An ex-hedge fund analyst just landed $19 million in funding for a Bloomberg-killer as it tries to shake up a $28 billion market
- Sentieo, a web and mobile-app based financial research and data platform, announced a $19 million round of funding Tuesday.
- The funding round - more than triple the amount they raised in March - comes after six months of steady growth.
- Sentieo is one of a number of companies trying to dislodge the stranglehold Bloomberg has on $28 billion financial data market.
- The company's service is a sort of mash-up of an AI-powered search engine, Evernote, financial document repository, and traditional equity research data.
Another challenger is gearing up to make a run at Bloomberg, the dominant player in the $28 billion financial data market.
Sentieo - a web and mobile-app based platform that's a sort of mash-up of an AI-powered search engine, Evernote, financial document repository, and traditional equity research data - has uncorked a fresh $19 million round of funding, the company announced Tuesday. That's more than triple the amount it raised in March, and it brings their total funding to $30 million.
The funding, a Series A round, was led by Centana Growth Partners. Sentieo declined to specify the valuation the funding was raised at.
Sentieo, founded nearly three years ago by brothers Alap and Naman Shah, is among a rash of companies looking to dislodge the stranglehold Bloomberg has on providing data to bankers, traders, investors, and money managers.
A single Bloomberg terminal costs $24,000 a year, and the company controls around a third of the $28 billion global information market for financial markets data, analysis and news, according to estimates from Burton-Taylor International Consulting, a TP ICAP company. Around two-thirds of its estimated $9 billion in annual revenues comes from its terminals.
Sentieo is newer to the competition than some Bloomberg challengers - such as financial chat company Symphony, which has racked up some $300 million in funding form the likes of Goldman Sachs and JPMorgan - but the firm is quickly gathering some steam. It now has over 700 clients, up from 450 in March (a 55% increase) and more than triple what it had 18 months ago, the company said.
Customers include some of the world's top hedge funds, investments banks, Fortune 500 corporations, and asset managers.
"I do feel like a lot of this is the market and the stars aligning with our product and our vision around the fact that investing is becoming more and more data intensive," co-founder and CEO Alap Shah told Business Insider. "And that's been the case for a very long time, but I think over the last 18 months we've really seen another step change in how much more data is out there and how much more data is required to be processed."
Shah said revenues have grown significantly in the past six month as the firm invested in product, engineering, and sales, but he declined to share revenue figures or the prices they charge customers for the service. Back in 2016, the service cost between $500 and $1,000 a month, but prices have gone up since then, a spokesman said.
So how does Sentieo work, and how's it different from other financial data platforms?
Before Sentieo was a company, it started as a tool that Shah, a former hedge-fund analyst at Viking and Citadel, and some of his friends used to streamline their own investment processes amid an ever-growing list of data sources to keep track off.
In part, Sentieo serves as a souped-up financial document search engine. The company uses machine learning and natural language processing to upload and process millions of regulatory documents, research, and other financial data sources - including offerings from the burgeoning alternative data world - and make it all searchable.
How often and in what context does IBM mention the word "acquisition" in filings, presentations, or earnings transcripts in the year prior to its $34 billion buyout of software company Red Hat? That's accessible almost instantaneously through Sentieo's platform. How do analysts feel about the transaction? That type of sentiment analysis is available, too.
(Note: Sentieo has provided some journalists, myself included, with free access to a no-frills version of the app to experience and test out some of the features.)
Additionally, there are the more traditional equity-data features you'd find from Bloomberg, Thomson Reuters, or CapIQ - fundamentals, ratios, stock charts, etc.
Sentieo has also built out its research management capabilities, so after finding and extracting interesting data or documents, they can be easily annotated, shared, and discussed with colleagues.
Tying all of these functions together into a coherent experience has been a primary focus of the firm this year, and Shah credits their progress on this front for helping boost their customer base and client engagement.
The end goal is to build out the bells and whistles so that customers can do almost anything their job requires within the Sentieo ecosystem.
The company, which has a 160 employees and counting, is still a long way from accomplishing that ambitious vision - and a long way from toppling Bloomberg and other top players in the financial data arena. But the new infusion of capital will go toward building out and integrating more tools to get closer to that goal and keep customer growth humming along.