A group led by Lewis Lee, the co-founder of Spokane-based intellectual property law firm Lee & Hayes PC, has acquired technology assets from Chicago-based global insurance giant Aon PLC and launched Moat Metrics Inc.

Moat Metrics is a software-as-a-service company that, among other features, provides investors and entities with insights into the value of companies through its proprietary artificial intelligence platform, Innovation Alpha. That platform reveals companies’ innovation behaviors, enabling investors and companies to make better investment decisions.

"The vast majority of the value in the S&P 500 is intangible assets,” says Richard Denenny, president and CFO of Moat Metrics who served as president and CFO of Lee & Hayes until 2023. “Intellectual property is the asset class, created through innovation.”

The creation of Moat Metrics hinged on the acquisition of the technology assets from Aon, including the Innovation Alpha platform, says Denenny, who declines to disclose the terms of the transaction.

“Despite intellectual property’s enormous value and ability to provide insights into enterprise value and strategic direction for a company, it’s not a very well understood asset class,” Denenny says. "IP is the window into a company’s soul. (Innovation Alpha) exposes that soul and allows investors to make better investment decisions by understanding demonstrated innovation behavior.”

Moat Metrics has immense growth potential, Denenny explains. He goes as far as saying he wants the company to be Spokane’s next technology-based publicly-traded company, though he notes that Moat Metrics is not near that achievement at this stage.

“This is a huge market. We have solved a problem in a very unique way,” Denenny says. “You can slice and dice our market different ways, but we fit in the $7 billion-plus alternative data market that’s growing at a compounded annual growth rate north of 50%. Our immediately addressable market right now around private company data for investment decisions is well north of a billion-dollar market and growing at an unbelievable rate.”

The recent acquisition isn't the first time Aon has done business involving Lee, who is now CEO of Moat Metrics.

About six years ago, Aon acquired 601West, a former business unit of Lee & Hayes. 601West became Aon IP Solutions, and 10 Lee & Hayes employees, including Lee, left the Spokane law firm for the new division of Aon.

Lee became CEO of Aon IP Solutions after the 601West acquisition. Denenny joined Aon IP Solutions in 2023.

“The 601West acquisition was to allow (Aon) into the business of insuring and backing IP-based assets as sort of a collateral or a class of instrument that could be used in a broader financial picture,” says Sam Fleming, chief technology officer of Moat Metrics and former CTO of Aon IP Solutions, where he worked since 2018.

Prior to his time at Aon IP Solutions, Fleming worked at Spokane software company Imprezzio Inc.

Speaking of his time with Aon IP Solutions, Fleming says he and the team there spent the last five years building a lot of the technology behind the Innovation Alpha platform.

"We’ve gotten a pretty substantial AI platform with north of probably $50 million, $60 million invested in the platform," Fleming says. "Now we’re taking that outside of Aon as an independent entity.”

Moat Metrics will generate revenue through a classic subscription-based license model, Denenny says.

Innovation Alpha is the application that clients would license from Moat Metrics.

“We launched with three foundational clients, but we’re in week one of licensing the underlying software, and we’re just starting those sales efforts now for the license of Innovation Alpha,” Denenny says, adding that the company’s initial sales efforts have been overwhelmingly positive.

The technology being deployed by Moat Metrics is the first of its kind, Denenny and Fleming contend.

“When you look at a patent, what defines coverage and scope is the actual language in the claim itself,” Denenny says. “To really understand what it covers and what market and everything else on it, you need to get to the underlying language, and there’s 66 billion-ish data points that we’ve been able to ingest through our platform. Then we’re able to map that to markets and products. No one’s been able to do that before.”

Moat Metrics looks at innovation strategies to understand who and what a company is, versus just analyzing their public statements or industry designations.

“You can understand sort of where a company is going, benchmark that against other companies that are in the same space, and understand, are they overvalued, or are they undervalued?” Denenny says.

The importance of using AI-powered tools to make better informed investment decisions is growing at a rapid pace, Fleming adds.

“Five years from now, if you’re not using AI tools in your investment strategies ... there’ll be no excuse,” says Fleming. “It would be like doing a car loan and not doing a credit check."

Spokane is an ideal home for a company like Moat Metrics, Denenny says.

“Spokane has demonstrated expertise around natural language processing, machine learning," says Denenny. "It also has, on a per-capita basis, maybe more IP experts than any community in the region.”

Denenny, who was born and raised in Spokane, adds that having the company based here is important for the community. He says that he’s seen fewer and fewer companies headquartered here and he wants Moat Metrics to be part of the reversal of that trend.

“It’s great when companies build out a satellite office here. They’re great jobs and I don’t want to minimize that. But it is an entirely different thing for a community when you’re headquartered there,” Denenny says. “Having headquartered companies in Spokane is an unbelievably important thing.”

Moat Metrics currently has 28 employees, 21 of whom are based in Spokane, including Denenny and Fleming. Lee is based in the Bellevue, Washington, area.

The company’s employees all work remotely, although Denenny expects they may open an office in the future.