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When Jack Kokko started his career as an analyst at Morgan Stanley in the late 1990s, he could never have known that one day he would end up creating software that would transform his job – and that of thousands of analysts across the industry. What he did know, however, was that the work of manually poring over endless reams of research reports, market data and company filings was tedious and inefficient.
‘I quickly realised how challenging it was to find key insights and market trends at the speed, precision, and reliability that was required,’ he explains. ‘It was truly impossible to capture every data point that could be impactful.’ The result was a clear awareness that he didn’t have everything he needed to make informed business decisions. ‘I remember multiple occasions of being nervous walking into a client board meeting, fearing that I might have missed critical information that could risk the outcome of a billion-dollar deal,’ he says.
A decade later, while doing an MBA for executives at The Wharton School, University of Pennsylvania, he was stunned to realise that very little had changed – analysts still had to research data bit by bit. While studying, he met Raj Neervannan, and together the two of them set about seeing if they could solve that problem. Their idea was simple but ambitious: to build a search engine akin to Google, but for the business and finance sectors. By leveraging machine learning and AI, the hope was that they could create something that would ‘enable professionals to cut through the noise and easily extract insights from thousands of sources and billions of data points.’
That was in 2008. By 2011, with Jack as CEO and Raj as CTO, AlphaSense was ready to launch. The product initially featured mainly Securities and Exchange Commission (SEC) filings and conference call transcripts, but quickly expanded to take in broker research and press releases. By 2015, AlphaSense was named a ‘fastestgrowing start-up’ by Inc Magazine, and a year later it hit its first major company milestones: raising USD33m in its first round of funding and amassing 500 clients.
Today, the firm is well on its way to becoming the gold standard for business market research. Its customer base includes the majority of S&P 500 companies, most of the largest global banks and professional services firms, and all of the largest 20 pharmaceutical companies. AlphaSense last year acquired Stream by Mosaic, a major expert interview transcript library, a move that Jack describes as ‘a significant leap into generating content to cover what used to be a blind spot in the market – all the insights from the brains of business executives and operators who are in the trenches and have the best knowledge of what’s truly going on.’ This year, Goldman Sachs research was exclusively added to AlphaSense’s Wall Street Insights® product, significantly boosting its offering of real-time and aftermarket equity information.
Private equity has been vital for allowing the company to grow at such a pace. ‘In the private markets, a company can benefit significantly from being able to tell its unique story to investors, as well as being able to do so openly without worrying that information will leak to the broader market,’ explains Jack. AlphaSense last year raised another USD180m in Series C funding led by Viking Global Investors and the Growth Equity business within Goldman Sachs Asset Management. It’s money that Jack plans to use to improve in two key areas: content availability and product development.
'That means expanding our content sets to provide stronger coverage across geographies and industries, as well as private and public companies,’ says Jack. Other upgrades in the pipeline include growing the company’s engineering teams in Europe, Asia and the US, finetuning the search features, and offering recommendations on trending topics relevant to clients’ specific interests. ‘It’s all with the aim of truly serving knowledge professionals across all types of businesses,’ he explains. ‘We are fortunate to have a lot of great uses for the capital, and only have to be really good at prioritising allocation.’
At the heart of AlphaSense is its AI and deep learning technology, essentially hundreds of algorithms that scan text and categorise information according to millions of related words. ‘Imagine having your own dedicated team of experts constantly scouring and filtering information to provide you with the insights that are uniquely relevant to you,’ says Jack.
One of the company’s unique selling points is that instead of having to search all this information one keyword at a time, users will see all results based on similar keywords or phrases as well. Jack gives the example of searching for the term ‘driverless car’. In a CTRL-F literal search, that would bring up only documents that contain those exact words. But with AlphaSense, users will also see information containing terms such as ‘autonomous vehicle’ and other relevant words. ‘In other words, it’s trained to understand the nuances and jargon of financial and business language, especially synonyms,’ he explains. ‘Deep learning is the key enabling technology that allows the mapping of human language in this way, identifying all the connections of the various terms that are used to talk about the same topic from many different angles.’
Over the past decade, Jack and Raj have watched AlphaSense grow from a proposition to a reality. In the next few years, they want to grow it even further. ‘We are sensing a gradual shift from being a specialised 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,’ says Jack. ‘We have very high ambitions for the business; and with our recent financing, we now have the fuel to go realise them. At this point, it’s all about execution.’