Increase Alpha Raises $3.5 Million In Seed Funding Led By Bartt Kellermann

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Increase Alpha secured $3.5 million in seed funding, marking its initial major capital raise to fuel product launch and market entry. The round was led by Bartt Kellermann, CEO of Battle of the Quants, a platform facilitating discussions among hedge fund managers and quantitative finance professionals. The investment targets the development and deployment of a proprietary AI-driven predictive signal engine for equity trading, emphasizing public data sources to generate uncorrelated alpha for institutional investors.

Increase Alpha is a Washington, DC-based fintech startup specializing in predictive artificial intelligence for institutional investment. Founded by Sid Ghatak, a former U.S. government AI policy advisor with over 25 years in building forecasting systems for entities like the White House, Federal Reserve, and London Stock Exchange, the company addresses gaps in traditional hedge fund alpha generation. Its core platform forecasts directional movements across more than 800 Russell 3000 equities, claiming 70% accuracy—exceeding the 52-55% industry benchmark—and 90% cumulative excess returns over the past three years, independently verified by AI analytics firm Zanista.

This seed round provides Increase Alpha with its first significant external capital, enabling a shift from research to commercialization. While full investor participation beyond the lead remains undisclosed in public announcements, the involvement of Kellermann signals strong validation from quant finance networks. No pre-money valuation was reported, but comparable AI fintech seed rounds in 2025 have averaged $4-10 million, suggesting a modest yet efficient raise for a pre-revenue startup.

Use of Funds and Outlook

Proceeds will primarily support go-to-market execution, including onboarding clients through pilots with top-tier hedge funds, building relationships with chief investment officers and portfolio managers, and scaling the AI engine’s integration without requiring internal data preprocessing. This positions Increase Alpha for rapid adoption in a competitive landscape, where AI tools promise to democratize high-accuracy signals while navigating regulatory scrutiny on public data usage.

Increase Alpha’s latest seed funding round represents a pivotal milestone for the Washington, DC-based fintech innovator, underscoring the growing convergence of artificial intelligence and institutional investment strategies amid a broader surge in AI adoption within traditional finance. The $3.5 million raise not only validates the company’s proprietary technology but also highlights its potential to disrupt alpha generation for hedge funds and asset managers. This analysis delves into the round’s structure, strategic implications, competitive positioning, and broader market dynamics, drawing on the company’s foundational research and performance metrics to provide a holistic view.

Background and Company Profile

At its core, Increase Alpha emerges from a multi-year research initiative aimed at bridging informational asymmetries in equity markets using publicly available data. Unlike alternative data providers that often introduce compliance risks and preprocessing burdens, the startup’s predictive AI platform delivers “ready-to-use” signals on day one, covering all sectors, market capitalizations, and regimes. This approach minimizes operational friction for trading teams, allowing seamless integration into existing workflows.

The leadership team is anchored by founder and CEO Sid Ghatak, whose extensive pedigree includes architecting the $3 trillion analytics platform for the London Stock Exchange and contributing to U.S. government AI frameworks, such as the AI Maturity Model. Ghatak’s experience spans governments, central banks, and Fortune 500 firms, positioning Increase Alpha with a unique blend of policy acumen and technical expertise. The company has already initiated pilots with several elite funds, demonstrating early traction in a sector where validation is paramount.

Performance claims further bolster the narrative: the engine reportedly achieves 70% directional accuracy across 800+ Russell 3000 stocks, generating 90% unique, uncorrelated alpha with just one-tenth the volatility of the S&P 500. These figures, backtested over out-of-sample periods and verified by third-party firm Zanista, suggest a robust edge in an industry plagued by diminishing returns from crowded strategies.

Funding Round Breakdown

The seed round, totaling $3.5 million, was led by Bartt Kellermann, CEO of Battle of the Quants—a convening body for hedge fund and quant professionals that fosters idea exchange and talent scouting. This leadership choice is telling, as it embeds Increase Alpha within influential networks, potentially accelerating client acquisition and strategic partnerships. Public disclosures do not detail additional participants, implying a lean, angel- or syndicate-driven structure common in early AI fintech raises. Absent valuation specifics, the deal likely reflects a pre-money figure in the $10-15 million range, aligning with 2025 benchmarks for similar U.S.-based startups leveraging AI for financial signals.

To contextualize, the table below summarizes key round parameters against recent AI fintech seed comparables:

These peers illustrate a vibrant ecosystem, with seed valuations climbing due to AI hype, though Increase Alpha’s emphasis on institutional-grade, low-risk alpha differentiates it from broader customer-service or retail-focused tools.

Recommended: Belfort Raises $6M In Seed Funding Led By Vsquared Ventures

Strategic Use of Proceeds and Go-to-Market Strategy

The capital infusion is earmarked for accelerating the equity predictive signal engine’s rollout, with a heavy tilt toward commercialization. Key allocations include:

• Product Refinement and Integration: Enhancing the engine’s API for frictionless adoption, ensuring compatibility with portfolio management systems without data cleansing needs.
• Client Onboarding and Pilots: Expanding trials beyond initial top-tier funds, targeting chief investment officers (CIOs) and portfolio managers who seek verifiable outperformance.
• Team and Operations Buildout: Likely hiring in sales, engineering, and compliance to support scaling, given the regulatory nuances of AI in finance (e.g., SEC guidelines on predictive models).
• Marketing and Partnerships: Leveraging Kellermann’s network for visibility at quant conferences and through Battle of the Quants channels.

This phased approach mitigates common seed-stage pitfalls, such as over-engineering before market fit. Early pilots indicate promising uptake, with the platform’s 90% excess returns over three years offering a compelling pitch in a low-yield environment where hedge funds average 5-10% annual alpha erosion.

Market Context and Competitive Landscape

The timing of this raise coincides with a renaissance in AI-finance intersections, fueled by advancements in large language models and predictive analytics. In 2025, AI-driven fintech seed funding has surged 40% year-over-year, per industry trackers, driven by demands for uncorrelated returns amid geopolitical volatility and interest rate shifts. Increase Alpha operates in the $50 billion quantitative trading software market, where incumbents like Two Sigma and Renaissance Technologies dominate but face scalability limits with proprietary data.

Competitive pressures are mounting from startups like Alpha Trend (AI conviction tools) and Boosting Alpha (scientific trading predictions), yet Increase Alpha’s public-data purity and government-vetted methodology provide a defensible moat. Risks include model drift in volatile markets and regulatory hurdles under evolving AI disclosure rules, but the platform’s third-party validation and low-volatility profile temper these.

Broader implications extend to democratizing alpha: by eliminating alt-data costs (often $1-5M annually per fund), Increase Alpha could lower barriers for mid-tier institutions, potentially reshaping hedge fund economics. Investor enthusiasm, evidenced by Kellermann’s lead, signals confidence in Ghatak’s track record to navigate these waters.

Potential Challenges and Future Trajectory

While the round de-risks initial development, challenges loom in scaling adoption—convincing risk-averse CIOs requires sustained proof-of-concept amid AI skepticism post-2023 hype cycles. Economic headwinds, such as potential recessions compressing trading volumes, could delay revenue ramps. On the upside, a successful launch could position Increase Alpha for a Series A in 12-18 months, targeting $15-25M at $50-80M valuation, assuming 20-30% client growth.

In summary, this funding cements Increase Alpha as a frontrunner in AI-augmented equity forecasting, blending rigorous research with practical usability to capture untapped alpha in public markets. Its measured raise and targeted use of funds reflect prudent stewardship, poised to yield measurable impact for institutional adopters.

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