Increase Alpha Raises $3.5M to Launch Proprietary AI Prediction Engine for Institutional Investors

WASHINGTON, Oct. 7, 2025 /PRNewswire/ -- Increase Alpha, LLC, a fintech startup founded by former U.S. government AI policy advisor Sid Ghatak, today announced it has raised US$3.5 million in seed funding to launch its equity predictive signal engine for hedge funds and institutional investors. The round was led by Bartt Kellermann, CEO of Battle of the Quants.

Powered by its proprietary Predictive Artificial Intelligence (PAI), Increase Alpha's predictive engine has generated 90% cumulative excess returns ("alpha") over the past three years. While most hedge funds aspire for 52-55% accuracy—Increase Alpha exploits an information gap to identify a tradable set of hundreds of equities with an average accuracy of 70%. Designed for seamless integration into existing investment strategies, the engine offers ready-to-use signals for hedge funds without requiring internal data cleansing or signal processing as is typically the case with other alternative data providers.

"In an industry where unique, uncorrelated, and consistent alpha has become increasingly rare, we've demonstrated that it's not only possible, but scalable," said Sid Ghatak, Founder and CEO of Increase Alpha.

The announcement comes with the tailwind of an especially auspicious month—Zanista, an AI-powered financial analytics firm, has published a research paper on Increase Alpha, entitled "Increase Alpha: Performance and Risk of an AI-Driven Trading Framework," Increase Alpha sponsored the Eagle Alpha conference where it formally introduced its product to the hedge fund industry, and Sid testified before Congress on how to develop AI solutions to improve care for the nation's veterans.

The launch comes at a time when financial institutions are exploring the use of Generative AI to inform and identify trading strategies in the hopes of uncovering alpha. Yet, many existing LLMs solutions remain experimental as they often struggle to handle the complexities of the capital markets, they lack the transparency required for the financial industry, and their ongoing issues with hallucinations. According to a recent well publicized MIT Study regarding the failure of Generative AI projects, the financial services industry showed "little to no structural change" as a result of Generative AI.

Increase Alpha closes this gap through its Predictive AI platform that does not use any LLM technologies and was purpose-built for financial markets. Unlike traditional models, its engine is built and tested to eliminate any bias and is powered by proprietary indicators that have been shown to drive stock prices. Trained exclusively on public, compliant data, the model transforms complex company disclosures and market cues into validated, institutional-grade predictions with high accuracy and reliability. And all the while avoiding hallucination, overfitting, hindsight bias, and cherry-picking, all of which commonly plague traditional backtesting and other approaches.

"We are at an inflection point in fintech where predictive AI will become fundamental to investment strategies," said Sid Ghatak, Founder and CEO of Increase Alpha. "With years of academic research and real-world trials, Increase Alpha now delivers proven predictive capabilities that institutional investors can trust. Our goal isn't to just create another model, but redefine how AI technology is applied in finance."

"After seeing how Increase Alpha merged AI, data and hedge funds I decided to invest," said Bartt Kellermann, CEO of Battle of the Quants. "This combination is so completely unique and effective that they have the potential to reimagine the entire hedge fund space."

Increase Alpha began as a long-term research project at Villanova University, where Ghatak served as a professor. The original hypothesis was that when the correct public data is paired with the right prediction engine, it could consistently forecast stock market movements. This methodology is validated through eight years of academic research and four years of real-time trials. Today, the predictive engine is being piloted by several of the world's largest hedge funds, with licensing discussions underway.

Ghatak brings deep experience from AI governance and fintech. He currently serves as the Chief Technical Advisor at the National Artificial Intelligence Association and collaborates with The White House and Congress on AI legislation. Formerly, he served as a Director of the Data & Analytics Center of Excellence at the U.S. General Services Administration, co-authoring the federal AI Maturity Model to enable the adoption of AI within the public sector.

Following its seed round, Increase Alpha is focused on its go-to-market execution—working with hedge fund managers, Chief Investment Officers, and data buyers as they explore the product for technical validation and business understanding. Even in its nascent form, Increase Alpha has already rolled out pilots and trials for several top tier funds and is in the process of onboarding many more.

About Increase Alpha

Increase Alpha, LLC, founded by Sid Ghatak is a Washington, DC–based fintech company building a proprietary equity predictive signal engine. Powered by proprietary deep learning models and validated through rigorous forward-testing, the engine is born from a long-term research project and is validated through third-party research.

To learn more about Increase Alpha, visit https://www.increasealpha.com/

For inquiries, please contact Emely Reyes (e.reyes@increasealpha.com)

View original content to download multimedia:https://www.prnewswire.com/news-releases/increase-alpha-raises-3-5m-to-launch-proprietary-ai-prediction-engine-for-institutional-investors-302577363.html

SOURCE Increase Alpha