Google has shown the way when it comes to understanding and appreciating the importance of a good search engine for unlocking all the information you can find on the Internet. The next iteration of this was vertical search: providing tools to delve into very specific information silos for specific applications.
And in the wave of solution companies, a New York-based company called AlphaSense, which focuses on providing search tools for market analysis and business intelligence, has already raised $ 225 million. His estimate with this D-Series round – $ 1.7 billion after the money – is twice as high as in 2021 (when he raised $ 180 million in the C-Series round). This speaks not only to the growth of AlphaSense, but also to the ability to address more gaps in vertical corporate demand.
The financing is managed jointly by two investors, the capital growth business in Goldman Sachs Asset Management (Goldman Sachs) and Viking Global Investors. Goldman Sachs is both a financial and a strategic investor here, Finnish co-founder and CEO Jaako (Coco) told me: the company’s analysts use the platform to research and publish their own reports. The $ 225 figure also includes “significant” debt from BlackRock, although AlphaSense did not specify the exact amount.
When we last covered the company in 2019 – a $ 50 million Series B round – AlphaSense had 1,000 customers. This number has already grown to 3,500, with the number of customers increasing by 110% in 2021 in the last year, with the range of typical uses including S&P 100 companies (75% are customers); Dow 50 (97%); and large asset management companies and banks (70% of all in the US, the company claims, are consumers); together with those working in the energy, industry, consumer goods and technology sectors.
The ARR is currently $ 100 million, although Kokko tells me that AlphaSense is not yet profitable (nor does it choose to be).
Covid-19, if nothing else, actually served as a boost to the startup’s growth. Typical users of the platform – business analysts, strategists, financial planners, investors and others who regularly buy and use market reports and competitive intelligence – not only still had to do their job, but were less likely to meet in person. in person meetings to discuss research with colleagues and clients to receive and provide information.
On top of that, given the lack of visibility of what is around the corner in terms of the pandemic and its impact, research, insights and just more information have been sought after more than ever. In both scenarios, useful search engines for both access and dissemination of research became equivalent to field work.
The gap that AlphaSense identifies is one that is not uncommon in every piece of information, but how successfully it has been overcome remains a difficult part. As for business information, Coco said the problem is that it comes from a huge number of sources and in many different formats, most often transmitted in stories.
“We focus on finding unstructured information and providing it with structure,” he said. Web search intelligence is a problem that is constantly fueled by machine learning algorithms. The more people search on Google, the better Google becomes. “But our system needs to understand the language and find the right information without the benefits and insights of millions of web searches. None of this exists for personal information. “
In other words, our world – or at least the information related to it – is our oyster on the Internet and search engines are the tool to erase it. But the same does not apply to unstructured information when it is essentially personal and not uploaded to the Internet.
Beyond the main demand, given the nature of why people search in the first place in AlphaSense, the company’s second product layer comes in the form of how it presents information.
Its algorithms are based on AI and are focused on understanding natural language both to extract the meaning and purpose of search queries, but also to analyze the study itself.
So while AlphaSense negotiates deals with companies to provide links to and search for their research, Kokko explained that it also takes some of this information into its own hands to present it in ways that absorb multiple sources into -compressed search results.
This is especially important when you keep in mind that when you have multiple estimates of the size of the cloud-based security services market, for example, you can estimate different estimates and what they do or don’t include, as you’ll often see different numbers and different KPIs. from various analysts,
“We add more structure to unstructured data, but we also organize it by providing heat maps, for example, to show who is more or less optimistic about a particular data point,” he said. “If a user asks for an addressable market size, we can provide an answer that looks at and takes all this data.”
Another area where AlphaSense wants to do more, Coco said, is internal company search to help businesses better organize and access their own data. So while its current products could potentially be compared to Wolfram Alpha or LexisNexis, the domestic search product would potentially bring it closer to those of Elastic or Algolia.
Overall, the opportunities speak for the rationale behind this investment, Dr. Goldman Sachs Growth Holger Staude told TechCrunch, especially at a time when so many other companies are finding it challenging to raise money.
“AlphaSense is a large-scale business growing at an accelerating pace, which we attribute to the strength of the product and the team, as well as the size of market opportunities. “Despite reversing the broader technology market, we are excited to support high-quality companies with strong fundamental unit economies, such as AlphaSense,” he said. “AlphaSense is building a search and intelligence platform for a wide range of users, not just financial services companies. We believe that access to curated business information will remain a focus for businesses throughout the cycle. AlphaSense is in a good position to seize this opportunity. ”