Tegus Expert Network
Tegus is an expert network currently based in Chicago, where it relocated from San Francisco in 2018. It was started in 2016 by a former employee at Alphasights and a current employee at Investment Group Santa Barbara.
In addition to a standard expert network service, it offers a database of call transcripts reminiscent of Third Bridge‘s Forum product, and similar services offered by GLG and Guidepoint. These calls are to large part generated by Tegus customers, who get discounted rates in exchange for allowing their calls to be recorded, transcribed, and resold to Tegus subscribers. The CEO described the business model in a couple tweets early January 2021, shown below.
Tegus has a strong followership on "fintwit", where independent investors laud the company's accessibility and service level. Really nice vibes, and a testament to Tegus truly adding value in the hedge fund space (seemingly especially for smaller funds?).
Tegus prices subscriptions based on fund AuM, starting at $20k (per year, we assume). If both the client and the expert agree to have your calls published to all Tegus customers, you can pay on average $375/call.
In February 2021, Tegus' website states that the platform hosts 9,000 transcripts, with 500 new transcripts added every month.
These numbers are up from a stock of 4,000 transcripts and 300 new/month, in October 2019, 16 months earlier. The effective average is 312.5 transcripts added/month.
Now, not all calls will end up being transcribed and shared widely: both experts and clients may opt-out. If we assume that 30-70% of all calls on Tegus are transcribed, this would mean Tegus delivers 450-1,050 calls/month.
Tegus revenue estimate
Our best guess would place Tegus' revenues at $12m, blended revenues from expert calls and library subscriptions.
Expert calls: If the average price is $375 as stated by the CEO, Tegus would be making $2-5m from its expert calls, annualized. Most likely, however, Tegus charges a regular fee for calls that are not transcribed, and thus not monetized from subscription clients. Assuming those residual 30-70% of calls are priced at $1,000 would imply that Tegus' price-blended expert call revenues are $3-10m.
Tegus library: Let's assume 400 funds pay the starting price of $20k per year. That would mean $8m in annual subscription revenues. If true, that's an impressive monetization, as much as or more than the fees for Bloomberg, CapitalIQ, Factset and Refinitiv access (as stated in this article). Even if subscription fees are just half of the listed price, it still means that Tegus' subscription fees of $4m are roughly at par with its expert call fees.
We identified Tegus as a regional challenger in our review of the 2019 expert network market size. Regional challengers are separated from other smaller expert networks by merit of their growth and/or business model.