Why We Invested in PitaTech
Reach out to Brett Calhoun, Managing Director & GP at Redbud VC, at brett@redbud.vc to learn about Redbud, and subscribe to our newsletter here.
💡 PitaTech is building AI-driven software that streamlines commercial loan diligence and unlocks siloed public data. PitaTech’s first product will be an intelligent UCC search engine for debt financing diligence.
Investment Premise
Redbud views the future of commercial finance as a decentralized environment with accessible data driving decision-making, and financing assets made as simple as clicking a button. Today, 36% of state UCC databases are unsearchable, and 57% of the $900B+ in equipment is financed through blanket liens (i.e., all of the company’s assets, not just the equipment financed). Due to this, conducting a thorough UCC search can take weeks. To begin this arduous process, borrowers must seek out lenders to finance the equipment. These lenders typically have loan officers who conduct preliminary UCC diligence, and even this process is complicated. A typical workflow takes place over a few weeks, leading to high downstream costs to the company receiving the financing. The typical workflow is below:
i) The loan officers send the loan to their legal counsel.
ii) The legal counsel outsources UCC diligence to a third party.
iii) The third party conducts a thorough search and sends a report to the legal counsel.
iv) The legal counsel will then manually conduct a thorough search through all UCC documents to identify any potential conflicts in collateral.
v) The loan officer receives a report outlining any potential conflicts.
vi) Legal expenses are then billed to the company receiving financing.
Lost you after step one, right?
As Redbud’s first venture studio company, the idea for PitaTech stemmed from EquipmentShare’s pains. PitaTech’s solution leverages machine learning to extract every data point from the millions of UCCs into a searchable dashboard. Loan officers and others can use the data for much more than just diligence too (e.g., industry trends, underwriting, etc.).
Redbud recruited Caleb Heinzman, an AI/ML-focused Computer Science Ph.D. candidate at the University of Missouri who brings a deep technical background and a unique ability to build and sell. He left his Ph.D. program with one year left to build PitaTech, and the intense curiosity and discipline that helped him thrive in academia have helped him to stay focused on the north star of the business while continuously expanding his knowledge as an entrepreneur.
Redbud isn’t incubating PitaTech alone; the leading legal tech venture capital fund, The LegalTech Fund, and the largest construction tech company and purchaser of heavy equipment, EquipmentShare, have joined forces to nurture and grow the company.
Reach out to Brett Calhoun, Managing Director & GP at Redbud VC, at brett@redbud.vc to learn about Redbud, and subscribe to our newsletter here.
