Our $19 Million Series A Round: What It Means For Sentieo and the Future of Financial Research Software

sentieo

 

By Alap Shah, CEO @ Sentieo: On behalf of the entire Sentieo team, I’m proud to announce that Sentieo has secured $19 million in Series A funding. We are thrilled to have Centana Growth Partners leading the round, and we couldn’t be more excited to welcome Eric Byunn to our board of directors.

This milestone caps 18 months of accelerating momentum at Sentieo, driving a tripling of our client base to 700, a doubling of our global headcount to 160 and the release of the Sentieo Notebook / RMS (Research Management System) for collaboration. While we’re certainly celebrating today’s milestone, fundraising is merely a means to our ultimate end- accelerating human productivity and collaboration in the financial space.

We’ve come a long way from our earliest days, when my brother Naman and I began building tools to improve my own research productivity in running our family office portfolio. Working with our early engineering team, I remember being struck by the huge and immediate performance boost I experienced when I was delivered search and analytics software that was custom built for my workflow. This new capital will help accelerate our R&D spend and go-to-market strategy to help us deliver this same productivity boost to more financial decision makers globally.

The pace of change continues to accelerate in the financial industry, with increased regulation, continued shifts to passive and quant strategies and shrinking trading commissions / fee pools. In our experience, the most important underlying change is the relentless explosion in data available to inform decisions. Beginning with the internet and accelerating with mobile, cloud and now AI, data is multiplying, together with the opportunity for insight. There is a prevailing narrative across industries including finance that algorithms are best equipped to generate this insight, translating to a growing loss of human jobs.

We see things a bit differently from our unique vantage point. AI and related technologies such as Natural Language Processing (NLP) are best at performing repetitive, trainable processes. In our world we use AI and NLP to help researchers take away the monotonous work of extracting financial data from tables, finding key management commentary in a transcript or alerting a user to changes in a company’s risk factors disclosures. Using our tools, analysts can drastically increase their speed and coverage without sacrificing the depth and accuracy of their work, freeing them up for more meaningful work that only humans can do. Getting out from behind their desks, researchers can visit more management teams, attend more industry conferences and spend time cultivating unique data sources to develop differentiated viewpoints on markets and industries.

Finally, as the stakes go up and the number of data inputs increase, finance continues to become more of a team sport. Our work with increasingly matrixed organizations with diffuse knowledge and skill sets has underscored the unique challenges in bringing an organization’s best thinking to bear in driving decisions. This institutional knowledge management and collaboration function is a uniquely human act that can’t be matched by machines. Sentieo’s Notebook / RMS is custom designed to enable humans and software to work seamlessly, automating knowledge sharing, cataloguing decision points, leaving a clear audit trail and allowing concise measurement of outcomes. The results are clear- better visibility, accountability and performance.

To see how Sentieo can make you Superhuman, simply go to Sentieo.com and sign up for a free trial. If you would like to receive content related to topics of interest in the markets, don’t forget to subscribe to the Sentieo Blog so that we can notify you of new posts by email.

Save Time Analyzing Off-Balance Sheet Commitments with Sentieo

Not all contractual obligations that result in cash outflows are listed in a company’s balance sheet. Looking purely at debt figures leaves an incomplete picture of future funding needs. In this blog post, we will find and visualize these liabilities in several examples across industries. While most analysts are very familiar with common items like operating leases and post-retirement healthcare liabilities, here are a few other items that we found.

We compiled these using the search term “Contractual Obligations” in Sentieo’s Document Search, and then built a Time Series chart using the Sentieo Time Series function to export from the 10-K or 10-Q. Lastly, we displayed the data in Sentieo Plotter.

Netflix: The online streaming hegemon has over $18 billion in future content liabilities. That’s a lot of binge-watching! The number has been growing steadily every quarter. Public chart viewer: http://snt.io/3YEv9pLtK

Nike: The dominant athletic footwear and apparel maker is known for its high-profile athlete endorsements. But these contracts do not come cheap; Nike’s 10-Ks show a growing off-balance sheet liability, now at over $10 billion. Public chart viewer: http://snt.io/aeEv9rCv9

Waste Management: The leader in waste management has over $3 bn (and growing) in environmental-related liabilities around the closure of garbage facilities at the end of their useful lives. Public chart viewer: http://snt.io/rcEv9sR9C

