PARIS, January 28, 2021 — SESAMm, one of the leading providers of analytics and artificial intelligence solutions for investment professionals and enterprises, has concluded a Series B funding round for over €7.5M led by the Fintech VC fund of NewAlpha Asset Management and global investment firm The Carlyle Group (NASDAQ: CG).

The investment is intended to accelerate SESAMm’s global growth, allowing it to acquire talent and expand operations in Europe, Asia and North America. Plans for the funding also include developing AI-enabled research tools and dashboards for corporate customers, as well as continuing R&D investment in its Machine Learning and Natural Language Processing tools.

SESAMm will also extend its reach and address new market segments and use cases, including private equity sourcing and portfolio monitoring as well as Environmental, Social and Governance (ESG) investing and risk screening.

SESAMm’s sustained performance and this new funding confirm its leadership and technological edge in AI and alternative data for the investment management sector. SESAMm’s CEO and Co-Founder Sylvain Forté’s shares his confidence in the company’s future:

“We understand our customers’ needs and challenges in using Big Data and AI effectively in the investment process. We launched our products TextReveal and SignalReveal to provide clients with relevant and actionable data and models, and plan to continue to improve these products in terms of speed, features, and addressable use cases as we did with our ESG monitoring analytics”.

“We’ve been very impressed with the market traction SESAMm has gained in the last few years” said Lior Derhy, Managing Partner at NewAlpha Asset Management. “SESAMm’s cutting-edge technologies and analytical tools have proven their effectiveness in meeting financial institutions’ market needs.”

As one of SESAMm’s major clients, Carlyle quickly moved from pilot to scale and has had access to the company’s innovative alternative data solutions since the start of 2020.  

“Expanding our partnership with SESAMm builds on Carlyle’s continued leadership in leveraging big data, data science, advanced analytics, and machine learning to further differentiate our investment platform,” said Matt Anderson, Chief Digital Officer and Managing Director at The Carlyle Group. “We look forward to continuing to work with SESAMm to provide additive insights for our deal sourcing, diligence, and to help guide our portfolio companies in value creation.”

Havenrock, AngelSquare, La Caisse d’Epargne, BPI, and Banque Populaire, all early investors in SESAMm, are again participating in this funding round.

“We are particularly pleased to see SESAMm grow steadily and acquire new clients in the US, Europe, and Asia. They have been able not only to adapt but to grow in these difficult times. Their next steps are now focused on scaling, recruiting, and most of all expanding internationally,” said Omar N. Barakat, President of Havenrock.

Located in Paris, New York, Tokyo, Tunis and Metz (France), SESAMm works for a large array of blue-chip clients including large asset managers, banks, and hedge funds to identify opportunities in both fundamental and quantitative investment strategies. The company recently welcomed Dale Richards (previously President of Enterprise Data Management at Sungard and board member of Quandl) and Jonathan Neitzell (former Chief Data Officer at Goldman Sachs AM) as new board advisors, joining Mark Garbin (Independent Director, US Funds) in supporting SESAMm’s strategic decision-making and market expansion in North America.

About NewAlpha Asset Management

‍Globally recognized as a leading investor in Emerging Manager investing, NewAlpha sources, analyses, selects and supports innovative investment funds and high potential Fintechs. NewAlpha offers its institutional clients a wide range of tailor-made products and services in the areas of Private Equity and Absolute Return strategies. In 2015 NewAlpha launched a Private Equity investment activity specializing in technology-driven sectors including Venture Capital (primarily FinTech, Insurtech and AMtech) and Growth Equity (TMT, health and industrial niches).

Regulated by the Autorité des Marchés Financiers (AMF), NewAlpha Asset Management is a subsidiary of La Française AM (Crédit Mutuel Nord Europe group)

For more information: www.newalpha.com

About The Carlyle Group

‍The Carlyle Group (NASDAQ: CG) is a global investment firm with deep industry expertise that deploys private capital across three business segments: Global Private Equity, Global Credit and Investment Solutions. With $230 billion of assets under management as of September 30, 2020, Carlyle’s purpose is to invest wisely and create value on behalf of its investors, portfolio companies and the communities in which we live and invest. Carlyle employs more than 1,800 people in 30 offices across six continents. Further information is available at www.carlyle.com.
Follow Carlyle on Twitter @OneCarlyle.

