Friday, December 12, 2008

ZepFrog to aggregate investor newsletters

By Galen Moore

A Boston-founded and -funded company is set to emerge from stealth mode on Monday with a web-based service that aggregates financial analysts’ newsletters for private investors.

For about an $800 annual subscription, ZepInvest will provide searchable access to a list of 75 newsletters that will include George Putnam’s The Turnaround Letter, Jim Lowell’s Fidelity Sector Investor and Bernie Schaeffer’s Option Advisor.

Individual subscriptions to these 75 newsletters would cost $30,000 per year in total, said 21-year-old Michael Rodov, who began working on the idea while a sophomore at Boston University, and relocated to Manhattan to be near the investment analyst community.

ZepInvest is unlike other sites that offer multiple newsletter subscriptions, said Wayland-based angel investor Robert Pemberton, who chairs the board of ZepFrog Corp., the New York-based company launching the ZepInvest service.

“What we put together was an approach that kept track of how long people looked at each publication,” he said. Publishers are paid based on how much time subscribers spend using their content, meaning the company has the flexibility to add subscribers and publishers.

ZepInvest’s target market is the 50 million private investors in the U.S., said Rodov, adding that he believes the startup can capture “a significant percentage” of that market.

Pemberton, who in 2002 sold Infinium, an enterprise back office software company he founded in 1980, is one of 10 investors who contributed $1.25 million to ZepFrog’s launch, according to federal documents filed in October. Eighty percent of its investor base is in the Boston area, Rodov said.

The company’s initial team of four senior-level employees includes CEO Rodov, co-founder and CTO Mikhail Gurevich and Daniel Hallac, vice president of product and customer experience.

As a BU freshman, Rodov founded an e-commerce business called Magmaniac, which he sold to a private investor, he said. Gurevich co-founded a Y Combinator-funded web fraud auditing service called clickfacts.com. Daniel Hallac was formerly head of electronic business at HSBC Private Bank.

The ZepInvest idea relies on the bundling theory used by cable television providers. “When you take two valuable pieces of content and put them together and subscribe them, you have more people wanting to subscribe and wanting to pay more money,” Rodov said.