Investment research, a traditionally labor-intensive process, is undergoing rapid transformation as companies from established trading platforms to small startups deploy artificial intelligence agents to analyze financial data, identify market trends and draft reports for investors and institutions.
What to Know:
- AI agents are now being deployed across financial services to automate investment research, with applications ranging from retail investor tools to institutional-grade analysis
- New York has emerged as the epicenter for this trend, with startups like Hebbia and Rogo attracting hundreds of millions in venture funding at valuations up to $700 million
- While regulatory hurdles initially slowed AI adoption in fintech compared to other industries, the technology is now moving beyond back-office operations into core financial services
The Race to Build Smarter Financial Tools
Unlike other business sectors where artificial intelligence quickly gained traction, fintech applications have adopted AI more cautiously due to regulatory and compliance requirements associated with handling financial assets, says Jeff Cauflin, a Forbes senior editor.
Until recently, most fintech AI features concentrated on streamlining customer service, accounting and back-office functions, with companies like Klarna, Chime, Stripe and Ramp announcing such products.
A new phase is now emerging. Trading app Robinhood and Arta Finance, a startup positioning itself as a digital "family office" for wealthy consumers, have both unveiled consumer-facing AI features in recent weeks. Meanwhile, a growing cluster of New York-based companies including AlphaSense, Hebbia, RavenPack and Rogo are developing AI tools specifically for investment bankers and institutional investors.
Most of these companies employ AI agents – specialized code that interprets contextual information, makes logical decisions and takes action. The agents perform complex tasks such as generating investment recommendations, analyzing private market data, or creating presentation drafts.
"How do you want to compare all these different providers, the startups and the hyperscalers that have done this?" explains Gabriel Stengel, 26-year-old CEO of Rogo, describing how their system helps bankers create acquisition target presentations.
While the venture capital enthusiasm for AI companies makes it challenging to determine which businesses will develop sustainable models, they all target inefficiencies in research processes that have long been overdue for improvement.
Startups Attract Major Funding for Financial AI
Hebbia, a five-year-old New York company using AI to accelerate research for financial institutions and law firms, secured $130 million in funding last year, reaching a $700 million valuation. The company counts Index Ventures, Peter Thiel and Andreessen Horowitz among its backers.
According to 27-year-old founder and CEO George Sivulka, Hebbia specializes in analyzing private market data. When companies prepare for financing rounds or potential acquisitions, they share confidential information in secure virtual data rooms. Hebbia's software connects to these repositories and assesses factors like customer concentration, revenue growth strength and management qualifications.
"It also aims to identify risks and red flags like how exposed the business might be to tariffs, or whether a topic was glossed over or omitted in an investment pitch even though it's typically covered," Sivulka said. The company claims its products save private equity firms between 20 and 30 hours per deal.
Hebbia combines proprietary models for retrieving and interpreting investment data with external models from companies like OpenAI and Anthropic for features such as report generation. Sivulka reports having hundreds of customers, including private equity firm Charlesbank and private credit firm Oak Hill Advisors, with service fees ranging from "tens of thousands" to "millions."
AlphaSense, a more established 14-year-old financial data company with 6,000 customers, has developed similar AI agent capabilities. It helps analysts prepare pitches, conduct due diligence and analyze markets. For example, it can generate research suggesting a corporate executive's top priorities or create reports based on expert testimony indicating investor concerns about upcoming IPOs.
Rogo, a three-year-old New York startup with 40 employees and customers, was recently valued at $350 million in a March fundraising round supported by investors including Thrive and Khosla Ventures. The company's system can automate earnings summary reports for investment banking analysts and help create acquisition target presentations.
The 40-person company has more than 5,000 active end users according to Stengel. Like its competitors, Rogo combines proprietary models trained to "think like an investor" with external models from Google, Meta, Anthropic and OpenAI for specialized functions.
RavenPack, a 22-year-old New York firm whose core business involves analyzing news and regulatory filings to identify market-moving events, recently announced new AI features aimed at a broader audience. Through Bigdata.com, analysts can create stock watchlists that generate daily automated research reports. The service offers a free tier with limited data sources and a premium subscription starting at $50 monthly.
"The number of new companies popping up in this space is hard to keep track of," said Armando Gonzalez, RavenPack's CEO, noting that clients include major financial institutions like JPMorgan, Morgan Stanley, Deutsche Bank and Nomura.
Other emerging players include BlueFlame AI, which helps alternative asset managers leverage generative AI, and smaller startups with fewer than 20 employees such as AgentSmyth, BrightWave, Finster AI, ModelML and ProSights.
AI Features Reaching Retail Investors
The technology is also reaching retail investors. Robinhood recently announced Cortex, an AI tool scheduled for release later this year as part of its premium Gold service. The feature will produce automated stock reports and suggest trading ideas, making "the options trading experience more intuitive by helping you translate your beliefs about a stock into a specific options trade and strategy," according to a company statement.
Arta Finance has unveiled Arta AI, planned for launch in "mid-2025," which will offer personalized investment suggestions and answer portfolio performance questions. Subscriptions will start at $20 monthly, with the service provided free to customers managing over $100,000 through Arta.