About SESAMm

‍Founded in 2014, SESAMm is an innovative company specializing in big data and artificial intelligence for investment. Its team builds analytics and investment signals by analyzing billions of web articles and messages using natural language processing and machine learning. With its NLP platform TextReveal and its quantitative data science platform SignalReveal, SESAMm addresses the entire value chain of alpha research. SESAMm’s 50+ person team in Paris, New York, Tokyo, Tunis and Metz (France) works with major hedge funds, banks and asset management clients around the world for both fundamental and quantitative use cases.

For more information: www.sesamm.com

SESAMm

‍Malik Senouci
Head of Marketing and Communications
press@sesamm.com

New Alpha Asset Management

Lior Derhy
Téléphone: (+33)1 73 00 73 19
lderhy@newalpha.net

The Carlyle Group U.S.

‍Brittany Berliner
Phone: +1 212 813-4839
brittany.berliner@carlyle.com  

EMEA

‍Andrew Kenny
Phone: +44 7816 176120
andrew.kenny@carlyle.com

In private equity, as in most industries, decision-making counts on accessing accurate and valuable information. However, these firms often encounter significant challenges when sourcing reliable data, especially when dealing with small, private companies. This article dives into the complexities of identifying high-quality information on smaller companies and underscores its value in investment decisions, operational efficiency, and risk management. It also explores how advanced artificial intelligence (AI) technologies are revolutionizing the identification of these risks, leading to higher rewards and more secure investments, thus providing a competitive edge.

The challenge of identifying valuable information for Smaller Firms

Lack of valuable data

Sturgeon's Law, which states that "Ninety percent of everything is crap (or noise)," becomes particularly relevant in the context of data sourcing. For private equity and investment firms focused on small companies, finding the golden nuggets of information amid the overwhelming amount of digital noise can be daunting. The data available on these companies is often sparse, fragmented, and difficult to uncover using conventional methods. This scarcity of reliable information makes it challenging for private equity firms to make informed decisions, heightening the risk of overlooking critical issues that could impact their investment process.

The difficulties extend beyond just locating information. Many small companies operate without a significant online presence or may not be required to disclose as much information as publicly traded firms. This lack of transparency can further blur critical data points. Furthermore, the data that is available is often unstructured, residing in various forms such as social media posts, obscure local news articles, or industry-specific reports. Extracting meaningful insights from these disparate sources requires sophisticated data processing capabilities, which traditional methods often lack. As a result, private equity firms are left with a significant challenge: how to separate valuable data from the noise without missing critical risk indicators, thereby optimizing their deal sourcing and investment strategies.

Diverse language and terminology

Smaller firms frequently face existential risks, and the potential rewards for identifying these risks early on can be significant for the private equity firms that invest in them. However, mainstream methods of risk identification often fall short, as these companies may not use standardized language to describe materiality. Instead, risks are discussed in varied and context-specific ways, complicating the task of recognizing relevant information. Therefore, it is essential to adopt a specialized approach that analyzes and decodes these firms' unique terminologies and business idiosyncrasies, ultimately translating them into a standardized language that can be effectively used in risk assessment.

The diversity in language is not just a barrier to risk identification but also to the communication of these risks within and between private equity firms. When a small firm uses industry-specific jargon or localized expressions to describe potential threats, it can lead to misunderstandings or underestimations of the actual risk. For instance, a manufacturing startup in a developing country might describe supply chain disruptions in terms that do not translate easily to a global investor’s risk framework. Additionally, cultural differences in how risk is perceived and reported can lead to further complications. This linguistic diversity necessitates the use of advanced natural language processing tools that can interpret data through a common lens while considering industry-specific contexts. For an insurance company, understanding financial models, insurance principles, and regulatory frameworks is crucial. Conversely, assessing risks for a beauty company requires a focus on product safety, consumer preferences, and market trends. By appreciating the specific contexts of each industry, private equity firms can better identify and evaluate potential risks, enhancing decision-making processes, risk and portfolio management strategies, and operational efficiency.

The dynamic nature of the industries themselves further complicates the challenge. For example, the tech industry evolves rapidly, with new risks emerging as technologies develop and consumer expectations shift. What might be considered a negligible risk today could become a significant issue tomorrow as regulatory landscapes, market conditions, and technological advancements alter the playing field. In contrast, industries like agriculture or real estate might have more stable risk profiles but are subject to sudden changes due to environmental factors or policy shifts. This variability across industries means that a one-size-fits-all approach to risk assessment is inadequate. Private equity firms must adopt flexible, industry-specific risk models that can adapt to the unique characteristics and evolving landscapes of the sectors they invest in, thus optimizing their AI capabilities.

The Power of AI in Enhancing Risk Management in Small Firms

AI technologies, particularly natural language processing (NLP) and machine learning algorithms, are important tools for private equity firms aiming to monitor and manage risks in small firms. These technologies can sift through vast amounts of data, extracting the valuable 10% and identifying patterns, trends, and subtle nuances in the language used to describe risks. By detecting these patterns, AI can reveal potential risks that might not be immediately apparent through traditional methods. This proactive approach to risk identification allows firms to address issues before they escalate, providing a more comprehensive and nuanced understanding of the risks facing small firms.

AI's ability to process unstructured data is particularly valuable in this context. Many of the risks that small firms face are discussed informally in places like social media, niche blogs, or local news outlets. Traditional risk management tools might overlook these sources, but AI-powered tools can analyze them in real-time, detecting emerging threats as they develop. Moreover, AI can cross-reference these insights with structured data from financial reports, regulatory filings, and other formal documents to create a holistic risk profile. This multidimensional analysis helps private equity firms not only identify risks but also understand their potential impact, enabling more informed, data-driven decision-making that enhances operational efficiency and competitive edge.

Beyond risk identification, AI also enhances risk mitigation strategies. By continuously monitoring data and learning from new information, AI systems can adapt to changing conditions, offering updated risk assessments that reflect the latest developments. This dynamic approach allows private equity firms to stay ahead of potential issues, making it possible to implement preventative measures rather than reacting to crises after they occur. In this way, AI capabilities contribute significantly to the optimization of risk management processes.

How SESAMm’s Advanced Technology Enhances Risk Assessment

SESAMm’s TextReveal® is at the forefront of this technological revolution, enabling private equity firms to efficiently navigate the vast digital landscape and extract the crucial information needed for informed decision-making. Through our proprietary data lake amounting to over 25 billion online articles with 15 years of historical data and our AI algorithms, TextReveal® can quickly identify and retrieve valuable insights, even when the information is deeply buried or highly specific. The tool's ability to analyze and understand the diverse language and terminology used in discussions about risks on the web empowers private equity firms to objectively assess the materiality of certain risks or identify emerging threats that have yet to be formally recognized.

TextReveal® goes beyond merely identifying risks—it categorizes them, providing context that helps private equity firms understand the severity and relevance of each risk. For example, if a small biotech firm is mentioned in discussions about regulatory hurdles, TextReveal® can determine whether these mentions are isolated incidents or part of a broader trend. It can also assess whether the language used suggests an imminent threat or a longer-term concern, enabling firms to prioritize their responses accordingly. Additionally, TextReveal® integrates sentiment analysis, which can gauge the overall tone of discussions surrounding a company, offering further actionable insights into potential reputational risks.

SESAMm has developed a proprietary metric – the Intensity Score, which calculates an event's relevance based on its news coverage and sentiment. It uses negative sentiment, article dispersion, and empirical ESG risk measures to determine how likely an article is to represent a high-risk controversy. The Intensity Score gives TextReveal users a clear understanding of which events require their attention.

Users can also opt to receive email alerts for the more severe controversies, ensuring they’re always aware of significant risks.
In addition to the severity, controversies are also categorized by risk and sub–risk type, making it easy to analyze specific areas of concern.

