AlphaSense, an analytics and business intelligence search engine, finds $225 million at a $1.7 billion valuation – TechCrunch

Google has shown the way when it comes to helping the world understand and appreciate the importance of a good search engine to unlock all the information you can find on the internet. The next iteration of that is vertical search: providing tools to drill into repositories of very specific information for specific uses.

And in a wave of companies building solutions for that, one New York-based company called AlphaSense, which focuses on providing search engines to query market analysis and business information, has now raised $225 million. Its valuation with this Series D round — $1.7 billion after the money — is more than double that of 2021 (when it raised $180 million in a Series C round). This not only speaks to the growth of AlphaSense, but also an opportunity to address more gaps in vertical business search.

The funding is being co-led by two investors, the Growth Equity business of Goldman Sachs Asset Management (Goldman Sachs) and Viking Global Investors. Goldman Sachs is both a financial investor and a strategic investor here, Finnish co-founder and CEO Jaakko (Jack) Kokko told me: the company’s analysts use the platform. this to research and publish their own reports. The $225 figure also includes a “substantial” pledge of debt from BlackRock, although AlphaSense did not specify the exact amount.

When we last covered the company in 2019 – a Series B round worth 50 million USD – AlphaSense has 1,000 customers. That number has now grown to 3,500, with last year seeing a 110% increase in customer numbers in 2021, with typical usage ranges including companies in the S&P 100 (75% are customers); Dow 50 (97%); and large wealth management firms and banks (70% of these are in the US, the company claims, are users); along with people working in the energy, industrial, consumer goods and technology sectors.

The ARR currently stands at $100 million, although Kokko told me AlphaSense is not yet profitable (nor has the option to be).

Covid-19, if at all, really plays a role in driving the growth of startups. Typical users of the platform – business analysts, strategists, financial planners, investors and others who regularly purchase and use competitive intelligence and market reports – do not but still need to do their jobs but are also less likely to meet face-to-face meetings to discuss research with colleagues and clients to source and provide information.

On top of that, due to the lack of visibility into what lies ahead about the pandemic and its impact, studies, insights and simply more information are all in greater demand than ever. In either case, useful search engines for accessing and disseminating research became important.

The flaw that AlphaSense has identified is a real vulnerability in all repositories, but how successful it is to address is still part of the difficulty. In the case of business information, Kokko says the problem is that it comes from a large number of sources and in a variety of formats, most often delivered as narrative.

“We focus on finding unstructured information, and we provide structure to that information,” he said. Web search intelligence is a problem that is constantly being fed into through machine learning algorithms. The more people search on Google, the better Google becomes. “But our systems have to understand the language and find the right information without the benefits and insights of millions of web searches. None of which exists for personal information. ”

In other words, our world – or at least, the information associated with it – is our scallop on the internet, and the search engines have become the tools to eliminate it. But the same does not apply to unstructured information when it is essentially private, not uploaded to the internet.

Beyond basic search, given the essence of why people search on AlphaSense in the first place, the company’s second layer of products takes the form of how it presents information.

Its algorithms are AI-based and focused on natural language understanding to derive the meaning and intent of search queries, but also to parse the research itself.

So while AlphaSense negotiates deals with companies to provide links to their research and make it searchable, Kokko explains that they also put some of that information into their own hands. own to present it in a way that includes multiple sources in more concise search results.

This is especially important when you consider that when you have several market size forecasts for cloud-based security services, you can weigh the different forecasts and what they do or do. not included, as you will often see different numbers and different KPIs from different analysts,

“We’re adding more structure to the unstructured data, but we’re also sorting it, providing a heat map to show who is more or less optimistic about a particular data point,” he said. “If a user asks about the size of the market that can be solved, we can give a one-size-fits-all answer.”

Another area where AlphaSense wants to do more, Kokko said, is internal search, to help businesses better organize and access their own data. So while its current products are likely to be compared to Wolfram Alpha or LexisNexis, the internal search product will likely bring it closer to the likes of Elastic or Algolia.

All in all, the opportunities speak to the rationale behind this investment,” Goldman Sachs Growth MD Holger Staude told TechCrunch, especially at a time when so many other companies are finding it difficult to raise money. money movement.

“AlphaSense is a rapidly growing business of size, which we consider the strength of the product and team, as well as the size of the market opportunity. Regardless of the reset in the broader tech market, we’re excited to support high-quality companies with strong underlying unit economics, such as AlphaSense,” he said. “AlphaSense is building a search and intelligence platform for many users, not just financial services companies. We believe that access to managed business information will remain at the heart of businesses throughout the cycle. AlphaSense is well positioned to seize this opportunity. ”

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