Bootstrapping with Services at the Cusp of AI and FinTech: Vahe Andonians, Founder of Cognaize (Part 2)

Sramana Mitra: What revenue level did you reach with this?

Vahe Andonians: About $8 million. It was difficult. The 2009 to 2012 period was a difficult time for the area we were operating in.

Sramana Mitra: Your clients were the banks and financial service institutions?

Vahe Andonians: And the defaulters. If you look back, it was a very good experience. At that time, it was hard. I had a supportive wife. She’s very wise, so she helped me a lot.

Sramana Mitra: You sold this as well in 2015?

Vahe Andonians: I sold it to Moody’s. We were very strong in Germany. Moody’s has a very good suite of solutions for that space. I think they struggled with Germany and we were very strong in Germany. They basically bought the clients. I think they used some of our technologies. I moved on to a valuation company. It was literally doing valuations of about 50,000 assets on a daily basis with only three to four people in operations.

Sramana Mitra: Before we go to the valuation company, how much did you get for an $8 million company from Moody’s?

Vahe Andonians: In the company, there was a service that Moody’s couldn’t buy directly, so they needed to buy assets out of this company but not the whole company. It was in double digit millions. They bought the revenue of about $4 million, so it was double-digit millions. I had an investor who owned 50%.

Sramana Mitra: Your investor split the double-digit million and you went on to start this valuation company?

Vahe Andonians: Yes, actually I bought a company and grew it.

Sramana Mitra: For how much?

Vahe Andonians: $1 million. They were doing valuation but not in an efficient way. I reinvented the whole production line using lots of artificial intelligence for gathering the data and calibrating curves.

Sramana Mitra: Did you write all that AI?

Vahe Andonians: Yes. They were just four or five people.

Sramana Mitra: So you wrote all the AI?

Vahe Andonians: Me and a small core team.

Sramana Mitra: Who were the customers?

Vahe Andonians: Mostly banks. Then we gained a very big client which was Deutsche Central Bank. That kept both of the companies. When they purchased our services, it was hard to serve a central bank if you’re a small company.

There was a top project called CEPH. That really put us on the map. Now we’re doing prices of 50,000 to 60,000on a daily basis. The German central bank was disseminating the prices to the Common Euro Pricing Hub.

Sramana Mitra: What happened to that?

Vahe Andonians: Deloitte bought it.

Sramana Mitra: How many years did you do it?

Vahe Andonians: Three years only.

Sramana Mitra: How much did you sell it for?

Vahe Andonians: Double-digit millions. I had two General Managers there. He stayed at Deloitte. I left. I stayed there for six to seven months, which is the minimum term to stay there. I then moved on to what I’m doing right now.

This segment is part 2 in the series : Bootstrapping with Services at the Cusp of AI and FinTech: Vahe Andonians, Founder of Cognaize
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