Arjun Sethi exudes the confidence of someone who not only possesses insider knowledge but also understands the power of perceived assurance. When he confidently states over Zoom, “In five years, I’ll have 50% of the world’s private data at my fingertips, making it impossible for others to compete,” his conviction echoes the wisdom of Warren Buffett sharing market insights.
As a co-founder of Tribe Capital, Sethi discusses Termina, a new subscription-based AI software platform for "quantitative diligence" that Tribe has recently launched. He claims it can enhance investment outcomes for any investor willing to join. However, this claim raises pressing questions: if Termina has such significant advantages, why is Tribe providing other firms with tools to compete more effectively? Additionally, why should investors trust Termina, especially given that it processes their proprietary data to improve its services?
Founded just six months ago, Termina soft-launched last month with two innovative products. The first is a dashboard designed to enable investors to swiftly assess a company's health by comparing it against data from Termina's exclusive dataset, enriched with the clients' data. The second product helps investors analyze external factors, including anticipated market shifts. “It’s like giving you the power of 1,000 associates,” Sethi explains.
While he remains tight-lipped about the identities of Termina’s initial clients, he mentions they comprise pension funds, sovereign funds, and private equity firms, broadly defined as a “discreet group of capital deployment players.”
Sethi expresses enthusiasm when discussing Termina's potential. One key advantage, he notes, is access to transactional data from approximately 1,500 companies, which Termina has incorporated into major third-party large language models (LLMs), including one developed internally to enhance investors’ benchmarking capabilities.
To utilize this tool, Termina customers provide their raw data. “For example, a private equity firm might input its data for M&A analysis, and the same holds true for any VC firm,” Sethi says. The software generates comparative datasets of firms across various stages, positioning Termina as the “true Bloomberg of private markets.”
Skeptics may question the security of entrusting sensitive data to Termina, particularly given its connections to Tribe Capital. However, Sethi brushes aside these concerns, asserting that Tribe focuses on seed to Series C investments seeking venture-like returns, while Termina empowers investors across all asset classes to effectively analyze software companies at any stage. He emphasizes that “Termina and Tribe are separate entities; strict contractual and ethical boundaries keep them distinct.”
Having previously sold MessageMe to Yahoo and worked alongside VC Chamath Palihapitiya at Social Capital before founding Tribe, Sethi believes his established reputation is crucial for promoting Termina’s credibility. “Part of earning trust from other investors is built over time,” he explains.
Only time will reveal the true impact of Termina’s close ties to Tribe, which holds a stake in the startup. While a long-standing team provides advantages—as seen with Sethi, who transitioned from Tribe's CEO to chairman and chief investment officer to prioritize Termina—the startup also includes familiar faces like Alex Chee, who not only co-founded MessageMe and Social Capital with Sethi but also serves as Termina’s operations leader.
However, some challenges linger. Tribe, founded only six years ago, has yet to establish a solid track record despite amassing $1.6 billion in assets under management. While it saw success in crypto investments, outcomes for many other investments remain uncertain, underscoring the limitations of quantitative analysis. Companies like Carta and Bolt have faced criticism, raising questions about their long-term viability.
Additionally, Termina clients are not bound to exclusive data-sharing agreements, creating the risk that a competing platform could potentially outshine Termina.
Sethi remains undeterred by such challenges. “The foundational reason we exist and why clients collaborate with us is that we provide the best data and product available. We don't hold any specific patents; instead, our methods are trade secrets. Our tool doesn’t just improve workflows; it transforms them by being a thousand times better,” he asserts.
Regarding Tribe's trajectory, Sethi has even grander aspirations. “As a single venture firm, my impact was limited. As a company, I can achieve so much more.”
[Update: This story has been amended to reflect that Alex Chee stepped down from his role as Tribe Capital’s chief product officer in October to focus on Termina.]
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