Wall Street Bets $50M on Kensho’s A.I. Investing Tools

As artificial intelligence begins creeping into virtually every industry, it makes sense that Wall Street would be one of the first places where it makes an impact—there’s a ton of data to crunch, and money to be made if software can help make better decisions more quickly.

Kensho Technologies is one of the startups gaining traction with A.I. technologies for the finance sector. And Wall Street is pouring a lot of money into the Boston-area company.

Kensho has raised $50 million in a Series B round that values the startup at more than $500 million, according to reports by Forbes and the Boston Business Journal.

The round was led by S&P Global, which also announced a partnership with Kensho that involves collaborating on products. Other investors in the round reportedly include six big banks: Goldman Sachs, JPMorgan Chase, Bank of America Merrill Lynch, Morgan Stanley, Citigroup, and Wells Fargo.

Kensho previously raised at least $47.8 million in equity funding, SEC filings show.

The startup was founded by Daniel Nadler (its CEO) in 2013, while he was pursuing a PhD at Harvard University. Kensho’s staff includes veterans of Apple, Google, Facebook, and academia, according to the company’s website.

Kensho says its machine learning software can comb through huge amounts of data to find correlations between world events and the resulting effects on publicly traded stocks and other financial assets. The company’s first product was an intelligent virtual assistant dubbed Warren, which was designed to enable investors to perform research using natural-language queries. For example, “What happens to the share prices of energy companies when oil trades above $100 a barrel and political unrest has recently occurred in the Middle East?” The idea was to create a Siri for finance professionals.

Kensho has dropped the name “Warren” in its marketing materials, but it still offers “user-friendly analytics platforms and tools,” as well as products that help customers visualize data.

The startup is profitable, Nadler told Forbes. Kensho says its customers include big global banks and investment firms. Its website also lists a national security division, although visitors can’t click through to find more information.

Kensho employs around 80 people, 50 of whom are based in its Cambridge, MA, office, the Business Journal reported. Kensho also has offices in New York and just outside of Washington, DC.

Plenty of startups are developing A.I. products for the financial industry. Clinc, a University of Michigan spinout, has created something similar to Kensho’s Warren, but for consumers. Clinc’s Finie is a voice-controlled, automated personal financial assistant that can perform banking tasks and provide financial insights based on info from a user’s bank account.

Back in Boston, Cinch Financial is developing A.I.-related tools to help people make smarter financial decisions. And Quantopian’s software enables people to develop and test algorithms aimed at making better investment choices than humans.

Jeff Engel is a senior editor at Xconomy. Email: jengel@xconomy.com Follow @JeffEngelXcon

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