5 minutes with… Mike Muniz, Canoe Intelligence

The Drawdown (TDD): What does Canoe Intelligence do and how does it service private equity?

Mike Muniz (MM): Canoe Intelligence focuses on streamlining two areas within private capital markets. One is document management automation. We assist clients in retrieving documents from various sources, processing and integrating them into their ecosystems, tagging and renaming them, all without any human intervention.

Second, is digitising documents to extract key information, normalise and validate the data, then feed it into whichever accounting, reporting and analytics tools our clients use.

Our PE clients are LPs, GPs, fund of funds and administrators. The challenge is consistent across the PE spectrum. The distribution of data from GP to LP is very document intensive and predominantly PDF. As a result, firms have built large teams to produce and gather documents from their funds and portfolio companies, liaise with their investors, process all fund documents, and ultimately gather the data. Our platform effectively automates that digital transfer of information.

TDD: You launched in 2013 within private investment firm Portage Partners and subsequently spun out in 2017. Why did you decide to spin out and what is your relationship with Portage now?

MM: Portage Partners was founded in 2010 as a family office for a multi-strategy hedge fund manager. In 2013 it was transitioning from being a single entity to a multi-entity, non-discretionary investment platform for active and semi-retired investors.

Sam Klatt, the firm’s CIO, brought four developers together to build a technology to extract capital balances from partner capital account statements, normalise the information and feed it into the firm’s proprietary compliance and accounting systems. The technology essentially evolved into the backbone of the back- and middle-office of that organisation.

In 2017, Portage brought on Seth Brotman (Canoe’s president) to evaluate and commercialise the product to make it available to other firms. They hypothesised that since this technology scaled the business without having to hire large back- and middle-office teams, there was clearly something special to this product. They were right. Seth brought me on shortly after. We spun the technology out of Portage, incorporated Canoe and operated in stealth mode for about a year to further validate the product/market fit.

In late 2018, we brought Canoe to market commercially. Consultancy firm Canterbury Consulting was our first institutional client and since then we’ve focused on working with fund of funds, institutional investors, wealth managers, and asset servicers. A few clients and partners which have supported us include Lexington Partners, Hamilton Lane, Nasdaq, SEI, Prime Buchholz, Fiducient Advisors (formerly DiMeo Schneider).

Today, we’re approaching 100 clients. We received a series-A investment led by Hamilton Lane and Nasdaq Ventures in February 2020. And we hired Toby Bailey as vice president of sales, EMEA, in London in March 2021 as part of our EMEA expansion. We see Europe as the next area for significant growth for us.

TDD: You recently partnered with Holland Mountain to streamline reporting processes. How did the partnership come about?

MM: Partnerships are one of the key pillars of our growth strategy. We had been talking with the Holland Mountain team for over a year. It’s been great to make introductions and bounce ideas off them, leveraging their knowledge and understanding of the broader ecosystem.

The team was ramping up their recently released ATLAS product, taking it to market and rebranding, so that’s where we fit in perfectly. We have mutual clients who could benefit from a tighter product integration, so this partnership centres around those relationships. The idea is to connect our Canoe platform with ATLAS, enabling clients to feed data from Canoe into the ATLAS platform from which clients can then generate analytics, visualisations, and insights.

TDD: As technology is constantly evolving, what upgrade plans do you have for your software in the future?

MM: Our development and innovation have always been very client driven. We recently released a transformative workflow enhancement. First is Canoe Connect, which was released over the past two quarters and relieves LPs of collecting documents. Our platform automates the document retrieval and collection from various sources. Our clients only need to input their credentials and the system takes care of the rest.

When we first launched Canoe, we focused on tagging documents and extracting data from them. We’ve built Canoe Connect as a direct result of conversations with our growing client base who repeatedly said they couldn’t cope with managing massive spreadsheets and logging into numerous portals for their required output.

Second, we want to enable Canoe to be used more readily by the front office. When we initially launched, we were focused on accounting and back office operational data such as valuations, transactions, and performance. Many of our institutional clients have expressed they’d love their investment teams and research professionals to use Canoe to extract information related to fund financials and portfolio companies. As such, automated extraction of data from Quarterly Fund Financial Statements and Schedules of Investments is an enhancement we’re currently working on. It’s already being tested with private releases with some clients and we hope to make this officially available soon.

Ultimately, we’re not a reporting platform, so all of the related systems consuming fund data will synergise well with Canoe. Our focus is on extracting and feeding those platforms with data to power analytics and investment decisions.

TDD: What are your key focuses for the rest of 2021?

MM: We were fortunate to have had record growth last year and we already matched that growth in Q1 2021. We want to build and capitalise on that foundation as we expand the product. Part of this is creating a solid footprint in EMEA, and we’ve made our first steps in that journey having recently brought on a multinational fund of funds headquartered in the region. We see this relationship as a flagship engagement for Canoe in Europe and expect it will enable us to grow at the same pace and trajectory as our first few years in North America.

Our long-term vision is to transform the industry to provide and transfer data in a secure, transparent and automated way. Over the next five to 10 years, the biggest shift is likely to be how data will be transformed and transferred. We believe there’s an opportunity for Canoe to sit in the centre of the PE ecosystem and drive this change.