The use case and impact of AI has never been clearer thanks to AlphaSense, the AI-based search engine that can instantaneously pinpoint critical data and analyze every line of text within over 100 million documents. AlphaSense has a database consisting of tens of thousands of high-value pieces of content that include everything from WSJ research, SEC and global filings, to transcripts of earning calls and performances. This adaptive database allows clients to seamlessly upload their own internal documents, and it automatically organizes and indexes those documents. More than 1,000 enterprise customers, including 66% of the 50 largest investment firms, use AlphaSense to conduct market research.
AlleyWatch sat down with founder Jack Kokko about the company’s origin, future plans, and most recent round of funding, which brings the company’s total funding to $87.1M across four rounds.
Who were your investors and how much did you raise?
This was our Series B funding, led by Innovation Endeavors, founded by Eric Schmidt. Other existing investors also participated in this round, including Soros Fund Management, Tribeca Venture Partners, and Triangle Peak Partners, among others.
Tell us about the product or service that AlphaSense offers.
We provide an AI-based market intelligence search engine for more than 1,000 enterprise customers who include most of the top investment firms, banks, and corporations in the world. With AlphaSense, they’re able to find the critical data points, enabling them to make strategic decisions quickly and confidently, while mitigating the risk of missing impactful information.
What inspired you to start AlphaSense?
I started my career as an analyst at Morgan Stanley’s tech group, where I experienced how inefficient the manual process of acquiring information was. I spent countless hours reading and CTRL-F searching company documents and market research, and I still felt like I was missing half the information I needed to know. Fast forward 7 years, I was working on my MBA at Wharton and was shocked to see that no one solved this problem, so a fellow Wharton classmate and I decided to build a solution and launch AlphaSense.
How is AlphaSense different?
The difference between AlphaSense and the old way of doing things is night and day – very much like the process of finding information on the internet before and after search engines. There are three major ways that AlphaSense is different:
- The sophistication of our deep learning AI. It reads, understands, and organizes billions of data points – including every line of text within over 100 million documents – to help each user surface the most relevant and accurate information quickly and easily.
- The breadth of content and information we provide. We have aggregated tens of thousands of high value content and data sources within AlphaSense that include: Wall Street research, SEC and global filings, transcripts of earnings calls and conferences, press releases, public and private company information, newspapers and trade journals across all industries and geographies, and web-based content covering hard-to-track sources like health and energy regulators and central banks worldwide. Clients can also add their own internal content and it is automatically organized, indexed, and discovered in AlphaSense searches, alongside all our external sources.
- Our team. We’ve built a team with top AI talent from across the world, with two-thirds of our nearly 240 employees solely focused on product development. They are the reason we’ve been able to build the groundbreaking product that we have today.
What market does AlphaSense target and how big is it?
The addressable market is huge because any company that conducts market research to drive strategic decisions can use AlphaSense.
Our clients include the largest investment firms, banks, and corporations in the world. We currently have more than 1,000 enterprise customers- including more than 50% of the S&P 100 corporations and 66% of the 50 largest investment firms.
Who do you consider to be your main competitors?
We are really creating our own market. The alternative to AlphaSense is the old, manual way of collecting market intelligence across lots of fragmented sources. Before AlphaSense, our users would have to infer which source might have the information needed, then either place a phone call to a provider or log into each information provider’s system, conduct multiple basic searches to figure out if the information is there, then CTRL-F within individual documents one keyword at a time. AlphaSense now replaces all of this with a single intelligent search that captures all relevant information across all of these sources and brings back just the relevant data points for the user.
What’s your business model?
We’re a SaaS business. Our product is sold based on annual and multi-year subscriptions that are structured according to the business needs of our clients.
What was the funding process like?
It was an intensive process and very different from our prior round. Now that we are at a scale-up stage, there were lots of new types of late-stage, pre-IPO type investors keen on investing in the great scale-up story that we have.
What are the biggest challenges that you faced while raising capital?
The challenge was finding the right growth stage investors who deeply understand AI and share our excitement to double down on the ambitious technology and product vision that we have, besides just investing in scaling the commercial side of the business. With Innovation Endeavors, it was immediately clear that they were a great combination of a growth-stage investor with the strong tech acumen and a shared vision that we were looking for.
What factors about your business led your investors to write the check?
Given our late-stage growth profile, everyone cared about key SaaS metrics that indicate a strong business model and unit economics that ultimately make the company a great business that is attractive for public markets down the road.
Additionally, Innovation Endeavors – with the help of leading Stanford researchers- performed deep, AI due-diligence, which proved that we have a major, technological edge that allows us to deliver highly differentiated technology and product capabilities. Along with that, a lot of our customer gave Innovation Endeavors really strong, positive feedback, which I believe led them to write such a large check.
Additionally, Innovation Endeavors – with the help of leading Stanford researchers- performed deep, AI due-diligence, which proved that we have a major, technological edge that allows us to deliver highly differentiated technology and product capabilities. Along with that, a lot of our customer gave Innovation Endeavors really strong, positive feedback, which I believe led them to write such a large check.
What are the milestones you plan to achieve in the next six months?
With the money in the bank, a lot of the key milestones are now about scaling the business. We are heavily focused on recruiting the best people out there for roles in product, technology, sales, marketing, and customer support. Even with aggressive hiring targets, one thing we will never compromise on is the quality bar, which we have managed to keep very high. I like to think of our team as a sports team gunning to win the Super Bowl, in that you need the best of the best players to win at that level, while also picking people that work together as a diverse but cohesive team, having fun together on the way.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
It’s a great time to be raising money as a New York-based company. Even the Silicon Valley-based investors that used to never leave the Valley are now frequently coming to New York. So do your research carefully to pick the right investor profile you are going after and cast a wide net.
Where do you see the company going now over the near term?
It’s really about managing our rapid growth. We had barely moved into our new full-floor HQ offices in Union Square and within a few months, we already committed to taking over the floor adjacent to us, just to accommodate our accelerating growth. It’s a fun stage but also makes me pinch myself occasionally as a reminder that this is really happening. It is really exciting to see how our vision is materializing on taking this technology to help knowledge professionals in companies across the world and helping those companies make better decisions more quickly and confidently, helping to ensure that they succeed and win in their respective businesses.
What’s your favorite restaurant in the city?
Tough question because there are many. But the one I end up going to most frequently is my kids’ favorite Italian restaurant, Gigino’s in Tribeca.
