Banks invest $38m in Visible Alpha to combat MiFID II challenges

Visible Alpha, a startup helping analysts and fund managers cope with regulatory changes, has closed a $38m funding round. 

The round is led by Goldman Sachs with additional participation from Banco Santander through its VC arm, Santander InnoVentures, Exane BNP Paribas, Macquarie Group, Royal Bank of Canada and Wells Fargo. The company also landed capital from its existing investors, Bank of America, Citi, Jefferies, Morgan Stanley and UBS.

Founded in 2012 by Bank of America, Citi, Jefferies, Morgan Stanley and UBS, Visible Alpha is looking to transform the way Wall Street firms collaborate on research, financial models and other services. The company leverages machine learning and other advanced technologies to analyse and bring together data from analysts, providing tools to fund managers to help interpret it.

The business was launched in the run up to the second Markets in Financial Instruments Directive (Mifid II), which now means fund managers must now pay for research, rather than receiving it for free as an incentive to trade. In response to the legislation, leading banks are turning to technology solutions like Visible Alpha.

“We are pleased to lead this funding round for Visible Alpha,” said Darren Cohen, partner and global head of principal strategic investments at Goldman Sachs. “Visible Alpha has established its position as a market leader by helping the most sophisticated buy-side and sell-side firms solve their most pressing challenges related to research dissemination, entitlements, procurement and valuation. We look forward to participating in their continued growth and innovation.”

Back in November, Visible Alpha purchased London-based RegTech company Alpha Exchange in preparation for MiFID II. By adding Alpha Exchange’s advanced technology platform to its existing services, Visible Alpha created a ‘unified consumption and collaboration experience’ across research reports, analyst models and corporate access events backed by a robust compliance framework.

Earlier this year, ResearchPool, a digital platform for investment research, partnered with Invest Securities to launch a MiFID II-compliant solution to access reports and analysts. RegTech 100 company AQMetrics, a provider risk and regulatory reporting services across global regulatory regimes, also recently received authorisation to operate a MiFID II ARM. 

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