This article originally appeared on Medium: link to the original post here.
Komodo is automating the municipal bond evaluation process, bringing greater transparency and analytic capability to a $4 trillion industry.
Founders: Joel Perdzock, Matt Dulac
Origin Story: Komodo was born out of a frustration trying to find municipal spend data on pothole repairs in Pittsburgh. As it turns out, robust municipal data is rarely available and if it is, it is incredibly difficult to find — the same problem that municipal analysts face every day. That led to months of industry research and interviews, speaking with hundreds of municipal professionals to learn all about the industry’s pain points. After graduating with his MBA from Carnegie Mellon University, Joel founded Komodo and teamed up with Matt, a former corporate lawyer, to help solve those problems.
Problem: The industry is full of new economic, environmental, and social risks — take current events for example, where things like COVID-19, widespread social unrest, and climate change all affect the health and quality of a municipality’s revenue stream: us, the taxpayers. Finding and quantifying relevant data is a real challenge, and the process is highly manual. That means more time spent Google-ing for data that may not exist, and more money wasted analyzing information that leads to dead ends. We want to digitize analysts’ workflows, making it cheaper, quicker, and easier to understand the credit risk and relative value of a portfolio, leading to transparent decisions by investors and better access to capital by municipalities.
Solution: Komodo is a digital analytics platform that integrates into the existing workflow of analysts, portfolio managers, and investment advisors, and allows its users to create internal, value-based credit models using our aggregated data. Komodo gives investment professionals customizable tools to create an automated rating system based on a bond’s relative value — think FICO credit scores for cities and counties. Automated credit analysis means investors can spend more time analyzing and investing in higher yield bonds.
Status: We are providing a small, selective group of financial firms and analysts with our early credit reports and modeling tools, and working with them to continue to improve our product. We recently accepted investment from CMU and IW, and are participating in two accelerator programs this summer, with the goal of raising additional capital and hiring new team members in the coming months. And although we’re all working from home, we get together with our whole team over Zoom at least once a week during lunch to lighten the mood and discuss anything except the business (with varying levels of success), just to keep us all grounded!
Grand Vision: By providing better data and analysis we hope to increase liquidity and lower issuance costs for borrowers. This is important because it would enable municipalities to fund more projects and build their communities by removing frictions created in the issuance and analysis processes. Ultimately, the inefficiencies are paid for by the taxpayers, and we would love to be the go-to platform for pricing, monitoring, and even underwriting new issuances.
Founder Fun Facts: Joel and Matt first met in true Pittsburgh fashion — at an event at Kennywood Park where they signed up to ride the Skycoaster together.