Alphabet’s A.I. frenzy hits startup scene as CapitalG unit leads $100 million investment in AlphaSense
AlphaSense CEO Jack Kokko
AlphaSense
Google’s hefty investment in artificial intelligence and the latest boom in generative AI doesn’t end with its homegrown products. Parent company Alphabet is also putting money to work in the startup world.
Alphabet’s late-stage venture capital arm, CapitalG, told CNBC that it just led a $100 million investment in corporate data firm AlphaSense, valuing the company at $1.8 billion. AlphaSense competes with companies like FactSet and Bloomberg in providing data on businesses that can help inform corporate and investment strategies.
The funding round, announced Tuesday, follows months of increased hype surrounding generative AI, particularly OpenAI’s ChatGPT and other text-generating tools that use large language models, or LLMs, to provide creative and sophisticated answers to user queries. In February, Google introduced a conversational technology called Bard, which will integrate with the company’s dominant search engine and other products.
AlphaSense CEO Jack Kokko said AlphaSense is working on a product feature that will automatically summarize financial documents for customers so they can more easily glean key points. Summarization has long been a challenging task for AI software, but has gotten significantly better with the help of LLMs.
Kokko founded AlphaSense in 2011. The latest financing is a flat round following a $225 million investment in June that was led by Goldman Sachs and Viking Global Investors. In that round, the valuation doubled from a 2021 financing that was led by the same investors.
Generative AI wasn’t a talking point in the prior two rounds because the term hadn’t yet jumped into the popular lexicon. In its press release last year, 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.”
Since late 2021, tech funding has dried up alongside a plunge in public company valuations and a freezing of the IPO market. Generative AI has been the one bright spot this year, turning rather frothy in some corners. In March, a 2-year-old pre-revenue startup called Character.AI, which was founded by two former Google employees, raised $150 million at a $1 billion valuation, in a round led by Andreessen Horowitz.
AlphaSense is much further along, having already surpassed $100 million in annual recurring revenue in 2022. Kokko said the fresh capital will go toward hiring additional salespeople as the company prepares to go public when the economy stabilizes. He said the money will also help AlphaSense improve its technology, taking advantage of advances in generative AI.
James Luo, a CapitalG partner, said part of the appeal of AlphaSense using newer LLMs is that it can make the core product more appealing to customers outside of traditional financial services. Salespeople, for instance, could be drawn to using a product like AlphaSense if the interface was more intuitive.
“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.”
Still, modern-day LLMs suffer from a phenomenon that AI researchers call “hallucination,” referring to the tendency for the software to generate inaccurate responses.
Kokko said AlphaSense is working on techniques to ensure that its technology creates accurate summaries with footnotes to documents so that people know the sources of the information. He declined to identify the specific LLMs that AlphaSense plans to incorporate, but he said the company is testing nearly every major model that’s currently available. Tech companies including Alphabet and Meta as well as startups like OpenAI and Cohere have developed LLMs.
WATCH: Wall Street rides a ‘levitation rally’ into the end of the first quarter.
Chris Martin of Coldplay performs live at San Siro Stadium, Milan, Italy, in July 2017.
Mairo Cinquetti | NurPhoto | Getty Images
Astronomer‘s interim CEO said in his first public comment since unexpectedly taking over the role on Saturday that he hopes to move the tech startup past the viral moment that captured national attention last week.
Pete DeJoy was appointed to the top job due to the resignation of CEO Andy Byron, days after he was caught on video in an intimate moment with the company’s head of human resources at a Coldplay concert. Astronomer said over the weekend that it would begin a search for a new CEO.
“The events of the past few days have received a level of media attention that few companies — let alone startups in our small corner of the data and AI world — ever encounter,” DeJoy wrote in a LinkedIn post on Monday. “The spotlight has been unusual and surreal for our team and, while I would never have wished for it to happen like this, Astronomer is now a household name.”
Byron was shown on a big screen at the concert in Boston on Wednesday with his arms around Chief People Officer Kristin Cabot. Byron, who is married with children, immediately hid when the couple was shown on screen. Lead singer Chris Martin said, “Either they’re having an affair or they’re just very shy.” A concert attendee’s video of the affair went viral.
DeJoy helped start Astronomer in 2017, according to his LinkedIn profile, and had been serving as chief product officer since earlier this year.
In May, Astronomer announced a $93 million investment round led by Bain Ventures and other investors, including Salesforce Ventures.
“I’m stepping into this role with a wholehearted commitment to taking care of our people and delivering for our customers,” DeJoy wrote. He added that “our story is very much still being written.”
Astronomer is commercializing the open-source data operations platform Astro. DeJoy wrote that customers “trust us with their most ambitious data & AI projects” and that “we’re here because the mission is bigger than any one moment.”
Dylan Field, co-founder and CEO of Figma Inc., after the morning sessions at the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, on July 11, 2024.
David Paul Morris | Bloomberg | Getty Images
Design software company Figma on Monday published an updated prospectus for its initial public offering.
The company said it expects to sell about 37 million shares at $25 to $28 each. That would generate as much as $1 billion in proceeds, between the company and selling shareholders.
The IPO could value Figma, led by co-founder Dylan Field, a fully diluted valuation of $14.6 billion to $16.4 billion. Field plans to sell 2.35 million shares, which could be worth as much as $65.8 million.
In a 2024 tender offer, investors valued the company at $12.5 billion. In 2022, Adobe had agreed to acquire Figma for $20 billion, but the deal was scrapped after regulators objected.
The flow of technology companies joining U.S. exchanges has slowed since late 2021. Concerns over inflation and a recession made some investors less interested in backing fast-growing but money-losing companies.
But a few technology stocks have become available in recent months. CoreWeave went public in March, and Circle and Chime shares started trading in June.
Figma filed to go public on July 1, announcing plans to trade on the New York Stock Exchange under the symbol “FIG.”
On Monday, it provided preliminary results for the second quarter, showing $9.0 million to $12.0 million in operating income on $247 million to $250 million in revenue. That would imply year-over-year revenue growth of 39% at the low end and 41% at the high end. Growth in the first quarter exceeded 46%.
During the second quarter, Figma added clients and expanded business with existing ones. The company’s operating margin would be ticking up to 4% to 5%, up from 3% in the same quarter a year ago, based on the preliminary results.
Figma said it has authorized the issuance of “blockchain common stock” in the form of “blockchain-based tokens.” So far, though, Figma said it isn’t planning to issue this type of stock. In July, Figma disclosed investments in a stablecoin and a Bitcoin exchange-traded fund.
Mike Krieger, a co-founder of Instagram who is now chief product officer of artificial intelligence model developer Anthropic, has joined the board. Luis von Ahn, co-founder and CEO of Duolingo, is also joining the board, according to the filing.
WATCH: Goldman Sachs’ Stephan Feldgoise on M&A landscape: One of the highest $10B+ transaction years YTD
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Sports2 years agoButton battles heat exhaustion in NASCAR debut
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike