The world of finance is always looking for signals, indicators that indicate opportunities to buy or sell in the market. Some may look for signals in expensive analyst reports, while others may find them in behind-the-scenes conversations with insiders. But investors sometimes need help finding these indicators that are hiding in plain sight.
What Brightwave promises its AI agents will be able to spot are signals in public data.
“There's a huge amount of unprocessed signals in the world right now,” Brightwave CEO Mike Conover (pictured above, right) told TechCrunch. “The core job of asset managers is to learn about the world that no one has ever seen in order to identify mispriced assets, but it is a task that is well suited to the human attention span. It is not clear whether
Conover argues that this task may be better suited to his company's AI systems.
Brightwave's AI agents can use generative AI to summarize news events, stories, and market reports to generate research reports for asset managers. In an example on Brightwave's website, the AI agent condenses a 30-page report on the state of AI from Goldman Sachs into about five pages, highlighting key numbers and predictions.
The company says customers can highlight snippets of text in AI-generated reports to see the source of a sentence or dig deeper into a particular topic. Brightwave didn't provide TechCrunch with a demo of the feature, but it doesn't seem all that similar to the follow-up question feature offered by Perplexity, which also recently introduced its own financial research tool.
While there is no shortage of startups working on AI agents to assist with financial research, Conover says one of Brightwave's biggest differentiators is its knowledge graph. It is a structured way to represent real-world entities and their relationships. For example, a simple knowledge graph labels Elon Musk as the CEO of Tesla in a way that automated systems can understand.
Conover worked on knowledge graphs during his PhD and while at LinkedIn, and has several patents in this area. He believes that more complex knowledge graphs will improve the performance of today's AI systems.
Brightwave raised an oversubscribed $6 million seed round led by Decibel Partners this summer, joining a number of other AI startups that have secured seed funding this year. But unlike its peers, Brightwave has already closed another round after just four months. On Tuesday, the startup announced it had raised $15 million in Series A, again led by Decibel, with participation from OMERS Ventures.
Two rounds in four months is pretty fast even for today's AI startups. So what is given?
If your AI startup runs out of money to train models or hire talent, quick funding may be helpful. But Alessio Fanelli, partner at Decibel, the investor who led both of Brightwave's rounds, says this was not the case. Instead, he said the startup has seen significant traction, quadrupling its revenue in four months, and that Decibel has closed its round quickly to avoid being kicked out of the Series A by larger funds rushing in. He said he was thinking of closing the deal in the next few days.
“We really don't want to spend too much time talking to other investors and have them distract us from building the business,” Fanelli told TechCrunch. “Maybe other VCs will tell you to wait and raise at a higher price later. […] Today I would like to introduce this round to you. ”
This sentiment may represent a broader thinking pattern among investors today. Competition to land the hottest AI startups is fierce, so VCs need to commit big money and do it quickly. This may help explain why some AI startups are raising funding at an unprecedented pace.
Conover previously co-created Dolly, Databricks' open source AI model, and his co-founder Brandon Kotara previously led machine learning projects at Workday. The startup didn't reveal much about the model it uses, and also declined to share details about the public or licensed data it uses to generate its financial research reports.
But it seems very likely that Brightwave's AI agent is pulling some of the information from news articles. Other AI startups, such as Perplexity, have also been accused of diverting information from journalists into products that compete with media companies.
Conover doesn't see news organizations as competition, and said his startup is “in no way going to get around a paywall.” For now, the CEO said, Brightwave is excited to work with the world's best news organizations in a way that respects the rights of content creators.