Recent Facts: Cortera announced its intent to “shaking up the commercial credit information industry with a refreshing and needed approach to help business and finance professionals at organizations of every size”.    Cortera says it is using an innovative approach to create low cost information and intelligence derived from user generated data (trade), public sector data and a peer to peer tool for credit professionals to share data.  Its pricing model is substantially lower than of the competition (US$2.50 – US$5.00 per report).

The National Association of Wholesalers – Distributors (NAW) has entered into a partnership with Cortera and advised its members that Cortera is “the leading source for the freshest and most accurate information about NAW customers”.

Cortera raised an undisclosed amount of money from insiders and most notably additional funding from TomorrowVentures, a firm backed by Google’s Chairman Eric Schmidt.

Cortera (formerly is a relatively small credit information company.  It had four rounds of recapitalization and many management changes.   In 2006 the company was taken over by its current CEO Jim Swift (former EVP of Seisint, a risk management company which was acquired by LexisNexis).  Based on recent statements Swift feels confident that Cortera has now sufficient data assets to make an impact:  5,000 data sources.  Revenues are said to be less than US$ 20 million; the company employs approximately 300 people and has 1,000 customers.

Likely Implications:  Game changers or market disrupters?

The availability of public sector data combined with the willingness of the credit management community to share trade data, advanced analytics, plus new technologies and processes which deliver crowd-sourced and user-generated content has lowered the barriers of entry.  In addition to Cortera, The Kreller Group has recently announced the introduction of risk profiles.

Outsell Inc. commented in a recent Outsell Insights that “tomorrow has arrived for Cortera” as a potential game changer drawing in new investors such as TomorrowVentures.  Nevertheless taking on three major commercial credit information companies at the same time seems to be a tall order.   Since it appears that the battle will be fought mainly on price, Cortera will be a disruptive force rather than a game changer.  Credit managers generally welcome competition, but major users tend to judge a supplier of credit information not just on price alone:  The criteria used are quality (freshness/accuracy), work flow and price; usually in that order.   The likely potential outcome of these disruptive new low cost players will be a more aggressive reaction by the three largest competitors propelling the commercial credit information industry in the USA to new heights of responsiveness.  

Source:  Outsell Inc., Cortera, NAW, Dow Jones Venture Wire

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