Investors across global pension funds, asset managers and hedge funds continually look for an edge to uncover investment opportunities and effectively manage risk. ESG data-driven insights into public and private companies is unlocking massive value, creating a significant competitive advantage that AI startups are just beginning to explore via machine learning to create more powerful financial analysis for investors.
Katalyst is excited to lead a $10 million Series A round of financing for TruValue Labs.
TruValue Labs is a Fintech A.I. company based in San Francisco that uses machine learning to analyze “new world data” about non-financial aspects of companies’ performance to help achieve better investment insights. The TruValue Labs solution works in real-time, providing analytics of intangible data on companies’ sustainability and Environmental, Social, and Governance (ESG) issues – such as environmental impacts, supply chain issues, data security and customer privacy, business ethics, and more – at the speed of current events. Traditionally, such data has been created by analysts, parsing and synthesizing company self reported data and publishing reports and ratings long after the fact. What TruValue Labs is doing is creating significance at scale….
New World Data for a New World of Investing
Traditionally, investment decisions were made based on analysis of tangible data about companies, often from public disclosures. However, today there is a massive amount of information available about companies that was not accessible just a few years ago – much of this data is intangible or alternative data that might not have fit into a typical, traditional investment analysis, but can provide powerful insights about company performance to analysts who know how to take advantage of it.
TruValue Labs’ AI-powered solution empowers investment teams to harness, structure, and make sense of this new world data – helping investors and analysts uncover risks within a company that would not have been discovered before, and also find new opportunities to achieve ROI.
The Rise of ESG in Investment Decisions
The world’s largest pensions funds are now demanding that asset managers incorporate ESG into their investment portfolios and are using ESG integration as a key performance indicator to incentivise managers. Sustainability and ESG issues are also becoming more important to individual investors, especially to the younger generation of Millennials who are starting to invest more heavily and who are more likely to be concerned about corporate social responsibility and sustainability.
Corporate behavior – what a company does, not just what a company says – can send companies’ valuations rising or plummeting in near real-time. In fact, intangible factors like these now drive a majority of company value. Yet it’s not always easy for financial analysts to determine the accuracy and completeness of companies’ ESG factors as obtained from traditional sources alone – traditional analytical methods are ineffective and there is an ever-proliferating amount of unstructured data available beyond the traditional channels.
This is where TruValue Labs delivers an exceptional solution – they offer the first AI-powered solution to deliver analytics on ESG factors that have been identified by the Sustainability Accounting Standards Board (SASB) as having a material impact on company value. TruValue Labs analyzes sentiment on companies based on data from more than 75,000 sources, including government and NGO data, regulatory and legal actions, news reports, and more.
Investment Analysis Powered by AI
The TruValue AI-powered solution uses the latest advances in natural language processing, cognitive computing, and machine learning to provide actionable insights and identify material data for researchers, analysts, portfolio managers, and consumers to help better understand company performance. This technology has the potential to help investors see a more complete depiction of companies’ performance by viewing companies “from the outside in,” making it an essential solution for successful investment decision-making. Investment managers who fully integrate AI into their decision-making processes will have a foundation to derive long-term value in a totally new, sustainable way.
As TruValue Labs is at the forefront of identifying and structuring intangible data via ESG factors, and is a leading innovator in data science driven Fintech, we believe that they have the potential to be category leaders and alpha-driving players in partnership with major asset management firms, financial analysts, institutional investors, hedge funds, and many other financial services organizations that are interested in automating certain aspects of portfolio construction, portfolio management and trade management.
TruValue Labs can help investors gain a competitive edge and make better-informed decisions by integrating ESG factors into their investment analysis – helping investment teams see a fuller picture of companies’ performance, and helping investors manage risks and earn bigger returns. TruValue Labs is at the center of several powerful trends in financial technology: AI, big data analytics, and ESG – leading the way to a fuller understanding and appreciation of “non-financial fundamentals” in investment analysis.
An Experienced Team of AI Technology, Finance and ESG Experts
We don’t just believe in TruValue Labs’ technology, we also believe in their leadership. CEO and co-founder Hendrik Bartel has assembled a talented team with deep expertise in AI, financial research, and ESG, with decades of experience in company behavior-related data, and we have confidence that they will be able to execute their business plan for aggressive growth. TruValue Labs already has existing client relationships with leading financial firms like State Street Government Pension Fund of Japan and Royal Bank of Canada, and the company intends to use this Series A funding to hire more employees and expand their client base.
We look forward to continuing to partner with Hendrik and the rest of the TruValue team as they capitalize on their unique market opportunity to bring transformative AI-powered solutions to finance.
Add some vision in here… get us out of ESG and expand to the concept of alternative data, structuring the unstructured.