AlphaSense, the market intelligence search engine, is building toward an initial public offering that could take place in roughly two years, according to investors and advisors who follow the company.

The New York City-based financial technology firm has doubled revenues over the last couple of years driven by growing demand for its artificial intelligence-powered products. In April, AlphaSense announced it surpassed USD 200m in annual recurring revenue.

“They are blowing the doors off” of investor expectations, one venture capitalist remarked.

It is important that AlphaSense reach profitability for it to launch a successful IPO, the VC and a second late-stage venture investor said, which aligns with the two-year horizon. The company will also need to diversify its client base, the second investor said, while continuing to grow with a similar velocity for it to be a strong IPO candidate.

The sources said AlphaSense has yet to appoint global coordinators or other external advisors for an IPO.

AlphaSense declined to comment.

Comparable public companies include FactSet Research Systems [NYSE:FDS] and Thomson Reuters [NYSE:TRI], according to two sector advisors. FactSet’s stock is up about 5% year on year, while Thomson Reuters’ stock is up 28% during that time. Alphabet [NASDAQ:GOOG] is a wider comp since Google and AlphaSense are both search engines, the first advisor added. Alphabet’s stock has risen 39% YoY, reaching all-time highs in 2024, fueled in part by investor enthusiasm for AI.

AlphaSense leverages AI to scrape public filings, analyst notes and other documents to compile data that is widely used by many of the world’s leading financial institutions. It is an attractive equity story for investors since they are familiar with its products, the first VC noted. Its early adoption of AI has made it a market leader, adding to its favorable equity story, he added.

A critical question is how quickly other platforms leverage AI models for their own use cases, the second investor said. Arguably, financial AI models can become more commoditized over time, but this is the right window of opportunity to start establishing a significant market position, he noted.

Last summer, AlphaSense raised USD 150m in growth capital at a USD 2.5bn valuation. Since its inception in 2011, the company has raised about USD 630m in total capital, the investor said. Its backers include BOND Capital, Alphabet’s CapitalG, Goldman Sachs and Viking Global.

With a revenue multiple of roughly 12.5x, the valuation seems reasonable, the investor continued. It should be able to launch an IPO at a similar or greater multiple, he said.

Still, AlphaSense will need to demonstrate it is uniquely differentiated from its peers, he added.

The company has a consolidator profile and could pick off a competitor or two before an IPO, the first sector advisor said. AlphaSense acquired corporate research platform Sentieo in 2022, and it purchased Stream, a provider of expert interview transcripts, in 2021.

In an interview last summer, President and Chief Revenue Officer Kiva Kolstein told Mergermarket AlphaSense opportunistically looks for bolt-on buys to enhance its technology and content.