AlphaSense Becomes New York’s Newest Unicorn With Latest Funding Round

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Francis Bacon is credited with using the phrase “knowledge is power” at the end of the 16e century. More than 400 years later, the expression is still very applicable. The advent of the Internet has exponentially increased the amount of information available both publicly and privately. AlphaSense is a market intelligence platform for businesses that uses NLP and AI to extract relevant information from over 10,000 leading business sources, including analyst research, transcripts, filings with from the SEC and news sources. The platform saves businesses countless hours and ensures they don’t run out of content that can influence the market. The company has built a strong presence within financial institutions, where the timely synthesis of information can translate into millions of dollars, but the platform is versatile enough to be used in any application that relies on critical information. The company works with over 3,500 clients, many of them from the SP 500, and the team has grown to over 1,000 employees since its inception in 2011.

Alley Watch met the CEO and founder of AlphaSense Jack Koko to learn more about the company, the company’s strategic plans, the latest round of funding, which amounts to $1.7 billion, and much more…

Who were your investors and how much did you raise?

We raised $225 million in a Series D funding round, led by the Growth Equity business within Goldman Sachs and world viking, preeminent investors who previously led our Series C last September. This round also includes a substantial investment in debt from BlackRock, the world’s largest asset manager.

Tell us about the product or service offered by AlphaSense.

AlphaSense is a market intelligence and research platform used by the world’s largest companies and financial institutions. Our proprietary AI-powered technology has helped professionals make smarter business decisions by providing insights from a vast universe of public and private content, including company filings, event transcripts , expert call transcripts, news, trade reviews and stock research.

Imagine having your own team of dedicated experts constantly sifting through and filtering information to provide you with the information that is particularly relevant to what you are working on. That’s basically what our AI and deep learning technology does: we have hundreds of algorithms that read every line of text and categorize the information, then match it in real time with what each user is looking for.

What inspired the launch of AlphaSense?

I started my career as an analyst at Morgan Stanley, which involved reviewing massive amounts of information and collecting data to help assess and evaluate major M&A deals and financings. In this role, I quickly realized how difficult it was to find key information and market trends at the speed, accuracy and reliability required; searching and even accessing large swathes of content had to be done manually, and as a result, it was truly impossible to capture every potentially impactful data point.

Years later, I met my co-founderRaj Neervannan, at Wharton. I was shocked to find that despite all the time that had passed, the research process and available tools had not changed; it was still incredibly difficult and manual to find information. Raj and I sought to solve this problem by developing a new type of search engine that leverages machine learning and natural language processing technology to allow professionals to reduce noise and easily extract information from thousands of sources and billions of data points.

How is AlphaSense different?

AlphaSense is the best platform of its kind due to our unique combination of user-friendliness, breadth of sources, and membership of major financial institutions that support and partner with us. Additionally, our proprietary AI and search technology is unrivaled: it uses deep learning and natural language processing to understand the semantic relationships between business concepts that typically elude digital detection. In other words, he is trained to understand the nuances and jargon of financial and business language, especially synonyms.

This, in turn, allows the search engine to find results among thousands of datasets and millions of documents, regardless of variations in human language. This is one of our key innovations, and something that continues to be a unique value proposition for our product.

What market is AlphaSense targeting and how big is it?

Our platform targets knowledge workers in a wide range of roles, including strategy, competitive intelligence, investor relations, business development, and financial analysis.

Our customer base of 3,500 companies includes the majority of the S&P 500, over 78% of the S&P 100, 97% of the Dow 50, 70% of the top asset management companies and banks, all of the top 20 pharmaceutical companies and the major companies in a wide variety of sectors such as energy, manufacturing, consumer goods and technology.

Our customer base of 3,500 companies includes the majority of the S&P 500, over 78% of the S&P 100, 97% of the Dow 50, 70% of the top asset management companies and banks, all of the top 20 pharmaceutical companies and the major companies in a wide variety of sectors such as energy, manufacturing, consumer goods and technology.

What is your business model?

We have a SaaS subscription model and offer both seat-based pricing for small teams and organizations, as well as department-wide and enterprise-wide options for larger organizations.

Are there any changes you are making to the business in anticipation of a recession?

Over the years, we have realized that our services are perhaps even more necessary when markets are changing. AlphaSense is able to help our customers “see through the fog” by having the right data points at their fingertips when making critical decisions. Plus, we dramatically amplify the efficiency of our users, and as a result, customers can do more with less – alleviating budget pressures and often generating more revenue. All of this makes our product even more essential in a changing market environment like this.

How was the funding process?

We are incredibly lucky that our investors have approached us with additional funding.

What are the biggest challenges you have faced when raising funds?

This time, the main challenge was deciding the right amount of capital to raise. We determined that it would actually be very useful to have a strategic reserve on hand when there is continuous change in the markets, as it can create invaluable opportunities down the road – opportunities that are easier to exploit when you have more funding than expected. you need for your core business.

This time, the main challenge was deciding the right amount of capital to raise. We determined that it would actually be very useful to have a strategic reserve on hand when there is continuous change in the markets, as it can create invaluable opportunities down the road – opportunities that are easier to exploit when you have more funding than expected. you need for your core business.

What factors about your business made your investors sign the check?

It mainly comes down to the fact that we are now a large-scale company with solid business fundamentals and growing rapidly, at an accelerating pace. This is due to the strength of our product, the size of the market opportunity, strong client demand, and a strong team and execution that have impressed our investors.

On top of that, our investors have also been impressed with the broad adoption we have gained in the enterprise market, while achieving strong growth in financial services. This widespread adoption signifies confidence in our product, which made it much easier for these investors to determine that we were a company they should support.

What milestones do you expect to achieve over the next six months?

After our recent acquisitions of Stream and Sentieo, we will focus on investing and scaling. This means expanding our content sets to provide stronger coverage across geographies and industries, as well as public and private enterprises, all with the goal of truly serving knowledge professionals in all types of businesses. . We will continue to double down on our AI technology which provides smarter and more timely information to our users.

Outside of the product, we will invest in marketing to increase awareness of our solutions, ensuring that the wider market knows about us and is able to take advantage of our technology.

What advice can you give to New York businesses that don’t have a fresh injection of capital into the bank?

Due to the current dynamics of the stock market and its ongoing uncertainty, be sure to focus on optimizing your business fundamentals. Differentiate yourself and make your story really easy for investors to understand, so it’s immediately apparent why you’re a great investment versus other opportunities. If you are at an advanced stage of growth, remember that crossover investors now have great deals in the public market, so make sure the investment in you is competitive with these alternatives. And in this market, of course, it’s really important to show that you’re capital efficient.

Where do you see the business going now in the short term?

Our future is full of possibilities. We sense a gradual shift from a specialized tool that gives our users an edge over the rest of the market to a world where FOMO takes over, and those without access to AlphaSense feel the risk of falling behind.

We have very high ambitions for the company; and with our recent funding, we now have the fuel to make them happen. At this point, it’s all about execution.

What is your favorite restaurant in town?

Current favourite: Locanda Verde in Tribeca.


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