Dodolio, a custom investment research procurement platform, is now looking to find a strategic buyer to purchase the assets of its business, after spending the past few years building out its proprietary technology platform and proving its business model.
Founded in April 2011 and headquartered in Needham, Massachusetts, Dodilio was fully launched in April 2013. Dodilio is a research procurement platform, bringing providers and consumers of custom research together to make it more accessible and affordable for both parties. Dodilio’s competitive advantage comes down to process and technology – being able to deliver research better, faster and at a lower cost.
The Dodilio platform enables research consumers to make a request for a specific custom research project to numerous research providers that have expertise in delivering the needed type of work. Dodilio’s competitive auction platform makes providers compete on both competence and price for every RFP promoting both price transparency and process efficiency. Dodilio’s traditional customers are typically larger scale purchasers of custom research. The Company is focused on three customer end markets:
- Financial Institutions – both public and private investors that need custom investment research including capital markets professionals in need of transaction due diligence;
- Corporations – companies requiring market research solutions which span business development, corporate marketing, and investor relations; and,
- Service Firms – includes consulting firms and universities.
Since Dodilio went operational in 2013, they have consummated close to 40 transactions on their platform averaging close to $20,000 per deal. The company makes money in two ways, including charging a base level subscription to research purchasers to gain access to their database of providers; and a commission based on the value of the custom research project purchased over the platform.
According to Dodolio management, the global investment research and data marketplace totals approximately $20 bln per year. However, Dodolio is focused on serving the marketplace for custom research mandates – which they estimate totals close to $2.0 bln per year globally.
Dodolio believes that the demand for custom research is growing rapidly. However, they see significant barriers for consumers to engage custom research providers, including:
- Providers are hard to find;
- Quality is uncertain;
- Pricing is difficult to assess; and,
- Acquiring custom research lacks anonymity.
Today, custom research is purchased in one of three primary ways: (i) an in-house analyst runs a one-off, infrequent process; (2) the request is outsourced to a specific large scale incumbent research provider (e.g., Gartner, Forrester); or (3) the request is procured from an expensive middle-man, often a large consulting firm.
Dodilio sees three primary types of competitors serving consumers who want custom research. Full-service consulting firms sell a total solution, aggregating expertise from diversified providers, i.e. not direct. Second, research platforms exist which distribute syndicated research, but they lack customization. Third, expert networks offer custom solutions, but the projects are advisory based versus project based and are sourced by moonlighters and independent members, rather than institutional grade research providers.
Dodolio believes that their proprietary technology platform and their database of custom research providers solves many of the issues potential clients currently face.
Assets To Be Sold
As mentioned previously, Dodolio plans to sell all the assets necessary to operate and expand its business on a going forward basis. This includes:
Software – Dodilio has created a system where an automated request for proposal (“RFP”) enables clients to efficient and transparent share requirements for potential projects and research firms can share their specific capabilities which line up with the project. In addition, the Dodilio platform aggregates bids and cost-sharing opportunities transparently; and, matches research provider responses to enable the selection of the best provider. All code for the system will be provided as part of the sale.
Patent – Dodolio has applied for a relevant patent regarding its system. This patent is for a computer implemented system and method for conducting and disseminating financial research products and services among users in an investment community including a social network module configured to store electronic user files for each of the users. Generates a network user interface configured to enable communication among the users via the users’ client computers in real time and/or asynchronously. U.S. App. No. 13/563,900, Filed on August 1, 2012, Status: Pending
Database – Critical to the Dodilio platform is its database of 4,000+ research providers, all of which are tagged and classified based on domain expertise. Participating providers include expert networks (e.g., Maven and Primary Insights), broker-dealers (e.g., UBS, J.P. Morgan, Merriman, Wunderlich), data providers (e.g., ITG, Discern), and other institutional-grade independent research providers (e.g., HSI, Deloitte). The database will be provided as part of the sale.
Management Team – Dodilio’s principals are integral to the operations and technology of the platform and are available to operate the virtual procurement exchange on behalf of the acquiring party or provide related consulting services.
Rationale for Sale
For the past year, Dodolio management has been looking to raise capital to fund the scaling of its business. And while many investors were interested in the firm’s business model, platform, and competitive advantage, most felt the firm lacked one key asset required for an exchange like Dodolio to become successful – and that is access to a large universe of potential research consumers.
Consequently, in recent months, Dodolio management made the difficult decision to consider trying to sell the assets of the business to a buyer who might have the right distribution. A few of these types of firms include:
- Trading firm / Agency broker – Any firm that provided execution services to institutional investors but who did not already have their own in-house research services.
- Market Data Vendor – Any firm like Bloomberg, Thomson Reuters, or FactSet that was in the business of selling content to the institutional investor community.
- Social Media / Technology Vendor – Any firm like LinkedIn, Yahoo, Google, Seeking Alpha or SumZero which was in the business of building and serving a community and who might benefit from being able to commercialize these relationships by selling professional content to them.
- Startup FinTech Company – Any firm that was interested in adding investment content to their business and providing a way to make money from this content..
- Global Investor – Any large global investor like Bridgewater, Fortress, or Fidelity who might find the Dodolio platform useful to manage the internal process of finding and procuring external research among their staff of investment professionals.
Next Steps for Interested Parties
As part of this effort to sell the business, Dodilio has hired business advisor, Sherwood Partners, Inc. to identify interested parties and to manage the sales process. If you are interested in learning more about the possibility of acquiring Dodolio’s assets, contact:
Mr. Kumar Singla
Sherwood Partners, Inc.
555 Fifth Ave., 14th Floor
New York, New York 10017