What influenced you and your husband to start Metechi?
I relocated to NYC with my family in 2014. After creating our new life in our new home, I wanted to take advantage of our NYC location and build our company. I decided to be self-employed for the first time in my career.
We identified a major problem in the financial syndication and participation market. While large banks and large institutional investors have their syndication desks relying on extensive relationships, the second tier banks and institutional investors have limited access to this market. After a year of research and creating our product's demo, we founded Metechi.
Metechi is a Bank-Centered Syndication and Participation Marketplace providing lenders instant access to CRE, NPL, and C&I loans originated by banks.
Where do you come up with the name Metechi for your company?
We were looking for a name that will have meaning without using the traditional words, like lending and finance, and, importantly, with an available .com domain. Metechi means participation in ancient Greek and that’s exactly what Metechi does.
You started Metechi two years ago, what are three points you wish you knew before starting a company?
There are much more than three points, but the most crucial for me was:
*A startup is a rollercoaster. Every day, and, sometimes, every hour, you feel different. The constant switching between "we are doing great" to "it's going to be a disaster" can take a minute. Be prepared for the ride.
*Hiring is the most challenging task. Building a strong professional team is your first priority, but it's costly, competitive and time-consuming.
*Tech is the heart of a startup. Even if you don't have a tech background, you must quickly learn how it works, and stay as close as you can to the tech team.
The D. E. Shaw group has invested in Metechi as part of its startup accelerator program. why did you decide to partner with D.E. Shaw?
The D. E. Shaw group has a vast network and superb reputation in the financial industry. We felt very fortunate to join the accelerator of one of the most successful and renowned Hedge Fund in the world. We had an office space inside D.E. Shaw and it was a unique and rewarding experience to be a small startup inside the hedge fund environment.
Currently, you have deals in New York, New Jersey, Los Angeles and, Florida. Do you see expanding internationally? Are there certain regulations in your sector that you need to be aware of expanding internationally?
Our goal is to grow the US marketplace first, so all sellers and all assets types are US-based. On the buy-side, we already have international banks and institutional investors. Metechi is not acting as a broker or an adviser. We focus on technology to allow the seller to directly find its buyers. We expect to start the international expansion in 2021. We don’t feel regulations would be a barrier for Metechi in the international expansion.
Where do you think the commercial loan industry will head in the next 12-18 months due to COVID 19?
We anticipate an aggressive distressed debt market in the next 12-18 months.
A continue decrease in the hotel, retail, and office, and probably in new constrictions. An increase in the cost of credit and very conservative terms for new origination.
The competition between banks and debt funds will continue to increase. Banks will have to find ways to leverage each other’s underwriting abilities and funding resources to gain back part of their market share.
Metechi provides banks and institutional investors access to commercial real estate loans; how have you seen the business change since COVID-19 hit and how are you looking to navigate the market right now?
We saw a complete stop in CRE deals in the first three weeks of COVID-19 closure. Banks didn’t underwrite new deals. They focused on evaluating old ones, and trying to manage their risk.
We have more than 150 banks on our marketplace, and many of them indicated that they anticipate a need to sell non-preforming loans (NPL). On the buy-side, we see a growing appetite for the same NPL loans. We are working hard now to facilitate the buy and sell of CRE and C&I NPLs.
Reach out to Keren on LinkedIn.
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