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Investment AI fintech gets $14M in funding

Asset management is opening up to the potential of artificial intelligence, and one Israeli firm’s machine learning-driven investment tech has attracted millions in new funding.

Pagaya, which is based in Tel Aviv and New York City, announced on Thursday it received $14 million in Series B funding from venture capitalists including Harvey Golub, ex-CEO of American Express.

Golub and VC fund Oak HC/FT lead the funding. Dan Petrozzo, the former global head of investment management technology at Goldman Sachs and a venture partner at Oak, will be joining Pagaya’s board.

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Gal Krubiner Pagaya Aug 31 2018

“AI will be a massive part of institutional finance in the future, and the top-notch team at Pagaya has developed the most advanced approach to implementing AI in investment management,” said Petrozzo in a press release. “We’re excited to be on board as their vision and solutions lead the industry forward.”

Pagaya, which was founded in 2016 by Yahav Yulzari, Avital Pardo and Gal Krubiner, serves institutional markets that focus on independent, alternative asset management. Krubiner currently serves as CEO.

The fintech manages approximately $250 million in capital, primarily from institutional investors. It recently closed a $75 million debt financing deal with Citigroup, according to Pagaya. It has 24 employees, according to LinkedIn.

Investors in the Series B funding included GF Investments, Siam Commercial Bank and Clal Insurance.

Pagaya is backed by Viola Group, a private equity investment firm based in Israel with over $2.8 billion in assets under management.

Though AI has found ready application in banking and increasingly in financial planning, its use in asset management is still being explored. According to consulting firm Sapient Global Markets, 53% of asset managers either have or are planning a “limited” number of AI initiatives.

This year has proven a good one for fintechs to raise funding. In the first half of this year, there has been $14.2 billion put toward fintech investments in the U.S., according to a KPMG study, with 427 deals made.

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