The Pandemic Looms
In March 2020, the COVID lockdown had just begun and I was entering the most uncertain environment of my adult life along with the rest of the country. It was the end of “business as usual”; our in-person DC trip to hold our final due diligence meeting with Sayari’s Founders (a risk intelligence startup) became virtual out of caution.
Diligencing with an impending recession
Our conversations with the founders centered around their market, their teams, and their plans for the weeks and months ahead. At the time, we predicted a massive recession and flagged: “Selling into a Cost Center during a Recession.”. Given the circumstances, we spent extra time assessing the team and their ability to lead in a crisis – we watched this in real-time as their investment deal was hanging in the air, measuring how they communicated and handled tough questions around go-forward uncertainty.
We made the baseline assumption that our country would endure a long-term recession before bouncing back from COVID. The team had the courage and conviction to make it clear that they were willing to run the business with just the two of them if that’s what it took to make it through the emerging pandemic—I was impressed at this level of sacrifice.
Our due diligence process was holistic and thorough despite the rapid emergence of the pandemic. We centered our final conviction on the Founders: Could they lead in this moment? Are they committed? Are they coachable? These are always the questions, but the circumstances placed an even higher premium on our assessment.
We also determined that bad actors would continue taking advantage of opportunities regardless of the pandemic: there would always be a need for their solution. With a viable product with market fit and founders with the gusto to be successful, by the end of March 2020 we decided to make our first investment.
Amazingly, in the case of this company, not only was our risk assessment not an issue, but the team continued to scale and adapt to unknowns to arrive at a place just four short years later in which strategic investment by one of the world’s top private equity firms (TPG) would come to pass!
Skip forward to Today
Since its inception in 2015, Sayari has been at the forefront of integrating global corporate and supply chain data, offering unparalleled insights for risk management. The platform’s credibility is evident, with its widespread adoption by global regulators, law enforcement, and over 100 of the world’s largest companies. The explosive growth and consecutive accolades from Deloitte and Inc. Magazine highlight Sayari’s impact and potential.
Investing in Sayari at this time was a good reminder of how valuable a talented CFO can be to Founders and Investors, and that in any market conditions, there is always a business model and strategy that can be successful. Despite lockdowns and WFH, they were able to increase their sales funnel in Financial Services and elsewhere. Q2 of 2020 was challenging for all startups, but the team had hired a dynamic and thoughtful CFO who maintained outstanding investor communications throughout. They applied for the PPP loan, immediately cut non-mission critical costs, and focused on cash conservation right out of the gates. Despite lockdowns and the switch to WFH, they were able to increase their sales funnel in Financial Services and elsewhere.
TFX was fortunate to invest multiple times, assist with a few customer introductions, and help the team navigate a few government agencies. As always this achievement is 100% attributable to the Sayari team, their tireless efforts, and their commitment to the mission.
The TPG investment of $228m and expertise will further extend their ascent, and we’re proud to continue the journey with Farley, Ben, and the team while they accelerate their growth in both public and private sectors.
I’m personally grateful that in a moment of doubt we stayed unemotional, trusted our due diligence framework, and moved forward with conviction. Good lesson to reinforce as we move forward with Fund III in 2024.