Francis Bacon is credited with using the phrase “knowledge is power” in the late 16th century. 400+ years later, the phrase is still very applicable. The advent internet of the internet has exponentially increased the amount of information available both publicly and privately. AlphaSense is a market intelligence platform for corporations that uses NLP and AI to extract relevant insights from over 10,000 premium business sources that include analyst research, transcripts, SEC filings, and news sources. The platform saves businesses countless hours and ensures they are not missing potentially market-moving content. 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 mission-critical information. The company works with 3500+ customers, including a large portion of the SP 500, and the team has scaled to 1000+ employees since its founding in 2011.
AlleyWatch caught up with AlphaSense CEO and Founder Jack Kokko to learn more about the business, the company’s strategic plans, latest round of funding, which comes at a $1.7B valuation, and much, much more…
Who were your investors and how much did you raise?
We raised $225M in a Series D round, led by the Growth Equity business within Goldman Sachs and Viking Global, preeminent investors who previously led our Series C last September. This round also includes a substantial debt investment from BlackRock, the world’s largest asset manager.
Tell us about the product or service that AlphaSense offers.
AlphaSense is a market intelligence and search platform used by the world’s leading companies and financial institutions. Our proprietary AI-based technology has helped professionals make smarter business decisions by delivering insights from an extensive universe of public and private content—including company filings, event transcripts, expert call transcripts, news, trade journals, and equity research.
Imagine having your own dedicated team of experts constantly scouring and filtering information to provide you with the insights that are uniquely relevant to what you are working on. This is essentially what our AI and Deep Learning technology does: we have hundreds of algorithms that are reading every line of text and categorizing information, and then matching it in real-time to what each user is looking for.
What inspired the start of AlphaSense?
I started my career as a Morgan Stanley analyst, which was all about poring over massive amounts of information and gathering data to help assess and value large M&A deals and financings. In that role, I quickly realized how challenging it was to find key insights and market trends at the speed, precision, and reliability that was required; searching across, and even accessing, large swaths of content had to be done manually and as a result, it was truly impossible to capture every data point that could be impactful.
Years later, I met my cofounder, Raj Neervannan, at Wharton. I was shocked to realize that despite all the time that had passed, the research process and tools available hadn’t 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 enable professionals to cut through the noise and easily extract insights from thousands of sources and billions of data points.
How is AlphaSense different?
AlphaSense is the best platform of its kind because of our unique combination of user-friendliness, breadth of sources – and buy-in from the top financial institutions that are backing us and partnering with us. Plus, our proprietary AI and search tech is second-to-none—it uses deep learning and natural language processing to understand semantic relationships between business concepts that ordinarily evade digital detection. In other words, it’s trained to understand the nuances and jargon of financial and business language, especially synonyms.
That, in turn, allows the search engine to find results across thousands of datasets and millions of documents, regardless of the variations in human language. This is one of our core innovations, and something that continues to be a key unique value proposition for our product.
What market does AlphaSense target and how big is it?
Our platform appeals to knowledge workers across a wide range of roles including strategy, competitive intelligence, investor relations, corporate 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 firms and banks, all of the top 20 pharma companies, and leading companies in wide-ranging industries such as energy, industrials, 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 firms and banks, all of the top 20 pharma companies, and leading companies in wide-ranging industries such as energy, industrials, consumer goods, and technology.
What’s your business model?
We have a SaaS subscription model and offer both seat-based pricing for smaller teams and organizations, as well as department- 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’ve realized that our services are needed perhaps, even more, when markets are in flux; AlphaSense is able to help our clients “see through the fog” by having the right data points at their fingertips when making critical decisions. Also, we greatly amplify the efficiency of our users, and as a result, clients are able to do more with less – which alleviates any budget pressures and often drives more revenue. All that makes our product even more essential in a shifting market environment like this one.
What was the funding process like?
We’re incredibly lucky that our investors approached us in offering additional funding.
What are the biggest challenges that you faced while raising capital?
This time, the main challenge was to decide the right amount of capital to raise. We determined that a strategic reserve would actually be very valuable to have on hand when there is an ongoing shift in the markets, as that can create invaluable opportunities down the road – opportunities that are easier to capitalize on when you have more funding than you expect to need for your core business.
This time, the main challenge was to decide the right amount of capital to raise. We determined that a strategic reserve would actually be very valuable to have on hand when there is an ongoing shift in the markets, as that can create invaluable opportunities down the road – opportunities that are easier to capitalize on when you have more funding than you expect to need for your core business.
What factors about your business led your investors to write the check?
Primarily it comes down to the fact that we’re a significantly scaled business now with strong business fundamentals and we’re growing fast, at an accelerating pace. This is because of the strength of our product, the size of the market opportunity, strong demand from customers, as well as a strong team and execution that impressed our investors.
On top of that, our investors were also impressed by the broad market adoption we’ve gained within the broad corporate market, while also 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 get behind.
What are the milestones you plan to achieve in the next six months?
After our recent acquisitions of Stream and Sentieo, the focus for us will be on investing and scaling. That means expanding our content sets to provide stronger coverage across geographies and industries, as well as public and private companies—all with the aim to truly serve knowledge professionals across all types of businesses. We’ll continue to double down on our AI technology that is serving smarter and timelier insights to our users.
Outside of product, we’ll invest in marketing to grow the awareness of our solutions, ensuring that the market-at-large knows us and is able to leverage our technology.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Because of the current equity market dynamics and its ongoing uncertainty, make sure you’re focused on optimizing your business fundamentals. Differentiate yourself and make your story really easy to understand for investors, so it’s immediately obvious why you are a great investment as opposed to other opportunities. If you are at a late stage of growth, remember that crossover investors now have great bargains in the public market, so make sure investing in you is competitive with those alternatives. And in this market, of course, it’s really important to show you are being capital-efficient.
Where do you see the company going now over the near term?
Our future is full of possibilities. We are sensing a gradual shift from being a specialized tool that gives our users an edge over the rest of the market to a world where FOMO takes over, and those that don’t have access to AlphaSense feel the risk of falling behind.
We have very high ambitions for the business; and with our recent financing, we now have the fuel to go realize them. At this point, it’s all about execution.
What’s your favorite restaurant in the city?
Current favorite: Locanda Verde in Tribeca.
