Small businesses are big businesses. There are some 27 million businesses in the United States and almost all of them are private. The vast majority of these companies have fewer than 500 employees, but account for 48% of U.S. jobs and 43.5% of GDP, according to The Small Business Administration.
And although they represent nearly 50% of the US economy, private companies are hard to find, let alone get the most basic information about what they do. This lack of information has made it difficult for companies looking to enter this massive but elusive market.
Andrew Bocskocsky decided to do something about it. He is the co-founder and CEO of Grata, which, along with his co-founder Nevin Raj, started a New York-based company in 2015 that would evolve into a SaaS platform that acts as a business-to-business search engine for finding and targeting private companies.
There were plenty of data sources for public companies from Bloomberg and FactSet. And there was in-depth coverage of VC-backed companies from sources like Crunchbase. But what about the rest of the market? “What we saw as an opportunity in the market was that everything between the 10 million companies that sit in the middle market and the independent companies was left uncovered. not really enough information there. I struggled with this in some of the work I was doing; Nevin was struggling with this in his investment workflows and consulting workflows, and we decided to bring access to these businesses, ”Bocskocsky explains.
Bocskocsky and Raj found that businesses were coming online at an increasingly rapid pace. When they first started exploring space nearly a decade ago, only about half of private companies in the United States had websites. Today it is closer to 80%. Yet despite the trend, no one indexes and aggregates this information in any meaningful way.
“We decided to start a company to do just that and make this information accessible, usable to really stimulate the private economy by building an intelligence engine around these private companies, to bring up the right types of companies that you are looking for. . Whether you are looking to acquire, invest, partner with these companies, we want to be your gateway for private companies, ultimately, ”said Bocskocsky.
The co-founders began their journey by focusing on meeting the needs of investors and private equity firms looking to invest by grouping small businesses into industry categories, like dentists or car washes, for example, as it is was the world they both came from. “But as we started to dig, we started to realize that the private business ecosystem is actually a much bigger issue than just the workflow of an investor, which is still a part of it. , but the way people think of private business is a much broader use case, says Bocskocsky
In addition to M&A deals, there were larger companies looking for partnerships and answers to the questions of who they should build distribution networks with? With whom should they build different types of alliances and strategic relationships?
“The larger question of who is aligned with how I think about the world made it even more interesting. I really want to find companies that do X, Y, Z and that’s a really tough question to answer with any of these existing sources. Legacy databases, for example, tend to have what I would call tabular information. A description in a few lines, maybe an industry with keywords, but it’s really not enough to dig deeper into these companies to really continue to peel that onion and identify the good companies that you should be spending your time with, ”explains Bocskocsky.
To do this, you need a lot of information using automated methods of collecting and processing that information, which is why the company is so focused on the application of machine learning and intelligence. artificial. “We’ve really invested in what we think is proprietary technology for dealing with these businesses, embracing the nuances of these businesses and trying to really understand what they’re doing. And when you think back to when we were trying to sell almost six years ago and what we see now is that the private business space in general has just warmed up considerably, ”says Bocskocsky.
Now, hedge funds are doing private market transactions. Family offices are starting to do direct transactions. Business development groups are increasingly involved in this type of medium-sized business. With these opportunities heating up, Grata sees herself as a catalyst for this momentum.
Today, the business is growing rapidly, according to Bocskocsky. “We were probably a company of around 15 people in 2020, we are around 50 people now. And in 2021 alone, we now have eight times our revenue for the search engine itself, so we’ve seen really drastic adoption in the market by adopting the product, ”Bocskocsky said. The company still attracts seed investment with the final round in April of this year for $ 6.3 million, bringing the total seed investment to nearly $ 10 million led by Bling Capital, with Touchdown Ventures, Flex Capital, Alumni Ventures and Complice.
Bocskocsky grew up in Westchester, New York, in what he calls a fairly traditional home. “I had a sister, a dog, a mother, a father, that sort of thing; and had always been interested in technology from an early age. I would call it in my genes. My grandfather worked on rockets, on the Apollo lunar module, and we’ve always had computers and technology in our home. And I think I was fortunate enough to be exposed to a lot of this type of technology very early on and I think that motivated my interest in it, which definitely focused on schooling and studying at home. school and continuing to invest in, which I think is one of the coolest things going on in our world right now, the advent of machine learning and NLP. And I’m very happy to be a part of this trend of turning something promising into a practical and applicable ability to solve real problems in the world, ”Bocskocsky said.
He would then graduate from Harvard with a degree in economics and computer science. After graduation, he worked briefly as a reinsurance analyst, then as an advanced deployment engineer for Palantir Technologies before starting his own consulting firm Gramercy360, before joining Raj to build Grata.
As for the future? Bocskocsky believes the private and middle market opportunity is a $ 15-20 billion market. “There isn’t really a private market company that is the de facto choice or the go-to solution for private markets or private companies. In the same way that Bloomberg provides information on what a public company does, we really want to be that view on private companies. I think we will be successful as an organization once people think of us as the norm for private companies. And this is something that I think we see the early stages of the snowball moving, but I think when we are fully operational it will be a big day for us as a company, ”concludes Bocskosky.