Internal and external uncertainties are increasing, and the period called the startup heat season continues endlessly. In the case of early-stage startups, it is said that they attract initial investment based on possibilities such as business performance, technology, and organizational structure, but in the case of startups that are preparing for Phase B after Series A, they are being driven into a situation where it is possible to attract investment by showing profit generation and management capabilities, which are the essence of a company, such as sales.
This isn't just a problem for the startup industry. There is a limit to financing through the financial sector because financial information that can evaluate companies is limited in the case of non-external audit firms that are less than a certain size and that apply SME accounting standards, even if they have left the startup stage. The problem is that more than 95% of domestic for-profit corporations, including startups, are non-external audit firms without disclosure obligations.
Antock has built an extensive database and is carrying out various commercialization using it.
As a result, these non-external auditing firms have no choice but to accept credit ratings based on limited financial data from financial sectors such as banks in the event of a funding issue. Based on this standard, most of them cannot surpass the “B” to “BB” grade. From the perspective of companies belonging to non-external audit firms, even if there are various factors that can appeal to growth other than financial data, there was no point in the past because there was no way to evaluate them one by one, that is, a reliable alternative credit evaluation model.
Recently, however, things have changed. Examples of developing alternative credit evaluation models using non-financial data, mainly in the fintech industry, began to emerge. Among them, public data is based on a database that has been built well over a long period of time RFM analysisThe alternative credit evaluation system “PULSE (PULSE)”, which applied it, has succeeded in further segmenting companies with “B to BB” credit ratings and is attracting attention from the financial sector.
* RFM analysis: An analysis method that classifies based on recency (recency), frequency (frequency), and monetary (scale)
'Antock', a fintech startup in its 9th year that developed it, is now realising its long-cherished goals as a technology holding company based on these achievements. As a result, Tech42 met with Vice CEO Park Young-joon, the co-founder of Antock, to hear about the story related to the development of a differentiated data-based alternative credit evaluation system and plans to expand the field in a spin-off style through technology transfer.
Collecting fragmented data to resolve information asymmetry in the capital market
Park Young-joon, Vice President of Antock. Vice President Park studied business strategy at Boston University in the US and gained experience as a key member of a local startup.
Since starting Antock with his older brother, CEO Park Jae-joon, he has been exploring various business directions for Antock as an activist who matches up with the strategist-type CEO Park. (Photo: Tech 42)
Vice President Park Young-joon studied business strategy and management information systems at Korea University's Graduate School of Business after attending Boston University in the US. After graduation, I was in charge of sales at an American marketing company. I worked with passion, and those efforts paid off. After that, he received a proposal from the Chicago-based ad tech startup 'Freenters' and joined to oversee the business in the eastern United States. As such, he worked in an American startup for over 2 years and put a lot of effort into expanding his external appearance and achieved modest results. However, the US was no exception to the big and small problems faced by startups.
While trying to solve the problem, he realized in hindsight that he had a health problem. As a sergeant who has completed the Panmunjom Joint Security Area (JSA) Security Battalion, a red light was turned on for his usual health. I needed long-term treatment, and I had no choice but to sort everything out and choose a trip to Korea. The story brought up by his older brother, CEO Park Jae-joon, to his brother, who had taken a break for a while, was suddenly 'Let's start a business'. Vice President Park, who shared the story of the past, continued saying, “I already knew very well from my experience in the US that it was not easy to start up a business, but I decided that the possibility was high because it was my brother's suggestion.”
“My first interest in my brother's proposal was a software-centered business model. I really felt that a hardware-linked business through an American startup was not easy. I also believed in that insight because it was a fintech business conceived by my brother, who graduated with an MBA from Columbia University in the US and was in charge of strategic consulting for financial institutions at global accounting firms Ernst & Young ((EY) Financial Consulting Division (FSO)) and French consulting firm CVA. I thought there might be a good reason to abandon a guaranteed future and start a business. Looking back now, I can say that fortunately, my judgment was correct (laughs).”
Antock, which was started by a strategist style brother and an activist style brother, started as a business model providing a friendly listed company information service for individual investors in the early stages of the business. The mission also includes a combination of “Ant (ant)” and “Stock (Stock),” which refer to individual investors. Antock's business model evolved over and over again, expanding the scope of information provision to samples of privately held, small and medium-sized enterprises, and startup companies, and discovered the value of data and the possibility of services utilizing it in this process.
Since then, Antock has built the 'Hubble Database', a big data infrastructure that automatically obtains the source data of companies, and has successively developed 'Antock MRI', a unique AI (Artificial Intelligence) algorithm library that can creatively analyze it again. It has completed a one-stop optimization engine that internalizes all steps from data collection to processing, analysis, and inspection. Vice President Park talked about Antock's mission and explained the process.
