Alphabet’s CapitalG leads a $100 million funding in AI startup AlphaSense; now valued at $1.8 billion

The AI frenzy that began with ChatGPT shows no signs of slowing down as artificial intelligence startups attract billions of dollars in funding from eager investors seeking to capitalize on the latest AI advancements. Over the past few months, there has been a surge of interest in  “generative” AI startups. The latest is AlphaSense, a New York-based AI startup.

Today, AlphaSense announced it has raised $100 million in a fresh round of funding led by Alphabet’s venture capital arm CapitalG, with participation from existing investors Goldman Sachs Asset Management and Viking Global.

The latest round values the 12-year-old AI startup at a valuation of $1.8 billion, making the startup a member of the highly-coveted unicorn club. AlphaSense said it will use the new cash infusion to further its advanced artificial intelligence capabilities. AlphaSense was last valued at $1.7 billion after raising $225 million in 2022.

Founded in 2011 by CEO Jack Kokko, AlphaSense offers a market intelligence platform that helps customers extract relevant information from a trove of public and private content such as equity research, earnings calls, company filings, and news. The company also competes with companies like Bloomberg, Norway-based Exabel, and FactSet in providing data on businesses that can help inform corporate and investment strategies.

In a statement, Kokko said the company is also working on a product feature that will automatically summarize financial documents for customers so they can more easily glean key points. Over the years, AI software has faced significant challenges in summarization, but the assistance of LLMs has greatly improved its effectiveness.

AlphaSense said its platform uses “proprietary search technology” powered by AI and natural language processing to “extract relevant insights from an extensive universe of public and private content.”

In recent times, there has been a shortage of tech funding, resulting in a decline in public company valuations and the freezing of the IPO market. However, generative AI has been a bright spot and has seen significant investment, with Character.AI raising $150 million at a $1 billion valuation. AlphaSense has already achieved over $100 million in annual recurring revenue.

According to CapitalG partner James Luo, AlphaSense’s use of newer LLMs can enhance the core product’s appeal to customers beyond traditional financial services. The introduction of a more user-friendly interface could entice salespeople, for example, to adopt AlphaSense as their preferred solution.

“These are the people who are using Google Search to try to find every piece of information but they don’t have access to a lot of proprietary content,” Luo said of potential new users. “If you don’t work in that world, you need something that makes it a lot easier for you to understand that information.”