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AlphaSense, an AI-based market intel firm, snaps up $150M at a $2.5B valuation

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Market intelligence — where organizations gather information about industries, other businesses, trends and more in order to use that data to help make business decisions — has become a huge industry in itself over the last few decades, projected to be worth nearly $84 billion in revenues this year. Now, as newer innovations like ChatGPT threaten to cannibalize the market, one of the bigger startups in the space, AlphaSense, is announcing a significant fundraise of $150 million to double down on the opportunity for growth.

The Series E round — which bumps New York-based AlphaSense’s valuation up to $2.5 billion — is being led by Bond, with participation also from CapitalG (Alphabet’s fund focused on larger investments), Viking Global Investors, Goldman Sachs and new backer BAM Elevate.

These are both financial and strategic investors: AlphaSense has more than 4,000 enterprise customers — covering “the majority of the S&P 500, the world’s largest banks, investment firms, and consultancies, and leading companies spanning every sector of the economy” — and more specifically the list includes search engine behemoths Google and Microsoft, J.P. Morgan and BAM Elevate.

That list of customers, and the basic numbers of this latest round, are both impressive considering the state of play right now, when even startups with promising technology are finding it hard to close rounds, stand up strong valuations and win business.

But AlphaSense’s own activity speaks to the ups and downs in the current market. This is a definite up-round — in the last 15 months prior to today, the company collectively raised $325 million in its Series D (first $225 million led by Goldman Sachs and Viking Global and then a $100 million extension led by CapitalG), ending with a $1.8 billion valuation.

On the other hand, AlphaSense was originally looking to announce this very round, at this very amount, back in June, before delaying for three months (during which time some details of the round leaked out anyway). We’ve asked the company why it held off.

There are a number of ways for organizations to identify and gather market intelligence these days, including the use of in-house research teams, enterprise search and business intelligence tools like LexisNexis or Elastic, outside consultancies, and much more.

AlphaSense’s spin and unique selling point is that it positions itself as a platform that is part data crawler, part insights extractor.

Today the company covers some 10,000 sources of information that span private and public content published by big and small research firms, government and other public bodies, and competitors and other businesses. One particular area of focus has been honing in on financial insights, which AlphaSense beefed up with at least two acquisitions: Stream, which transcribes and catalogues “expert” interviews (executives, competitors, and supply chain members of top companies asked in-depth questions about an industry by analysts); and Sentieo, a financial intelligence platform that targets investment managers.

Its platform — sold as a service (“insights-as-a-service” is actually a thing) — can be used to gather information about a specific company, but in the process of doing that, AlphaSense has built machine learning and its own natural language processing technology to “read” that data and make it into a digestible narrative and series of graphics of their own.

“We focus on the search for unstructured information, and we provide structure to it,” is how Jack Kokko, the founder and CEO of the company, described the process to me last year. Web search intelligence is a problem that is constantly being fed through machine learning algorithms. The more people search on Google, the better Google gets, he said. “But our system has to understand language and land on the right information without the benefit and insights of billions of web searches. None of that exists for private information.”

That is also, it seems, what will help AlphaSense continue to differentiate itself — at least for now — and outperform against the threat of generative AI platforms like OpenAI’s ChatGPT, which has, unsurprisingly, already been weaponized (or celebrated?) as a market research engine.

Speaking to me in connection with this latest round, I asked about the impact of ChatGPT, which has really seen a surge of interest in the last year. It gives “somewhat random results that don’t understand the business or commercial standpoint” of the researcher asking questions of it, he said. “We are training our own Large Language Models, and we are seeing better performance that way.”

However, he’s canny enough to know that this, longer term, will only be a part of what makes AlphaSense useful to its customers. “We can’t predict that will be the case 12 months from now. We need to be on top of many things at once,” he added.

That’s something that AlphaSense may well be using its own engine to track for itself, and if it’s as effective as its investors and customers bet it is, that will keep it one step ahead of the rest.

“At Bond, we look for iconic technology companies that are shaping the future,” said Jay Simons, general partner at Bond, in a statement. “With the ability to deliver the right insights and data to help businesses confidently make the everyday, strategic decisions that ultimately define their future, AlphaSense immediately struck us as a category creator emerging into one of those iconic companies that significantly advances how the business world works.”



