Tegus, an AI research startup valued at $3 billion in 2021, is nearing a deal to sell itself to AlphaSense, according to five banking and venture capital executives. Although the financial terms have not been disclosed, the combined valuation of the companies will be approximately $4 billion, one VC executive noted.
Tegus has been on the market since last fall after hiring advisors, one banker stated. Based on the combined company valuation, Tegus’s sale price is estimated to be around $1 billion, though this figure is unconfirmed.
It is unclear whether the negotiations began before or after AlphaSense filed a patent infringement lawsuit against Tegus in September. In the lawsuit, AlphaSense alleged that Tegus’s platform user interface was strikingly similar to its own in purpose, functionality, and aesthetics, accusing Tegus of infringing on seven AI-related patents. The litigation was resolved on May 8, but no details were provided, according to a redacted stipulation and proposed order staying the case.
“Tegus has been available for some time,” the banker mentioned.
Both Tegus and AlphaSense declined to comment.
AlphaSense and Tegus are competitors, serving similar markets. Tegus, founded in 2017 by twin brothers Michael and Thomas Elnick, provides market intelligence and data to financial services companies, including investment firms, banks, and consultancies. Over 2,500 asset management firms use Tegus, which has raised $111.5 million in funding. In 2021, Tegus achieved a $3 billion valuation after raising $90 million in a round led by Oberndorf Enterprises and Willoughby Capital.
AlphaSense, established in 2011 by CEO Jack Kokko and CTO Raj Neervannan, combines AI with company research. According to an April Fortune report, AlphaSense has more than 4,000 corporate customers, including over 80% of the S&P 100. The New York-based firm has raised $770.1 million, with investors including Goldman Sachs, CapitalG, and Bond. In September, AlphaSense was valued at $2.5 billion after raising $150 million.
A private equity executive described the valuations of both companies as “very silly.”
Operating in the “expert network” sector, which was pioneered by the Gerson Lehrman Group nearly 20 years ago, these companies provide expert consultations for investment firms entering new sectors. For instance, a VC looking to invest in medical devices might use Tegus or GLG to arrange calls with doctors or industry executives. Tegus records these calls, creating transcripts stored in an online repository for other customers to access, with names of customers and employees removed as per the company’s terms of use. As of April, Tegus’s library contained over 100,000 expert transcripts.
