250 or 60 to 4: Rogo

Happy Wednesday. Officially in June. Which also means that travel season has officially kicked off. Travel for me seems to just be 3 trips to Charleston over the next 3 months. Won’t complain though. 

nyways, this is the second version of the 250 or 60 to 4 newsletter. Working on the $60m level today, and shocker, it’s an AI company. 

If you missed what the 250/60/4 segment is, check out the original issue here.

Updated 250or60to4.com

$60 million

Company: rogo.ai

Description (from ChatGPT): Rogo is a New-York–based generative-AI platform that bills itself as “Wall Street’s first AI analyst.” Tailored for investment banks, private-equity firms, hedge funds, and other capital-markets players, it lets professionals ask plain-English questions (“Pull me precedent EV/EBITDA multiples for public SaaS comps” or “Draft a one-pager on TargetCo for Monday’s meeting”) and receives, SQL-backed data pulls, model-ready tables, prose summaries, or even complete pitch-book pages in seconds

Background & Thesis

I first discovered Rogo back in February 2024. We were still early in the wave of learning what AI startups were just a fad and which were really going to make a difference in the market. Rogo stood out to me specifically due to the problem they were solving. Wall Street makes money by either being faster or smarter than other firms. 

Citadel set out to build a high-frequency trading arm and now executes 25% of all US equity trades. Faster. Other firms use quant-first approaches and elaborate data streams to gain an edge. Smarter. 

(Quant firms and hedge funds don’t care about the same things a private equity or investment bank care about, but the same point here still holds)

Now of course, there is the third level we heard from the movie “Margin Call”, cheating, but we won’t focus on that. 

Rogo is now enabling private equity firms, investment banks, and even family offices to act faster and smarter with new, modern technology. They just raised a $50m Series B at a $350m valuation. I believe there is still a massive growth opportunity in front of them for a few reasons:

1. Increasing Efficiency = Retention

With Rogo, work gets done faster and, in most cases, better. This allows for investment banks and PE firms to move faster and quicker on deals. Based on early usage, Rogo saved analysts 10-15 hours a week. Across a team of 20 analysts, that’s a total time savings over over 10+ full days. As with traditional Saas, users don’t cancel products that increase efficiency and make jobs easier. The only way you lose these customers is to competitors or new internal systems. 

2. Expansive and Defensible PMF 

Nowadays, if you can find incredible product-market fit, speed is one of the many ways you can defend it. Since I discovered Rogo in early 2024, their product development velocity is on-par with some of the top product organizations in the world. They do this while signing massive contracts with some of the biggest firms in the world (GTCR, Tiger Global, Moelis, Nomura). Year over year, the company's revenue jumped 27x. 

3. Jaw Dropping Customer Experience (JDCE)

I recently learned about this principle from Neil Mehta’s Green Oaks Capital. A JDCE is a product that delivers on its promise so well that it results in a jaw dropping experience for the end consumer. As a product guy, I love this principle. Rogo, even though I personally have no access to the product, is building a product that has a high chance to deliver a JDCE to its customers. By integrating with a firm's data and allowing analysts to build custom agents, Rogo will act as a 24/7 analyst for firms. 

Risks 

With any company of this maturity, there are risks to the business model.

1. The product doesn’t deliver 

   • Simply put, this is the biggest problem with AI products today. You can demo and show your product all you want, but if the user has a bad first few experiences, their churn risk skyrockets dramatically. Think about the first time your friend used ChatGPT. Most people I know said “eh it’s alright, it doesn’t do xyz…”. Now, overtime they have come back and tried again, but for users who are paying a high price per contract, this experience has to live up to its promise consistently. With a $350m valuation, there is a shot they are doing something right. 

2. Competitors and internal systems take market 

   • My friend's law firm just hired a consultant to build an internal GPT system based on every internal document they have. This same firm could have approached a startup like Harvey, but decided they wanted to keep it in house. This is a problem when looking at large banks like JPM. They don’t have to buy an AI tool, they can hire an internal team to build it. 

I do want to add a note on the second risk I laid out above. Every Friday I get the Clouded Judgement newsletter from Jamin Ball. If you don't subscribe, I highly recommend it. With that said, last Friday Jamin talked about AI and moats. I think this excerpt is highly relevant so I am pasting it below:

Speed is the moat. Rogo can win by keeping up its speed and shipping relentlessly. With a team of industry specialists, and great founders they have the opportunity to have customers who love the product and build a great business. If I were following this company internally, I would look toward NRR in the end of 2025 and beginning of 2026.

Investment Note:

With this, if I had the fund or opportunity, I would allocate $60 million to Rogo in a secondary transaction. As I said above they recently just raised $50m at a $350m valuation, and because this is all hypothetical I am going to mark that $350m as my valuation because I can.

So, I am going to mark my hypothetical $60m investment at roughly a $650m valuation

In order to see how bad (or great) I do at these investments, we are going to track them on the 250or60to4.com website.

Song of the Week:

Got in an argument with a friend over what the best love song is. I’m 1000% biased by Crush by Dave Matthews Band is likely the best I’ve ever listened to. This version comes from the Central Park concert and is simply unbelievable.