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MoneyHash raises $4.5M for its payment orchestration platform serving merchants in MENA

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The payment landscape in the Middle East and Africa (MEA) region is marked by significant fragmentation, with numerous payment providers and methods in each country, evolving regulations and diverse customer preferences. This complexity is further compounded by challenges such as payment fraud, low checkout conversion rates and high transaction failure rates.

Although the COVID-19 pandemic accelerated the adoption of digital payments in the region, infrastructure development remains inadequate. Payment failure rates are three times higher in the MEA region than the global average, and fraud rates and cart abandonment exceed those of other regions by more than 20%. This presents a challenge for merchants, who often perceive payments as a cost and risk center rather than a strategic enabler.

Payment orchestration platforms streamline payment processes for merchants through unified payment APIs. Egyptian fintech MoneyHash, one of such in Africa and the Middle East, has raised $4.5 million in seed investment, money it plans to use to further invest in its technology and growth across the region. This comes two years after the startup secured $3.5 million in pre-seed.

Nader Abdelrazik, co-founder and CEO of MoneyHash, highlights that 10% of all payments processed in the MEA region are digital, placing MoneyHash uniquely for a growth phase that the region will inevitably experience over the next decade. However, navigating this burgeoning payments market will demand patience and a commitment to continuous learning.

As merchants or companies launch their platforms, they often start by collaborating with one or two payment processing providers. As their operations grow and expand into multiple regions, they onboard additional payment providers to meet their evolving needs. However, integrating different payment stacks presents significant challenges. Besides the operational inefficiencies and technical complexities, in-house tech teams may take several weeks to complete these integrations. In Africa and the Middle East, these challenges are amplified by variations in payment methods, currencies and the isolation between countries.

MoneyHash payment integration catalogue. Image Credits: MoneyHash

MoneyHash’s product includes a unified API to integrate pay-in and pay-out rails, a fully customizable checkout experience, transaction routing capabilities with fraud and failure rate optimizers and a centralized transaction reporting hub. This is complemented by tools enabling various use cases such as virtual wallets, subscription management and payment links. Fintechs such as Revio, Stitch, Credrails and Recital are similar players in the payment orchestration space.

In an email interview with TechCrunch, Abdelrazik shared insights into MoneyHash’s collaboration with merchants over the last four years. For one, he claims that payment failure rates across the region vary significantly, and relying solely on averages can be misleading. While the typical figures are around three out of 10 payments failing on average, the reality differs widely among businesses, he said. For some, it may be as low as one out of 10, while for others, it could be as high as five or six out of 10. Additionally, these figures do not include customers who abandon the checkout process voluntarily before making a payment. The CEO also noted that most of its customers don’t know much about the complexity of payments and, many times, are not aware that most leakages they have in payments are fixable.

Furthermore, merchants are expanding much faster than their partner payment service providers (PSPs). These PSPs operate under stringent regulations, making the rollout of new products and customizations slower than the merchants’ growth trajectory. As a result, MoneyHash has intensified its collaboration with PSPs, particularly those catering to enterprises and prioritizing customer requirements.

“Businesses appreciate the large network of integration we have not just for coverage but for expertise. When they know that we executed all these integrations in-house, they appreciate the team’s expertise and depth of knowledge and leverage our team to navigate difficult questions in payments. They know that working with us makes them future-proof,” noted Abdelrazik, who founded MoneyHash with Mustafa Eid.

“That means team expertise is key for us. Most of the time, we hire exclusively with payments and/or tech backgrounds, even in non-technical positions. We saw massive effectiveness in building a team where customers trust their knowledge and expertise in something specialized and critical like payments.”

Following a beta launch in 2022, which garnered the participation of key regional players like Foodics, Rain and Tamatem, MoneyHash introduced its enterprise suite last October, targeting large enterprises. Over the past year, the fintech, which integrates with various payment gateways and processors, including Checkout, Stripe, Ayden, Amazon Pay, Tap and ValU, claimed to have expanded its network of integrations, tripled its revenue and increased its processing volume by 3,000%.

