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Allocations, a fintech startup using artificial intelligence to streamline private capital fundraising, has crossed $2 billion in assets under administration on its platform, VentureBeat can exclusively report.

The milestone demonstrates surging demand for alternative investments like private equity and venture capital, as well as the power of AI to automate cumbersome paperwork.

“AI has supercharged our output, with each employee servicing 70 funds, which is 10-70x more than the industry average,” said Kingsley Advani, founder and CEO of Allocations, in an interview with VentureBeat. “Generating fund documents used to be an expensive part of the process, but now we can generate them in seconds with our AI models.”

Supercharging with AI

By training machine learning models on a database of over 100,000 investment documents, Allocations can instantly generate customized private placement memorandums, operating agreements, and other templates required to launch a fund. 

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The models can also scan market data to expedite due diligence on potential investments. This automation allows Allocations to run an entire back office for private market investing at a fraction of the cost of traditional administrators.

These AI capabilities represent a massive improvement in efficiency. Generating legal paperwork and performing compliance checks manually can typically take hours of lawyer time and cost thousands of dollars per fund. The company’s AI-based approach appears to cut the time and cost of these tasks down to just minutes. It opens up so many new possibilities for streamlining fund administration.

Democratizing alternatives

Allocations customers include asset managers, family offices, and angel investors looking to launch special purpose vehicles (SPVs) that let individuals collectively invest in a single startup or asset.

The platform has handled several blockbuster SPVs including a $23 million deal to invest in Leeds United, as well as special purpose vehicles for SpaceX, OpenAI, Anthropic and other prominent startups.

Creating legal entities, generating paperwork, and filing regulatory disclosures has traditionally been slow, expensive, and complicated. But by automating these processes, Allocations makes launching even complex SPVs seamless.

Advani believes AI automation will “democratize access” to alternative assets by making it economical for more managers to launch small niche funds with lower minimum investments.

“Traditionally, private investors needed to put up anywhere from $100,000 to $1 million to access these deals,” Advani told VentureBeat. “But with Allocations, we can enable deals with investment minimums as low as $5,000 because the costs are far lower.”

Eyeing the mass market

Allocations’ $2 billion milestone shows that technology can open up lucrative alternative investing opportunities to a broader investor base beyond Wall Street institutions. The company plans to launch a mobile app this year that will let fund managers spin up entities on the go in just minutes.

“Imagine you’re on a plane and want to launch a fund — you’ll be able to do it from your phone in minutes,” said Advani.

Allocations plans to launch a mobile app this year that will let fund managers create new entities in minutes directly from their smartphone (Credit: Allocations)

Allocations’ push into mobile reflects a wider generational shift, as more young investors get comfortable managing money from their smartphones. 

Consumer fintech apps have trained a new generation to expect slick digital experiences. So there’s a huge opportunity for platforms like Allocations to become the mobile back office for alternative investing.

As Advani says, “AI will be instrumental” in reaching Allocations’ goal to power over $1 trillion in private market assets by 2030. By merging cutting-edge technology with access for the masses, the company aims to fundamentally change who can invest in the next unicorn startup or VC mega fund.

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