Auquan Ltd., a startup that offers an artificial intelligence-powered analytics engine for financial services companies, said today it has closed on a $3.5 million seed funding round.

Today’s round, led by Neotribe Ventures and with participation from Episode 1 and Stage 2 Capital, comes alongside the official debut of the company’s flagship product, the Auquan Intelligence Engine.

The startup has ambitious plans to help financial services providers make sense of the vast amounts of unstructured data they deal with. Within the financial world, companies are overwhelmed by massive amounts of unstructured text, including company reports, regulatory documents, 10-Ks and 10-Qs, broker research, legal filings and news coverage, and this information contains vital insights. To deal with it, they typically require an army of well-paid professionals to read through everything and extract insights manually.

Auquan wants to change this, helping financial services firms collect all of this data and extract insights from it automatically.

That’s the aim of the Auquan Intelligence Engine, which is powered by a cutting-edge AI technique called retrieval augmented generation that was first developed by Meta Platforms Inc. RAG AI is said to combine the power of AI-driven information retrieval systems with generative AI, and in this way it’s able to bridge the gap between the static knowledge of traditional large language models, gathering up-to-the-minute information to generate the dynamic and context-aware insights financial services demand.

Although generative AI tools are very impressive with their conversational capabilities, they have limited utility in financial services because they can lack access to the most up-to-date information. They also hallucinate frequently, providing inaccurate information when they’re not sure of the true answer. By throwing RAG AI into the mix, Auquan claims, its Intelligence Engine will generate responses and information based on the most recent, specific and credible information.

Co-founder and Chief Executive Chandini Jain said RAG AI is the breakthrough that the financial industry has been waiting for, one that makes generative AI a viable technology. “Generative AI requires significant domain expertise and a deep understanding of the user workflows to actually deliver the [promised] productivity and performance gains,” he said.

Auquan cited a number of very specific use cases its platform is designed to handle, including private company pre-screening and due diligence that is vital for private equity, debt funds and venture capital firms. It says it can provide in-depth insights into more than half a million companies around the world, helping analysts to identify potential investment opportunities and hidden risks.

The Auquan Intelligence Engine can also be employed for compliance tasks such as Know Your Customer, background checks and anti-money laundering protocols. Environmental, social, and corporate governance monitoring and sustainability research are additional use cases.

Auquan says it has already won the confidence of numerous asset managers, investment banks and private equity funds in the U.S. and in Europe.

“Auquan’s product surfaces valuable ‘unknown unknowns’ for our emerging market portfolios without requiring us to search,” said Kunjal Gala, head of global emerging markets at Federated Hermes, an early adopter of Auquan’s platform. “Auquan’s ability to identify hidden information in local languages from noisy data that other tools often overlook has enhanced our in-house research and saved us a considerable amount of time we would otherwise spend managing all of this data.”

Auquan, which had previously raised $1 million in a pre-seed round, said it will use the new funds to accelerate the development of its Intelligence Engine and grow its market presence in the U.S.

Image: Auquan