Estimize Raises $1.2M Funding, Launches Mergerize

Updated from 8:00 a.m. to reflect funding round is Series A-1, not B and clarifications on actual funding.

NEW YORK (TheStreet) -- Estimize, the New York-based crowdsourcing site for earnings and revenue estimates, has taken its different approach to Wall Street estimates to a whole new ballgame: mergers and acquisitions. It has done this while raising an additional $1.2 million in funding, coming mostly from previous investors in the company.

In an telephone interview last week with CEO and founder Leigh Drogen (disclosure: Drogen and I used to work together at StockTwits), he discussed the launch of Mergerize, a platform in which people can guess whether a company will get bought or buy another company, and at what price. "It's all the same set up as Estimize, but it's more about if Company X will buy Company Y for X dollars," Drogen noted. Not only does the platform feature more than 4,800 public companies, but it features private ones and start-ups as well.

Drogen noted the database was built off Crunchbase's application programming interface (API), which has an extensive list of private companies, most of them in the technology field. Crunchbase is a division of TechCrunch, a tech-focused Web site owned by AOL (AOL).

Not only does Mergerize give Estimize the chance to expand its business, but it caters to a largely different customer base than traditional analysts. Drogen noted Mergerize, which went live last week, caters toward quants and event-driven traders or those who focus their portfolios on specific events such as a merger. It also caters to corporations, in that corporations can see what's expected of them. "What should I do, what does the market expect from me?" Drogen stated, as being some of the reasons why corporations would look at his site.

Judging off the past success of Estimize, it appears Mergerize may have a fighting chance. In the blog post announcing Mergerize, Drogen noted the company has more than 4,000 contributing analysts, who provide estimates for free, covering more than 1,000 stocks. The Estimize Consensus has proven more accurate than traditional sell-side Wall Street analysts 65% of the time, though that's down from 69% of the time, according to the company's Web site.

While it's still early for Mergerize, Drogen believes it will live up to the success of Estimize. "Mergerize.com is pretty raw right now having only taken a week and does not include many of the bells and whistles of Estimize.com, but the core of the experience is there," Drogen wrote in the post. "Over time as we see the platform grow more resources will be put towards it." So far, a total of 38 predictions have been made, focusing on 26 predicted targets and 28 potential acquirers, a far cry from the more than 17,000 estimates made on Estimize within the past three months.

Estimize was named to Forbes' list of the nine hottest start-ups in 2013, with Drogen being nominated for the Forbes 30 Under 30 list. In addition, Fast Company named Estimize as one of the 50 most innovative companies in the world this year.

Separately, Drogen announced Estimize had raised an additional $1.2 million in a Series A-1 funding round, with most of it coming from existing investors Contour Venture Partners and Longworth Venture Partners. It was done at a higher valuation than the original Series A funding, which was also for $1.2 million.

Included in this funding round are the former CEO of Credit Suisse (CS), Brian Finn, as well as one of the co-founders of online delivery company Seamless, as well as a director of research at Susquehanna.

-- Written by Chris Ciaccia in New York

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