5 minutes with… Wissem Souissi, Diligend

The Drawdown (TDD): What is Diligend and how does it help the private equity industry?

Wissem Souissi (WS): Diligend is a software company. Our mission is to help all the actors in private equity improve the use of data and communications to drive value. We do this by streamlining the exchange of information, because better collaboration means more transparency.

On the LP side, Diligend helps them to spend more time on analysis rather than administrative tasks. These include collecting more and better quality data as well as speeding up their analysis process when it comes to selecting or monitoring GPs.

For GPs, we help to speed up their process of responding to investor requests as well as internal collaborations. This enables them to submit data and share that information with existing or potential LPs, satisfying LPs increasing transparency needs.

TDD: Does the platform integrate with other PE software platforms?

WS: Our platform does integrate with existing software platforms that are part of GPs’ or LPs’ tech stacks. We don’t want to replace those systems, but rather replace the exchange of Microsoft Excel and Word documents, for example, which are transferred via email.

We designed our product to be as open and flexible as possible, using an open architecture structure and strong APIs to ensure we can integrate with other third party systems. Our clients constantly use the Microsoft Suite so we need to be able to integrate with those, as well as other platforms such as CRM and portfolio monitoring systems as well as data rooms.

Investment firms have been exchanging important and confidential information for years using email and the Microsoft Suite. While that is labour intensive, it also comes with risk. Diligend aims to mitigate that risk while speeding up the process. When huge amounts of data sit in files, there’s not a lot you can do with it. But if the data is centralised and digitised, you can slice, dice and extract incredible insights from it.

TDD: You recently received new funding from VCs and private investors. Can you tell me more about what the fresh capital will be used for?

WS: The funding will be used for two things. First, it will enable us to invest further in technology. We want to progress fast with technology and we have lots of ideas to use artificial intelligence (AI), natural language processing (NLP), PDF scraping and so on.

Second is geographical expansion. We are growing in some markets such as the US and APAC, so we need more resources to cover the need for our solutions in those areas.

The funding will ultimately enable us to maintain client satisfaction as we ensure we continue to listen to them and what they need, and have the right people in place to meet the demands.

TDD: You announced partnerships last year with Preqin and eVestment - are there any further partnerships on the horizon?

WS: A lot of our partnerships revolve around data providers, but we’ve noticed a newer demand for KYC tools and integrations with portfolio management systems so we’re definitely considering those.

We’re currently in discussions with some of the global leaders in this space to see how we can potentially work together to provide a more efficient, smoother experience for our clients.

TDD: What are the general challenges or concerns PE firms are having when it comes to due diligence?

WS: There are always two challenges. First, is transparency and how much GPs would like to share. This has been ongoing but I do think it’s changing. Using a direct exchange technology like Diligend gives GPs more confidence to share more data. They understand our platform is secure and their data will only be shared with specific LPs they allow, compared with commercial databases. In those, information is much more freely available to whoever, or data rooms where data is locked within PDF files.

The second concern is around types of data. Before, we mainly used to see portfolio data requests. Nowadays, LPs are requesting more data around operations, ESG and diversity and inclusion. They want to understand how GPs’ portfolio companies are in line with ESG guidelines. US pension funds, for example, have additional pressures from their boards who are responsible for ensuring D&I is aligned with the portfolio.

TDD: What further enhancements do you have planned for the product in the future?

WS: We want to ensure our technology is flexible enough to adapt to any existing ways GPs might be collecting and managing their increasing amounts of data, across the management company, the fund as well as the portfolio. All while making processes simple and efficient. We prefer to listen to the market and track trends to do this and there are also lots of regulatory changes taking place. So it’s essential we can help clients to adjust and adapt to those as and when needed.

We’re currently looking at PDF scraping and how we can help clients to extract data from their PDF files, because so many documents are still exchanged in this format. We’re also looking at how to use NLP and AI to help clients to automatically detect trends and changes through data.

One huge focus for us right now is to provide more features for GPs. There’s so much demand for technology to better facilitate internal collaboration between teams and the best practices around that. We’d love to help emerging managers, for example, to have insights or guidance to better answer their LP requests.

We’d also love to go beyond due diligence to portfolio monitoring as a sort of one-stop shop for all these processes, so we’re already working on an initial pipeline management project for this.