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BloombergGPT: The Game-Changing AI Model for Financial Research

Plus: The Fintech Companies in Y Combinator's W23 Batch

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🍿 Quick Snack

  • 🖥️ A new machine learning model called BloombergGPT could revolutionize financial research by generating SEC filings and market reports via a single prompt.

  • 🔥 Discover my top 3 fintech picks from Y Combinator's Winter 2023 Batch.

  • 🍟 Extra Fries: top 10 fintech female leaders, market conditions impacting valuations, a $16m fintech-focused fund in Egypt, and Indonesian fintech eyes US SPAC.

  • 🖤 +2 M&A Transactions

  • 💸 +7 Funding Rounds

🍔 The Full Meal

The ChatGPT of Finance: BloombergGPT

  • Bloomberg has developed a machine learning model, BloombergGPT, which applies AI techniques to financial datasets. The product could provide an entirely new way of doing financial research.

  • The model uses proprietary and curated datasets, including financial news, company financial filings, and press releases.

  • The Bloomberg data used for training spans from March 1, 2007 through July 31, 2022.

  • Training for the BloombergGPT model required approximately 53 days of computations run on 64 servers

  • BloombergGPT fragments its financial data source into 363 billion tokens by using a Unigram model.

  • The model is not available publicly and there is no API to access it.

Use cases include:

  1. generating an initial draft of an SEC filing

  2. summarizing a blurb containing financial content into a headline

  3. providing a company chart of an organization and linkages between an individual and multiple companies

  4. automation of generation of draft routine market reports and summaries for clients

  5. retrieval of specific elements of financial statements for specific periods via a single prompt

Meet the Game-Changing Companies of Y Combinator's Winter 2023 Batch

The YC Winter 2023 Batch was announced this week, and theres 27 fintech companies in the cohort. Here are my top 3 picks 👇

Note: I excluded crypto companies from this list, I will cover those on the next issue of Web3 Wednesday.

🥇 OneText: Frictionless payments via SMS

  • OneText is a startup disrupting SMS marketing and payments.

  • They aim to make every purchase as effortless as paying with your hotel room number.

  • In their first year, they have onboarded 50 fast-growing e-commerce brands and added as much as 14% in incremental revenue to their bottom lines.

  • The founders are Jonathan Fudem/CEO and Daniel Brain/CTO who met at PayPal Checkout where they designed and launched some of the world’s best checkout experiences.

  • The CMO of their largest customer, a $90M clothing brand, says they have revolutionized marketing for his company and are the best thing that’s happened to SMS marketing in forever.

  • OneText generated $597,000 dollars in payments in March and will book $50,000 dollars in revenue for April 2023.

🥈 AlphaWatch AI: AI copilot for hedge funds with trusted data

  • AlphaWatch AI is a research and analysis platform designed for hedge funds and private equity firms.

  • The platform uses custom LLMs, specialized embedding models, and integrates with trusted external data sources and secure private data.

  • AlphaWatch AI offers a reliable chat interface that cites its sources, saving financial professionals time on research.

  • The platform aims to solve a real pain point in disjointed data and high data costs for hedge funds.

  • While LLMs currently have limitations, AlphaWatch AI's efficient data integration and valuable insights enhance the way financial institutions access essential information and make informed decisions while maintaining data privacy.

🥉 Fluid Markets: Exchange to Invest in Company Earnings

  • Fluid is a futures exchange that enables direct investments in components that influence stock prices, without taking any market risk.

  • Investors can invest in earnings of a public company, but not the equity itself.

  • The exchange offers futures on fundamentals of public companies, such as revenue, earnings, and segments, among other fundamentals.

  • The exchange plans to solve the problem of investors losing money on trades despite being correct in their predictions about a component.

  • The founders of Fluid are experienced entrepreneurs who have worked in derivatives and securitization investment banking at Goldman Sachs and Barclays.

Want more? 👇

🍟 Extra Fries

  • 💪 Top 10 female leaders inspiring change in fintech. (Read More)

  • 🤨 What about $50m for a robo-advisor for dogs? Changing market conditions, including increased interest rates and inflation, will have a significant impact on the fintech industry. With less VC cash available, valuations of fintechs are becoming more realistic and VCs are asking more concrete and shorter plans to a profitable business. (Read More)

  • 🇪🇬 Africa is on fire. Egyptian VC firm Camel Ventures has launched a $16m fund focused on the country's fintech startup ecosystem. The fund, called Camel Ventures for Investment I (CVI), will provide both equity investments for early-stage startups and venture debt denominated in local currency for later-stage startups. CVI has already made 10 investments in various sectors, including Khazenly, Pharmacy Marts, and klickit. (Read More)

  • 🤔 Remember IPOs? Indonesian fintech startup DigiAsia Bios plans to expand to other Southeast Asian markets, including Vietnam, Cambodia, and the Philippines, after its merger with a special purpose acquisition company (SPAC) and Nasdaq listing. DigiAsia has secured a pre-money equity valuation of $500 million and will raise around $200 million after completing its combination with StoneBridge Acquisition Corporation. (Read More)

🖤 M&A Transactions

  • FEMSA, a Mexican conglomerate known for its Oxxo convenience store chain and Spin fintech service, has acquired NetPay, a Mexican fintech startup that provides payment services and solutions to micro, small, and medium-sized businesses. The acquisition will boost FEMSA's presence in the fintech and digital solutions markets. FEMSA's participation in NetPay dates back to 2019 when the company acquired a minority equity stake in the startup.(Read More)

  • Acorns, the American micro-investing platform, has acquired GoHenry, a digital banking startup focused on educating kids about money. The all-stock deal will see GoHenry become a wholly owned subsidiary of Acorns. GoHenry offers a spending card for children aged six to 18, linked to an accompanying money management app, and parents can track their kids’ transactions in real time and set spending limits or savings goals. (Read More)

💸 Funding Rounds

  • TerraPay | $100m Series B: mobile-first payments service that allows anyone, anywhere, to send money to a mobile number instantly (link)

  • Spring Free EV | $31m Series A + Debt: company aiming to accelerate the adoption of electric vehicles through innovative fintech products (link)

  • Soft Space | $31.5m Series B1: enable frictionless payments for customers in a simple and cost-effective manner (link)

  • Peach Payments | $31m Series A: payment solutions to online and mobile businesses (link)

  • Paymenow | $14m Debt: employee benefits platform that offers users early access to earned wages at affordable rates (link)

  • Finanzguru | $14.2m: AI-powered financial assistant that assists users in managing their accounts and contracts (link)

  • Finverity | $5m: supply chain finance platform for mid-market companies (link)

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