Since its inception, Antock has built the 'Hubble Database', a big data infrastructure that recognizes the value of data and automatically secures the source data of the company.
“At the time of our founding, our mission was to 'solve the problem of information asymmetry pervasive in the capital market'. To achieve this, several steps were required, and the first step was in the area of data collection. What we paid attention to was that 96% of the corporate corporations in Korea are all small and medium-sized enterprises without disclosure obligations. In terms of data, their information was fragmented and managed in a fragmented manner. We worked on building a huge data infrastructure with the goal of computerizing this domestic corporate ecosystem, and that is the 'Hubble Database' named after the Space Telescope.”
Complete automated data construction and analysis, and prove technical skills with pulses
Antock MRI consists of a total of 10 unique diagnostic algorithms, which enable evaluation, management diagnosis, and performance prediction tailored to various types of companies.
Data standardized through the Hubble database is again used for automated enterprise diagnosis and evaluation from a new perspective through 'Antock MRI'. Vice President Park explains that Antock MRI consists of a total of 10 unique diagnostic algorithms, and that it is possible to evaluate, make management diagnoses, and predict performance according to various types of companies. As a result, Antock's challenge, which began with the goal of analyzing corporate financial data, evolved into a method of collecting, processing, and combining and utilizing non-financial data on the other side. A typical example is the SME Alternative Credit Evaluation System (PULSE, PULSE), which Antock has recently been focusing on. Vice President Park continued, “Pulse is one of the 10 libraries included in Antock MRI.”
“Healthier people have a regular and clear pulse (PULSE) beat. We meant that even such a healthy company's data is generated periodically and prolifically. As a result of actual inductive observation, healthy companies generate regular and strong public data based on the progress of business execution. Conversely, this means that it is also possible to predict the possibility of failure. In other words, Pulse is an alternative credit evaluation model specific to small and medium-sized enterprises that predicts the actual possibility of insolvency by analyzing public data generation patterns. As of January of this year, we have identified about 1.4 million corporate data. We are standardizing and analyzing 300 types of public data in 12 major areas for these companies. We analyze patents, website status, and even the number of media reports. In fact, Pulse uses data common to all companies, from listed companies to startups, while deriving a single piece of data and analyzing it three-dimensionally. We don't use any financial information in the process. Nevertheless, it has proven its sophistication by analyzing vast amounts of data from multiple angles.”
The function of this pulse has also been proven through PoC (Proof of Concept) with the Finance Committee as well as major banks and credit card companies. Through this, financial firms have increased their pioneering approach to reducing credit risk. Even from the perspective of a company, it is possible to raise funds at a lower interest rate than before by raising credit ratings through non-financial data evaluation.
As a technology collective and technology holding company, Antock will expand its domain through spin-off
Summarizing Vice President Park's words, Antock's core business model ultimately boils down to “data.” A database was built, an analysis algorithm was developed, and there are various techniques and solutions derived from it. Vice President Park continued, “Simply put, Antock's business is selling data.”
“After all, the results obtained by building a database and analyzing algorithms, such as credit ratings, can also be called data. After all, our business model is data sales, but it can be said that it is analyzed and provided through the Antock MRI library according to the needs of the demand agency. It was in 2020 that sales through data sales began to be generated in this way. Since then, it has doubled every year.”
Pulse, which belongs to one of the Antock MRI libraries, is an alternative credit evaluation model for small and medium-sized businesses, and Antock is planning to upgrade it and spin it off.
Vice President Park then stated, “Antock is a collection of technical verification.” Through this, the future that Antock aims for is “to transcend borders and exist everywhere corporate data is needed.” Vice President Park said, “When thinking about the upcoming future, the Korean market is nothing more than a pilot for Antock,” and also revealed plans to “export Antock's data and analysis infrastructure to urban countries with a high public data openness index in the medium to long term.”
For Antock, this year can be said to be the time to put the first button on such a growth roadmap. It's about creating business models in various domains through spin-off through technology transfer. At the end of the interview, Vice President Park said, “Antock aims to support technology,” and talked about the various possibilities that Antock will create.
“Aiming to be a technology supporter means continuing to create new perspectives with these data and ideas. Once a new perspective is created, we will continue to carry out PoC, and we plan to establish a corporation by spinning off once the business results are recognized and confirmed in the process. That first runner becomes a pulse. In addition, Antock plans to establish a CB (credit rating) company within the next 2 years. I've already applied for the designation of an innovative financial service. We are also developing a business model specialized in data analysis from a risk perspective and data analysis that predicts other success paths. It targets investors including VC (venture capital) companies. Additionally, this year we are examining various possibilities by applying generative AI to our database.”