Vulcan Materials is a large supplier of aggregates (like sand and crushed stone) to the construction industry. We plotted the mineral royalties that they expect to owe to the property owners of the sites that they operate. Public chart view link: http://snt.io/fNEv9srx4

Valero, a large oil/petrochemical refiner, has over $30 bn in purchase commitments, mostly crude oil. The numbers have stayed fairly steady over the last 10 years. Public chart viewer: http://snt.io/EgEv9vTXr

Finally, our favorite find: Deckers Outdoor Corporation. This parent company of the UGG brand has purchase commitments for (you guessed it!) over $100 million dollars of sheepskin. This is a new disclosure; only two 10-Ks have it, so we are not showing a bar chart.

Sentieo Guide: Quick Tips For Starting a Hedge Fund

Chances are that you’ve thought about starting your own hedge fund. Perhaps you’ve felt an entrepreneurial pull, have an investment strategy in mind, or know a team of people with a similar goal.

Below, we’ve compiled a list of some of the best guides we’ve found online.

 

Resources:

Business Insider

Investment Law Group

Grant Thornton / Stonegate Capital Partners

Hedge Fund Law Blog

Investopedia

Vanity Fair

Mergers and Inquisitions

HFM Global

Hedge Fund Seeders

Hedge Fund Technology

Hedge Fund Law Firms

 

If you’d like to download Sentieo’s full, comprehensive guide that pulls together the best advice from all of these sources —  including legal advice, raising capital, office space, building a team, and more — download the full whitepaper.

Here are the topics that the guide covers:

  • Fund Structure
  • Raising Capital
  • Building a Team
  • Legal Considerations
  • International Considerations
  • Office Space
  • Technology Stack
  • Naming the Hedge Fund

 

“Pumpkin Spice” season starts earlier than ever, and is bigger than ever (at least on the internet)

Do you ever feel like Pumpkin Spice season seems to start earlier and earlier? Well, it’s true. It’s also bigger than ever — at least in Search.

Sentieo’s Mosaic pulled ten years of “pumpkin spice” search data, and we see some clear trends. Pumpkin spice season was typically off to a slow start, building up to a spike around Thanksgiving in late November (and we see the late November spikes on different days as Thanksgiving moves around).

We also see that over the last ten years, the pumpkin spice season has been starting earlier, and search volume in September/October has started to dwarf the previous peak around Thanksgiving. Finally, the pumpkin spice volume peaked in early September this year!

We are also seeing the term “pumpkin spice” appear across corporate communications: press releases, transcripts, and presentations. Using Sentieo’s thematic search, we looked for “pumpkin spice” across all corporate communications. We see a range of pumpkin spice products from Dunkin, Coca-Cola, IHOP, and even a pumpkin spice Baileys coffee liquor from Diageo.

And, of course, the 800-pound pumpkin spice gorilla is Starbucks: the company announced in a tweet that its legendary pumpkin spice latte is back on August 28th. Below, we used Sentieo’s Plotter to look at the frequency of pumpkin or PSL mentions from the Starbucks Twitter account.

Interactive chart

Locating Transaction Comparables in Fairness Opinions with Sentieo

A fairness opinion is a report, usually created by an investment bank, showing that a contemplated strategic transaction (such as a merger) is fair to the shareholders who are represented by the company’s Board of Directors. A fairness opinion will typically contain carefully researched and adjusted trading and transaction comparables.

Fairness opinions are used by buyside and sellside analysts to analyze transaction multiples and trends. They are used by activist investors who might feel that the target is undervalued and look to exercise their appraisal rights in court. In a similar fashion, securities litigation specialists might look at the documents while seeking compensation on behalf of shareholders. Finally, fairness opinions are looked at by corporate M&A/development professionals who monitor their own or adjacent industries.

Fairness opinions are usually rendered after the transaction has been announced, and they are filed with the SEC. However, a merger or an acquisition typically creates a deluge of filings from both parties, making locating this important document time-consuming, as there is no special SEC form for fairness opinions.

Sentieo users save time locating fairness opinions in seconds. Sentieo can also locate fairness opinions for companies that no longer trade. Here we show two examples: the pending deal between ConAgra Brands and Pinnacle Foods, and the acquisition of LinkedIn by Microsoft from a few years ago.

Pending deal between ConAgra Brands and Pinnacle Foods:

Acquisition of LinkedIn by Microsoft: