RapidRatings

Rapid Ratings International

Company type	Private
Industry	Financial services, Software as a service (SaaS)
Founded	1991
Founder	Dr. Patrick Caragata
Headquarters	New York City , United States
Area served	Global
Key people	James H. Gellert (CEO and Chairman), Douglas M. Cameron (Co-founder)
Products	Financial Health Ratings, Financial health analytics platform
Website	www.rapidratings.com

Rapid Ratings International is a U.S.-based SaaS company headquartered in New York City, specializing in financial health analytics for both public and private enterprises globally. Their platform provides Financial Health Ratings along with comprehensive reports designed to help organizations reduce financial risk, improve supply chain transparency, and perform ESG evaluations. Additionally, Rapid Ratings enables enhanced transparency by granting access to financial statements of private companies.

The company’s main office is located at 86 Chambers Street in New York City, complemented by additional locations in Boston (customer support), Dublin (technology center), and New Zealand (research and development). In 2020, the firm predicted that more than half of worldwide businesses would face elevated risk levels due to revenue losses triggered by the Covid-19 crisis.

History

The foundation of Rapid Ratings’ technology dates back to 1991 when economist Dr. Patrick Caragata created the Financial Health Rating system grounded in rigorous data analysis. In 2007, entrepreneurs James H. Gellert and Douglas M. Cameron relocated the company to the United States with a focus on broadening its market reach.

The company gained significant recognition following the 2008 financial crisis by highlighting weaknesses in traditional issuer-paid credit rating agencies. It successfully identified financial distress signals at major firms such as MF Global, Enron, WorldCom, and Bear Stearns well before their official credit downgrades.

In April 2016, Rapid Ratings obtained Series A financing from LLR Partners, a private equity firm, to accelerate growth and innovation across leadership, sales, marketing, customer service, and product development functions. LLR specializes in investing in middle-market companies within software and technology-enabled services sectors.

By September 2018, the company secured $30 million through Series B funding led by FTV Capital, a growth equity firm concentrating on enterprise technology investments. FTV partner Kyle Griswold joined Rapid Ratings’ board to aid strategic leadership and business scaling efforts.

Methodology

Rapid Ratings generates a Financial Health Rating (FHR), a numerical value ranging from 0 to 100 that reflects an organization’s overall financial condition. This rating is exclusively based on fundamental financial statement data without incorporating market data, analyst forecasts, or direct communication with issuers. The methodology employs over 70 efficiency ratios and organizes companies into 24 industry classifications to evaluate sector-specific risks.

The FHR offers a forward-looking assessment of financial stability over a 12-month horizon and applies equally to public and private companies via confidential client engagement. Over more than twenty years, approximately 90% of defaults have been detected within the High Risk and Very High-Risk categories. A 2011 academic study demonstrated that Rapid Ratings outperformed competitors by forecasting corporate failures more than two years ahead.

Their client base includes sectors such as financial investment, risk management, supply chain oversight, vendor management, third-party risk mitigation, and corporate credit risk administration.

Congressional involvement

James H. Gellert, CEO and chairman, has been actively involved in addressing competitive issues within the rating industry. He has testified six times before Congress and the SEC advocating for reforms in the rating sector while promoting Rapid Ratings’ Financial Health Ratings (FHRs).

MF Global failure

On February 1, 2012, RapidRatings provided testimony alongside S&P and Moody’s concerning the collapse of MF Global. In contrast to S&P and Moody’s, which upheld investment-grade ratings until just days before the bankruptcy, RapidRatings had identified MF Global as a high-risk entity for more than two years prior, assigning it an FHR score of 23 at the time of its filing.

NRSRO designation

RapidRatings has chosen not to pursue Nationally Recognized Statistical Rating Agency (NRSRO) status, citing concerns over heightened liability exposure, increased operational expenses, and the complexity of regulatory compliance. Furthermore, obtaining NRSRO recognition would necessitate revealing proprietary software that forms the foundation of its impartial rating methodology, potentially jeopardizing its intellectual property rights and competitive position.