, CEO and Co-founder, DealIndex

Neha ManaktalaNeha Manaktala is co-founder & CEO of DealIndex, a young alternative finance aggregator. Founded in 2014, DealIndex is part of The Grow VC Group. Manaktala has a background as an entrepreneur and finance professional with experience in investment banking, private equity and startups. She began her career in the investment banking division of Morgan Stanley in Mumbai, and in 2006, she was recruited as part of the core team to establish Lehman Brothers’ investment banking division in India. In 2010, Manaktala re-joined Morgan Stanley’s technology investment banking team in London, before joining the fundraising team at Actis Private Equity, the global pan-emerging markets firm. In 2012, she co-founded and was COO at Vizibee, an aggregated quality mobile video platform for original short video from Publishers, including the BBC.

Neha, tell us about DealIndex

DealIndex is an intelligent data and deal aggregator of private companies and assets raising capital across leading alternative finance platforms globally. At DealIndex, we provide a pulse of the market through the provision of data, research, analytics and context on the wider ecosystem. Our flagship product, a global crowdfunding aggregator, allows investors to navigate and track deals in real-time, manage their portfolio of private company investments, and is backed by extensive analysis, data and research. The dashboard provides single sign-on access to hundreds of private companies seeking capital, bringing together, curated, quality deals from leading equity crowdfunding platforms spanning five continents.

Highlight the importance of data in private investment and alternative finance

Traditionally, private company investment has remained a closely guarded market, accessible only to a small number of high net worth individuals with access to proprietary personal networks. As alternative finance opens up the marketplace to a wider number of investors, democratizing finance, so too will it enable investors to make decisions in a more systematic way. Decision making in the private market has been largely focused around intuition or ‘gut instinct,’ the result of an inherent lack of data, brought about by the guarded nature of the industry. But, as the market starts to transition online and it becomes easier to collect and analyze large quantities of data relating to investments and investor behavior, it in turn means institutions and individuals can analyze that data, performing research and due diligence in a more scientific manner, paving the way for a systematic approach to private company investment.

The availability of private company data is a game changer and every day we are fascinated by the volume of data and patterns that emerge as we observe dealflow going live from different corners of the world across platforms, asset classes and sectors, all in real-time. At DealIndex, we are tracking deals across 30 countries, five continents across 30 leading equity crowdfunding platforms. At any point of time we have over 250 live deals totaling about $450m in live funding from across the four continents. The deals are standardized across platforms, locations, currency, valuations and asset classes and mapped into over 100 different sectors.

Tell us more about the report you recently published, ‘Democratising Finance, Alternative Finance Demystified’

We embarked on this mission to pioneer an innovative dashboard to address the ‘pain points’ often faced by sophisticated investors who are keen to invest in private companies across all corners of the globe. It is throughout the course of this 12-month journey and vigorous research-driven process that we discovered the relative dearth of information on this burgeoning sector. While researching and analyzing the key players and drivers underpinning the digital investment landscape, we uncovered a whole ecosystem of players that have transitioned into the online investment space. We realized that these players and how they interrelate with one another have not been covered before in a comprehensive manner. As such, we have attempted to capture the interlinkages between the swarm of players in the alternative finance space with this report. This alternative finance industry report was prepared in collaboration with 18 leading disruptive alternative finance players, some of which include AgFunder, EquityNet, Onevest, Syndicate Room and Venture Founders.

What are some of the key themes underpinning alternative finance that you have observed through your research?

Some of the themes underpinning alternative finance include:

  • Increased transparency and access to otherwise closed off asset classes;
  • Redefinition of the term “investor” across the entire spectrum of private and public asset classes. The crowd gets access to privileged deals and the world’s largest financial institutions have started investing in companies much earlier in the life-cycle of a company;
  • Collaboration is a cornerstone of the industry as the syndication model takes hold with mobile, social media and millennials all generating network effects;
  • Increased volume of funding activity in private companies and assets, and increased amounts of companies getting funded, with customers getting involved in product development / playing a role in innovation as investors; and
  • How technology, speed, and data have come together to reduce the inefficiencies in searching and accessing private investment opportunities, thereby saving issuers and investors time in the procurement process

What are the Key Findings from the research?

  • Private investment is moving online: While alternative finance started off as a seed-stage endeavour, more recently platforms have begun to emerge at different stages in the funding cycle, disrupting traditional institutions.
  • Alternative finance is drawing more established issuers
  • Increasing institutional involvement, as the market grows in size, so too are more institutions investing in the sector.
  • Availability of data is changing: as the private investment market moves online, the ability to harvest large quantities of data surrounding investment decisions becomes easier.
  • Collaboration rather than disruption: rather than disrupting, alternative finance is developing a collaborative and synergistic model with the traditional finance industry.

What are some key trends, which investors and participants in the alternative finance market should look out for in the medium term?

  • How will global interest rate rises and financial market volatility impact both the equity crowdfunding and marketplace lending spaces? Both sub-sectors of alternative finance have surged during the Great Recession, an era of historically low interest rates.
  • Valuations are another important area to keep an eye on. Because the equity crowdfunding space is nascent, there is little data to help benchmark valuations earned through digital fundraising versus conventional methods.
  • Regulation: So far, the equity crowdfunding and marketplace lending spaces have enjoyed comparatively little regulation. This may be set to change, as anecdotal evidence suggests regulatory authorities, including the U.S. Securities and Exchange Commission, are beginning to look much more closely at the sectors. While such regulations could hurt operating margins for some platform providers, they may ultimately have the effect of boosting investor confidence and thus raising the liquidity of alternative finance markets.
  • Institutions: Given evidence of growing institutional interest in the alternative finance sector, it seems likely that large financial firms will become ever more involved in the sector.

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