PactFi, the New York-based Fintech focused on solving the pain points of the $1trillion private credit market, announces the close of its first institutional VC fundraise to streamline deal workflows in the $1 trillion private credit market. Terms of the financing were not disclosed.
PactFi, which is founded and run by women of color, is working with a select group of business partners on its first product, a workflow and data structuring platform which captures transaction data and helps deal managers with product distribution and investment management.
PactFi’s first focus area is the middle market private credit space. In the last 5-10 years, middle market private credit grew 20% annually to reach $7 trillion assets under management (AUM), while public asset AUM only grew 5%-10% over the same period, notes PactFi co-founder and CEO Emma Zhang, who previously specialized in credit trading, origination and structuring at Deutsche Bank.
“Industry players are stuck utilizing outdated, manual processes and siloed legacy systems. I’ve experienced firsthand the inefficiency of working without proper digital infrastructure, so one of the core principles of the PactFi platform is to balance customization with simplicity, security and ease,” Zhang said. Our solution enables teams to execute on the deals they want with the terms they want, all without sacrificing their data capture, process integrity or user experience.”
Private capital markets are now becoming increasingly important funding sources for businesses across America. In the middle market, bank disintermediation sits around 50% and is on the rise, a meaning that private capital providers are shouldering the burden of providing capital to medium-sized businesses in America. This sector is one of the largest employers in the country, so the healthy functioning of these markets is incredibly important.
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“The middle market space has traditionally stayed out of the spotlight as it generally operates on a private basis, but as the industry grows at astonishing rates, the demand for better technology grows in tandem,” said Alexa Halcomb, PactFi co-founder and CTO.
Halcomb joined Zhang from Reorg Research, a distressed debt data and analysis company, where she helped to build the platform as the senior engineering lead. “I’ve spent extensive time making sense of unstructured data in covenants, financial statements and SEC or legal filings, which is a cumbersome and difficult process. With PactFi, we can create frameworks and standards that will enable good data quality and help industry unlock the potential of the data they have but aren’t able to access at present,” said Halcomb.
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