- Causality Link, an AI-powered research platform, closed a $5 million Series A at the peak the coronavirus pandemic.
- Horizon s.a., a French family office, led the round, signing papers on March 9th, one of the most volatile trading days in the US market.
- Pierre Haren, Causality Link’s cofounder and CEO, told Business Insider that having an investor that was a former entrepreneur, as opposed to just a pure venture capitalist, helped ensure the deal got done.
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Pierre Haren is no stranger to getting deals done in volatile situations.
Haren was in the midst of closing the purchase of a software company he had spent the better half of two decades building when the 2008 financial crisis hit. Less than two months after IBM announced its intention to buy Haren’s company ILOG, Lehman Brothers went bankrupt, sending markets into disarray.
Still, Haren was able to get the deal done, closing the acquisition in January 2009.
So as the financial markets once again went into a tailspin, this time due to the spread of the coronavirus, Haren kept cool despite the fact that he had a deal for his new company tentatively in place.
After roughly nine months of discussions and in-person meetings in December 2019 and January 2020, Haren had provisionally secured $5 million for the Series A of the artificial intelligence-powered research platform he co-founded in 2016, Causality Link.
And while a verbal agreement was reached with Horizon s.a., a French family office, in February, it wasn’t until March 9th, a day when circuit breakers were triggered in the US stock market due to massive market declines, that legal documents were set to be signed.
But despite the markets experiencing record volatility, Horizon stood by the investment, signing the papers and wiring the money to Causality Link the following day. The investors, Haren told Business Insider, demonstrated “nerves of steel.”
He credited Horizon’s commitment to the fact its owner is an entrepreneur — Henri Seydoux, the CEO of the French company Parrot SA — which gives them a unique perspective compared to that of a traditional venture capital firm.
“I think when you deal with entrepreneurs, they are a little more resilient than VCs,” Haren said. “I think that VCs estimate that until a deal is signed they can renege on their verbal promises, while usually entrepreneurs are not like that. I think if it had been a VC, they would have said, ‘Ah, let’s think again.'”
Causality Link’s $5 million Series A came at critical time.
While the company wasn’t at risk of going under — Haren said he was committed to self-funding the startup if needed — it did have a huge opportunity at hand. As investors and analysts try to make heads or tails of the continued impact the coronavirus is having on markets, Causality Link’s platform can comb through millions of text-based sources to provide insights and analysis.
In short order, the startup was able to create a dashboard specifically focused on COVID-19’s impact across multiple sectors. Haren said customers are already looking beyond the initial impact to understand what to expect next.
One example Haren gave was figuring out why propane prices remained so strong despite the oil market being down across the board. The reason? Many people had decamped to secondary homes away from cities, which needed propane.
“What everybody wants is a differentiated understanding of every sector,” he added.
As for future investments, Haren said he isn’t completely opposed to taking funding from VCs. Instead, the experience opened his eyes to family offices being a viable alternative to venture funding.
“The true entrepreneurs have a very different angle on life and on understanding the true reasons why companies will be successful that a small number of VCs have, but not all of them,” Haren said.
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