Artificial intelligence and big data analysis applied to finance attract more and more investors. The last big deal in the industry was a few days ago. Scaleup company Affirm, a U.S. platform specializing in the provision of installment loans in stores, able to establish in real time the reliability of the customer thanks to artificial intelligence and machine learning, announced the closing of a round of $500 million G Series, led by GIC, Singapore sovereign fund, and Durable Capital Partners.
The round was also attended by previous investors such as Lightspeed Venture Partners, Wellington Management Company, Baillie Gifford, Spark Capital, Founders Fund and Fidelity Management & Research Company. Based in San Francisco, the scaleup was founded by PayPal’s co-founder Max Levchin and has raised nearly $1.5 billion from investors to date.
Read more about fintech companies that use AI and big data in the finance sector, and read the latest business news in the world with our companion app, Born2invest.
Big data analysis is an approach that asset managers have long learned to adopt
Just three years ago, George Walker, president, and chief executive officer of Neuberger Berman, said that NB had chosen to rely on fintech: “We believe a lot in using big data, so much so that we have hired a chief data scientist. He is Michael Recce, who worked for Singapore’s sovereign wealth fund GIC.
Recce has built machine learning and artificial intelligence systems capable of analyzing a huge amount of data collected also through the web to obtain indications on the real health of the companies in which we could then invest. It is one of the many ways to go beyond balance sheet analysis to evaluate them.
An approach that at the moment is also within the reach of private traders
FinScience, an Italian startup controlled by Datrix group, which deals with AI applied to the financial sector, has in fact just expanded its offer to private customers, after many institutional investors have already chosen to expand their information base by focusing on artificial intelligence and alternative data.
For example, in December 2019, FinScience entered into a partnership with Alternative Capital Partners SGR (Acp SGR), the first illiquid thematic alternative investment manager that applies the so-called ESG criteria in the process of building its portfolio of private assets. FinScience supports Acp SGR in improving the process of screening and prospective risk assessment of private asset investments through a synthetic scoring based on Machine Learning and Natural Language Processing algorithms applied to a large amount of unconventional alternative digital data (websites, forums, blogs, social networks, online news, maps, e-commerce platforms).
FinScience uses artificial intelligence algorithms to collect, interpret and transform huge volumes of alternative data into investment information
The main indicators are: the global digital popularity value, which measures the total popularity of a company on the web, the investor digital popularity value, which measures the company’s popularity only in the financial world, and sentiment, which indicates the positive or negative perception of the stock in the digital world. Thanks to the combination of these three variables it is possible to identify disruptive trends in the market, monitor and intercept potential risks for investments and know which are the most interesting companies related to a market-sensitive theme or event.
The FinScience software allows users to identify securities linked positively and negatively to specific sectors and events with a high financial impact. Artificial intelligence, for example, would have predicted well in advance the impact of the coronavirus crisis on the major international large caps, even before the global emergency exploded. It emerged from a FinScience study, published in late March, in full lockdown, and entitled ‘COVID-19: an investigation on safe and exposed assets leveraging big data.’ Another interesting test will surely be the next U.S. elections. In the latter case, the AI can indicate which industry sectors and securities are perceived as most impacted by Trump’s or Biden’s victory and their different positions on the issues at the center of the election campaign.
Datrix was created at the end of 2018
Datrix, the company that develops augmented analytics solutions for marketing, sales, publishing and finance purposes, was created at the end of 2018 from the integration between FinScience and 3rd Place, and last May it received a $2.7 million (€2.3 million) round for about 10% of the capital. It was led by United Ventures sgr and was attended, among other investors, by the Wellness Holding of Nerio Alessandri, the founder of Technogym.
United Ventures was already a shareholder of Datrix since August 2019 through its first UV1 fund, following the acquisition by Datrix of PaperLit, a former subsidiary of the fund, specialized in the distribution and monetization of content on mobile and smart speakers for publishers and brands, but at that time the reinvestment of the fund in the capital of the parent company had not been communicated.
Finscience was founded in 2017 by four managers, three of whom came from Google Italy: Fabrizio Milano D’Aragona, who worked for seven years at Google Italy, where he was responsible for the retail, fashion and local sectors; Mauro Arte, who was in charge of the media & entertainment sector at Google Italy, until he became head of the You Tube Italia division; Claudio Zamboni, who was industry leader in Google Italy for the telco and entertainment sectors; Alessandro Arrigo, with decades of experience in digital consulting. The same managers, with the exception of Arrigo, had founded 3rdPlace in 2010, an innovative SME that offers solutions and services in the field of intelligence applied to digital data.
The integration between FinScience and 3rdPlace, which saw the founders and partners sell their shares and reinvest in Datrix, followed a second-round seed of FinScience of $817,000 (€700,000) plus a $350,000 (€300,000) loan from Mcc signed by the same investors of the first round of $1.17 million (€1 million) in November 2017, which was attended by private investors from the financial sector.
To date, the Datrix group consists of four tech companies. In addition to 3rdPlace, FinScience, and Paperlit, there is also ByTek, the martech company that develops platforms based on Artificial Intelligence for Search Marketing, Online Advertising & Lead Generation, Content Marketing data-driven.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in Be Beez, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
Digital Health Doubles its Investment in 2021
In 2020, this market reached $ 21.6 billion worldwide. Investment in telemedicine reached $ 4.3 billion, an increase of 139%...
Companies Faced with the Challenge of Minimizing their Environmental Impact
The participants in the round table called attention to the need for European recovery funds to truly reach the entire...
Ripple Price Forecast: Why XRP Faces a 21% Plunge
Ripple has had a mixed year so far. On the positive side, the XRP price has increased by more than...
Futures Markets Highly Vulnerable to Weather Extremes
Cotton futures were lower as Hurricane Nicholas threatened to bring some big rains to Cotton production areas in the Delta...
Augmented Reality (AR) And Virtual Reality (VR) Stocks to Keep On Your Radar
Everyone knows that Augmented Reality (AR) and Virtual Reality (VR) will be a huge deal in the coming years. What...