AlphaSense revolutionises search for financial data
All the information in the world seems to be at your fingertips. Do you want to know the average annual rainfall in Ecuador? Which Roman general defeated Carthage? All you have to do is to use an internet search engine. But for some specialised information – like financial data – the old methods don't work. One Finnish company realised this was a serious problem as well as a significant opportunity.
"I started my career as a junior investment banker and experienced how difficult and painful it was to find information," says Jaakko Kokko, CEO of AlphaSense. "I spent nights and days looking through big piles of SEC filings, research reports or news headlines. Amazingly there was no 'Google' for this. The opportunity for AlphaSense was very clear in building an intelligent search engine to help people quickly get to the information they need."
AlphaSense was founded in 2008, a difficult period for any young company in the financial services industry. Thirteen days after the firm was registered the Dow Jones index fell 7 per cent due to fears over the American bank bailout plan. The financial industry was in turmoil.
"We got our initial funding from Tekes at the tail-end of the 2008 financial crisis, when many VCs would have shied away from a company selling to the financial services market," Kokko continues. "Of course that market later came back in a big way, which has helped us to grow rapidly."
The financial crisis caused many investment firms to tighten their belts, but AlphaSense had a product which they desperately needed. In 2010 they launched an intelligent search engine for financial data.
"Our key focus and differentiation is in our intelligent search capabilities," Kokko says. "Users can just type in search keywords and we find all references to the same concept across millions of documents."
They use advanced linguistic search and nature language processing algorithms to search by topics, concepts and ideas, which is a much more sophisticated method than basic keyword searches. This means the system understands the concept and not just the words a person is searching for.
"Let's say you are looking for 'order growth in China' for a company or industry," Kokko explains. "We'll find those exact keywords, but we'll also find references to 'increased bookings in Shenzhen' and thousands of other potential synonyms for that concept."
Their database includes filings with regulators, call and conference transcripts, annual and interim reports, news, press releases and investor relations presentations. AlphaSense clients can also contribute.
"We let users upload their own content," says Kokko. "They can also annotate, share and collaborate – all in one seamlessly integrated system."
Room to expand
The past years have been good for the company. They have received numerous awards for their financial technology and were named to the Red Herring Top 100. AlphaSense was also ranked as one of the fastest growing private corporations in America. Kokko says that the company is expanding in their core segments as well as in new markets.
"The majority of our clients are in the United States, where we first started marketing our service," he says. "Europe is starting to become significant as well, and we are already thinking about expanding into Asia."
AlphaSense focused on the financial services industry because it was one which Kokko knew well. Yet from the beginning they knew they had the capability to serve knowledge professionals across many other markets. They have already begun to market their product to large American corporations who use it for investor relations, competitive intelligence and market research.
"There are many other verticals that we'll be expanding our service to over time," Kokko predicts. "With a billion knowledge workers in the world, our product can ultimately help millions of them to get their work done more efficiently, collaboratively and with higher quality results."
Heart in Finland
While most of their clients are in America, AlphaSense's technology is developed in Finland. They have twenty engineers in their Helsinki office, many with PhDs. They are experts in cloud technology, search technology, nature language processing and machine learning, as well as mobile development.
"The team is growing rapidly to accommodate client demand for added functionality to our platform," says Kokko. "We are constantly looking for great software developers for our Helsinki office."
AlphaSense has worked with Tekes almost from the beginning. They were recently named as champions in the Young Innovative Companies programme. Among other criteria, to qualify for the YIC programme a company must have a good management team, clear plan to grow quickly in international markets and a competitive edge. Funding is provided in stages as goals are met.
"Funding from Tekes was really valuable, especially in our early years," says Kokko. "It allowed us to build our technology and product without being distracted or diluted by VC funding. Tekes was willing to take very early stage risk on something that back then was barely a business plan. What Tekes can do at its best is to take calculated risks in times when investors might be overly risk-averse."
AlphaSense has taken the risk and are now enjoying the rewards. The life of an entrepreneur is filled with peaks and valleys, but Kokko loves what he does.
"I can't imagine a more fun job than being a startup CEO and building a product that I'm passionate about, and every day helping customers that really love our product," Kokko concludes. "I get to wake up every morning thinking about new ideas to enhance our product or new opportunities to go after. And I get to build and work with a fantastic team every day, where everyone is committed and working towards the same goal."
Text: David J. Cord
Photo: Liisa Jokinen
Story was first published in Tekes Views Magazine 2016
Capture: "Tekes was willing to take very early stage risk on something that back then was barely a business plan. What Tekes can do at its best is to take calculated risks in times when investors might be overly risk-averse," says Jaakko Kokko, CEO of AlphaSense.