At present, MoneyHash boasts 50 active paying customers. It does not offer free tiers; most customers accessing its sandbox without payment are potential clients in the assessment stage, numbering over 100. The payment orchestration platform levies a combination of SaaS and transaction fees, commencing at $500 + 0.4%. SaaS fees increase while transaction fees decrease significantly for large enterprises due to volume, Abdelrazik explained.

MoneyHash’s seed round was co-led by COTU Ventures and Sukna Ventures, with participation from RZM Investment, Dubai Future District Fund, VentureFriends, Tom Preston-Werner (GitHub’s founder and early Stripe investor) and a group of strategic investors and operators.

Speaking on the investment, Amir Farha, general partner at COTU, said his firm believes that the full potential of digital payments in MEA is yet to be realized and MoneyHash’s platform can catalyze the growth of digital payments across the region, enabling both global and local merchants to tap into new revenue streams. “We are thrilled to renew our support to a team that has consistently demonstrated superior execution, not just in securing top mid-market and enterprise customers, but also in expanding value across the entire chain, even under challenging market conditions,” he added.



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Snowflake CEO Frank Slootman stepping down — and Wall St hates it

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Apparently Frank Slootman, the veteran tech executive, was popular with investors, at least judging from their reaction that he will be stepping down as CEO of Snowflake. The company stock price has plunged more than 24% in after-hours trading on the news.

Slootman will retreat into the role of chairman of the board, while Sridhar Ramaswamy, former head of Google Ads, who came to the company when it bought AI search engine Neeva last year, will take over as chief executive.

Lost in today’s executive shuffle was the company’s earnings. It reported revenue of $738 million, up a healthy 33% year over year with guidance for the next quarter of between $745 and $750 million, with growth of 26-27%.

Slootman came on board in 2019, taking over for veteran executive Bob Muglia, and was charged with taking the company public the following year. Over the last year, the stock has done well, up around 50% (the exact amount is hard to tell with this afternoon’s downward spiral), as many tech stocks recovered from 2022 doldrums.

He was famously well-compensated, with a base salary of $375,000 and a rather attractive stock option. In fact, Fortune reported that the chief executive was making an eye-popping $95 million a month at one point.

He raised eyebrows in 2021 when he told a reporter that diversity shouldn’t override merit, and eventually walked back those comments after a negative reaction from industry peers.

Prior to coming to Snowflake, he spent six years as chairman and CEO at ServiceNow. With all that cash, perhaps he’ll retire and enjoy his money.



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Fintech giant Stripe’s valuation spikes to $65B in employee stock-sale deal

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Payments infrastructure giant Stripe said today it has inked deals with investors to provide liquidity to current and former employees through a tender offer at a $65 billion valuation.

Notably, the valuation represents a 30% increase compared to what Stripe was valued at last March when it raised $6.5 billion in Series I funding at a $50 billion valuation. But it is also still lower than the $95 billion valuation achieved in March of 2021.

While Stripe declined to comment beyond a written statement, a source familiar with the internal happenings in the company told TechCrunch that Stripe and some of its investors agreed to purchase over $1 billion of current and former Stripe employees’ shares.

The company, which counts the likes of Alaska Airlines, Best Buy, Lotus Cars, Microsoft, Uber and Zara as customers, had noted at the time of its last raise that the proceeds would go to “provide liquidity to current and former employees and address employee withholding tax obligations related to equity awards.” That, it added, would result in the retirement of Stripe shares that would offset the issuance of new shares to Series I investors.

A Stripe IPO has been long anticipated and was widely expected to happen in 2024. But with this deal, it appears that an initial public offering may not take place until next year.

In January, TC’s Rebecca Szkutak reported that — in anticipation of that IPO and according to secondary data tracker Caplight — there had been “an absolute flurry of buyers looking to get shares in the company in recent months.” On January 2, a secondary sale closed that valued Stripe shares at $21.06 apiece and valued the startup at $53.65 billion, according to Caplight data.

While Stripe did not name the investors participating in the latest deal, Sequoia Capital Managing Partner Roelof Botha was quoted in Stripe’s announcement and The Wall Street Journal cited Goldman Sachs’s growth equity fund as another backer.

The WSJ also reported that the transaction “is part of a commitment by the Collison brothers to provide liquidity annually to longtime and former employees.” Sources familiar with internal happenings at the company said that commitment is more to provide liquidity “regularly,” and not necessarily annually.

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