Moreover, SESAMm's platform is designed to be intuitive and user-friendly, making it accessible to investment professionals who may not have a technical background. This ease of use ensures private equity firms can quickly incorporate AI-driven insights into their risk management processes without a steep learning curve. By streamlining the data analysis process, TextReveal® allows firms to focus on strategic decision-making, confident they have a comprehensive understanding of the risks and opportunities associated with their investments and portfolio companies. This level of operational efficiency and optimization is key to maintaining a competitive edge in the fast-paced world of private equity.

TextReveal’s Risk Assessment module enables deep company and thematic research in multiple languages through on-the-fly keyword searches. Users have full access to articles, sentiment analysis, and trending topics to get a complete understanding of the risks. We’ve even developed an AI Text Summary feature that provides a quick summary of a selected article, saving time and enabling a faster analysis.

In summary, the integration of AI tools and natural language processing technologies is transforming risk management in private equity, particularly for firms dealing with small, private companies. By leveraging these advanced tools, private equity firms can enhance their due diligence processes, better monitor risks and controversies, and ultimately make more informed investment decisions that lead to higher rewards and operational efficiency.

Reach out to SESAMm

TextReveal's web data analysis of over five million public and private companies is essential for keeping tabs on ESG investment risks. To learn more about how you can analyze web data or request a demo, contact one of our representatives.

As 2024 comes to a close, I’m proud to reflect on SESAMm’s achievements and energized by the opportunities that lie ahead. This year has been a milestone for our growth, partnerships, and technological advancements, setting a strong foundation to tackle the challenges and embrace the possibilities of 2025.

Looking Back on 2024: Key Achievements

Strengthening Client Partnerships and Expanding Our Reach

This year, SESAMm welcomed an impressive roster of new clients, in particular working more closely with LPs such as Swen Capital, banks, and asset managers such as Natixis, alongside numerous mid-market asset managers and private equity funds. These organizations are turning to SESAMm for more control over their ESG data and access to granular controversy insights, reaffirming our role as a trusted partner in sustainable finance. We also launched impactful partnerships with Ramboll, ARX, FinGreen, and CybelAngel, among others, broadening our reach and capabilities.

Building a Stronger Team and Advancing Our Technology

Internally, we strengthened our team with strategic hires, including our first team member in Canada, to better support our clients locally. On the technology front, we achieved significant milestones: introducing new platform features, launching a comprehensive product documentation help page, and reaching the capacity to process nearly 30 billion documents—our largest scale yet.

Adapting to a Dynamic ESG Landscape

Globally, the ESG landscape was marked by notable developments. Europe focused heavily on CSRD compliance, while Asia advanced new ESG mandates and regulations in South Korea, Japan, and Singapore. Despite regulatory shifts in the U.S., SESAMm experienced strong growth in North America, demonstrating our ability to adapt and thrive globally.

Innovating with Generative AI

This year also saw the integration of generative AI into our solutions, reshaping how we deliver value to clients. Risk Reveal, for example, enables automated controversy report generation and real-time insights.

Looking Ahead to 2025: Rising to ESG Challenges

Embracing ESG Challenges

As we close out 2024, the momentum in ESG shows no signs of slowing down. With new regulations like CS3D and evolving global frameworks, companies face mounting demands to monitor not only their investments but also their supply chains while improving transparency across the board. SESAMm remains committed to enhancing its tools to meet these challenges, delivering faster, more actionable insights to corporate and investment clients alike.

Harnessing the Potential of AI

The evolution of AI presents a major opportunity. Advances in generative models will enable us to further increase the scale and quality of our data processing. Our focus will remain on refining interpretation and reporting capabilities, empowering clients to make smarter, data-driven decisions on millions of companies with minimal friction.

The year ahead will undoubtedly bring its share of challenges, but it also holds incredible potential for progress. SESAMm is committed to remaining at the forefront of ESG and AI innovation, helping businesses not only adapt to change but lead it.
None of this progress would be possible without the trust and collaboration of our clients, partners, and team members. Thank you for making this year a success. Together, we are shaping the future of finance and sustainability. Here’s to another year of growth, innovation, and positive impact in 2025!

Reach out to SESAMm

TextReveal’s web data analysis of over five million public and private companies is essential for keeping tabs on ESG investment risks. To learn more about how you can analyze web data or to request a demo, reach out to one of our representatives.