Exclusive: AI financial research startup Brightwave raises $6M

Brightwave, which is building an AI-powered research assistant for financial analysis, raised $6 million in seed funding, founder Mike Conover tells Axios exclusively.

Why it matters: The company's proprietary technology brings together information from a wide range of sources to provide detailed financial analysis to RIAs and hedge funds.

Context: Before founding Brightwave, Conover built Databricks' open-source large language model (LLM) Dolly.

• His co-founder, Brandon Kotara, was formerly the CTO of cloud-based derivatives exchange and clearing house LedgerX.

How it works: Brightwave enables users to obtain detailed financial reports and analyses by typing in a query into its platform.

• The system provides a high-level executive summary, a bulleted list of relevant points, and links to underlying data sources and documents individual details are drawn from.
• "Brightwave reports are living documents that you can interact with ... and get very granular details on demand on any finding or insight that catches your attention," CEO Mike Conover says.

Behind the scenes: Data sources include breaking news, SEC filings, earnings call transcripts, sell-side research, market data, and long-tail material from the public internet.

• "Drawing connections between... research findings is extremely time-consuming and labor intensive, and there's a risk of missing something," Conover says.
• "From a working memory standpoint, these models eclipse what a person is able to keep in mind simultaneously," he adds.

State of play: While operating in stealth, the company signed up customers with assets under management totaling more than $120 billion. These clients ranged from owner-operated RIAs to $20 billion crossover hedge funds.

• Investment research teams leverage Brightwave to analyze specific sectors and equities, perform due diligence on private market opportunities, and develop investment theses.
• Meanwhile, wealth managers use Brightwave to create insightful market commentary on topics that drive buying decisions.

Zoom in: Decibel Partners led the seed round and was joined by Point72 Ventures, Moonfire Ventures, and angels from companies such as OpenAI, Databricks, Uber and LinkedIn.