AI lifts the veil on private market investing

Danna, an AI-powered investment copilot developed in Abu Dhabi, is set to disrupt the multibillion-dollar private market investment management industry

LAST MONTH, with my colleague Dr Hasanat Dewan, I presented a new investment prediction product to potential customers and investors in Abu Dhabi. My phone has not stopped ringing.

Global asset management revenues are on track to reach more than $620 billion in 2027, according to PwC, with private market investment fees rising to almost half of that huge amount as investors turn increasingly to the private markets where much of the modern world’s wealth is made.

That’s why OurCrowd has spent the past two years in a $40 million partnership with the Abu Dhabi Investment Office to build an AI-powered private investment copilot based at the Abu Dhabi Global Market (ADGM).

Private market investing, by its very nature, is opaque. There is little information on financials, audited valuations or even news available about private companies, who are usually under no obligation to file documents or make announcements, unlike corporations listed on the public markets.

Exit potential

Danna, an AI copilot for private market investing created by Integrated Data Intelligence, an OurCrowd subsidiary based in Abu Dhabi, lifts the veil on private companies by collecting vast amounts of data and utilizing AI to structure, aggregate, learn, and validate usable information and insights at massive, automated scale. The result is a platform that professional investors can use to analyze individual private companies, predict their growth trajectory, future valuation, market success and exit potential, and generate gold standard investment memos covering company-level details alongside information about the relevant market, sector, technology and competition.

In early July, I travelled to Abu Dhabi to put Danna through its paces in a live demo for 17 potential customers and investors. We illustrated its capabilities by displaying its findings on Wiz, an Israeli cloud security company that was an unlikely candidate for an exit since it had raised $965 million at a valuation of $12 billion barely weeks before. However, Danna’s dashboard on Wiz suggested it was likely to be an exit target at an even higher valuation. My audience was somewhat bemused. Maybe I was, too. Days later, The Wall Street Journal reported that Google had offered $23 billion to acquire the company.

That’s when my phone started ringing.

For decades, investors and advisers in the public markets have been able to access large amounts of curated, real-time information and insights on companies and other investment assets through a Reuters or Bloomberg terminal. However, most private market tools have focused on data, falling short on the analytics and deep insights necessary to support high-quality investment decisions.

Until now.

We have seen AI disrupt a series of industries and sectors – including healthcare, financial services, cybersecurity, drug discovery, video, photography and written content creation. I believe that the debut of Danna – Arabic for “precious pearl,” a homage to the founding economy of Abu Dhabi – represents an inflection point at which AI is about to disrupt the professional private market investment industry.

Proprietary data

AI, combined with machine learning using a massive proprietary data layer, has enabled Dr Dewan and his colleagues to collate, sift and analyze unstructured data on private companies from thousands of sources. That data is then used to train an array of proprietary, in-house deep neural networks and statistical models, as well as fine-tuning commercial large language models, to generate output that is accurate, unique and free of hallucinations.

Dr Dewan, who previously led FinTech innovation and data science teams at Morgan Stanley, Deutsche Bank, Merrill Lynch, Russell Investments, and E*Trade, has recruited a world-class team of AI experts who have built more than 5,000 live data pipelines ingesting more than 45,000 structured and unstructured data sources every day, structuring in excess of 4 billion private market datapoints on a daily cadence.

“We have created a predictive AI engine for the private market, employing cutting-edge AI tech,” Dewan says. “This is a new and efficient way for investors to prospect, discover, analyze, and decide on a diverse range of global investment opportunities.”

“We only have a small team of highly trained AI and data professionals in our company, but we aggregate the data at internet scale, using automation and AI, enabling a handful of people to create data pipelines faster and more efficiently than those built using conventional methods,” he explains.

Money shot

Danna provides users with a sophisticated dashboard on each company, filtered by the user for sector, funding stage, exit potential, valuation, and other parameters. A proprietary success score, based on a large set of input features and powered by AI, rates the likelihood that a company will exit via an acquisition or IPO with decent returns for investors.

It is, quite literally, the money shot for professional investors.

For example, a Danna search for a promising investment target creating picks and shovels infrastructure for AI starts with the entire database of millions of companies, narrows it to a few hundred startups in that sector, and ends with just three companies that are currently available for possible investment with a good chance of success. At the touch of a button, Danna will produce a full 35-page investment-grade memo on each company. That process, even if it were possible to locate and identify all the information, would otherwise take weeks.

“Our competitors mainly provide just data, perhaps with some simple inference capabilities. We have a massive proprietary data plant supporting higher order functions, deep AI inference, analytics and explanations – and even the ability to incorporate privileged data not generally available into the predictions and reports,” Dewan says.

Potential customers checking out Danna include VCs, corporate development teams, family offices, large angel networks, global financial services and consulting firms, wealth management and advisory firms, and sovereign wealth funds.

Wiz rejected Google’s $23 billion offer. Danna expects the company to continue its success. This is the first time we have discussed Danna and its potential in a public forum. I doubt it will be the last.

About ‘Investors on the Frontlines’

I’m the CEO and Founder of OurCrowd, the global equity investment platform that gives individual accredited investors access to private market startup deals alongside top-tier VCs. If you are an investor, private family office or financial advisor, subscribe here for my biweekly commentary or follow me on Twitter. I welcome your comments in the response section below.