Bedrock AI is on solid footing after obtaining a $1 million seed round that closed in mid-September.
Investors in the AI company included the former CEO of Morgan Stanley Fund Services, Seth Weinstein; Born Capital; Activation Venture Fund; Good News Ventures; and Sophia Collier, who founded Citizens Advisers Inc., a mutual fund management company that was sold in 2008.
Bedrock AI noted there are other investors in the round but did not disclose the full list.
The startup applies natural language processing, machine learning and computational techniques to process corporate disclosures, enhance regulators’ supervisory processes and assist businesses with corporate risk analysis.
Bedrock AI plans to use the money to invest in backend infrastructure in its technology.
The company claimed the new funding gives it a $15 million valuation.
Bedrock AI co-founder, CEO, and lead developer Krista Bennatti said the startup’s solution is designed to address information overload in finance, and extracts information that could indicate or predict things buried in reports, such as risk.
“The average annual report is longer than Shakespeare’s Hamlet,” Bennatti said. “There’s just an overwhelming amount of information. Because there’s so much information the stakeholders that need to read and understand this just physically don’t have the time or capability to read everything in depth.”
Bennatti said that Bedrock AI’s research shows that the market ends up missing a lot of information for a long period of time, “partially because very few software solutions exist to help human beings process the information.”
The startup launched its product commercially in April. Bennatti claimed Bedrock AI serves hedge funds and institutional investors with $30 billion in assets under management. She said her clients “are very respectable names,” but that she could not disclose who they are.
In July, the Ontario Securities Commission (OSC), the Autorité des marchés financiers (AMF), the Alberta Securities Commission (ASC), and the British Columbia Securities Commission (BCSC) announced that Bedrock AI was selected to participate in a cross-border testing initiative supported by 23 regulators across five continents, as part of the Global Financial Innovation Network (GFIN).
Currently chaired by the Financial Conduct Authority (FCA), the GFIN consists of more than 70 international organizations committed to supporting financial innovation in the interests of consumers.
The cross-border initiative will give Bedrock AI the opportunity to simultaneously test and scale innovative products or services in multiple jurisdictions, while also gaining insights into how its business might operate in these markets.
The GFIN received 38 applications from participating regulators across five continents. Two firms, including Ontario-based Bedrock AI, successfully completed joint testing plans with selected regulators. Bedrock AI will begin testing its business model later this year.
Bennatti, Heather Judd, and Suhas Pai, a group of chartered professional accountants and machine learning researchers, founded Bedrock AI in 2019. Up to that point, Bennatti had been working as a data scientist at a corporate advisory firm. “When I quit my job to found the company we didn’t have any funding whatsoever,” Bennatti said. “I hadn’t written a line of code.”
Pai, a machine learning researcher in Toronto, joined Bennatti full time in 2020 as Bedrock AI’s CTO, and the pair spent a year using computational methods and machine learning to process complicated financial texts.
Currently, Bedrock has five staff members. In August, the company took part in the Y Combinator Summer 2021 Demo Day, the Silicon Valley accelerator’s 33rd to date, as well as YC’s startup school, which included an investment of $125,000.
Asked about the company name, Bannatti laughed: “Because none of my friends would let me call it Mega-AI,” adding, “the idea in finance is you just come up with the most boring name possible. [We’re] just continuing with that high-trust, low-interest naming.”
Bennatti laughed again when asked whether Bedrock AI faced any challenges. “Yeah, of course,” she said. “We’re an early stage startup. Of course there’s challenges.”
Bedrock AI’s software is currently built to serve expert forensic analysts, but according to Benatti the company needs to make its results more understandable and useable to all financial analysts, even if they don’t have the expertise.
The company needs to accomplish that “in order to achieve the really big dreams we have,” said Bennatti.
