SoftBank is investing $146 million in the South Korean artificial intelligence (AI) company Qraft Technologies Inc. to help it expand into the U.S.
As The Wall Street Journal (WSJ) reported Monday (Jan. 10), Qraft manages $1.7 billion for Asian banks and insurance providers through its line-up of funds traded in the U.S., and created a software platform that examines market data in search of stocks that show promise.
The companies declined to disclose Qraft’s valuation, per the WSJ. SoftBank, based in Tokyo, is one of the largest tech investors in the world, managing a portfolio in excess of $100 billion.
Qraft has 50 employees, most of whom work on the company’s AI project and who own about a third of the business, with outside investors controlling the rest.
“SoftBank [now] makes up a large portion of that,” Robert Nestor, the U.S. CEO of Qraft., told the WSJ.
Nestor added that there are some smaller venture-capital firms and institutions among Qraft’s investors, but declined to name them.
The WSJ notes that while asset managers used to be skeptical about AI – and understanding of their staffs’ worry that AI would replace human stock pickers – are now hoping data analysis tools can help them battle underperformance and justify their fees.
Qraft has reportedly been on SoftBank’s radars since at least 2020, when the firm considered making it one of its Vision Fund investments. Kentaro Matsui, managing partner of SB Investment advisers, said SoftBank reconsidered the idea last year, but as an investment by SotBank itself instead of the Vision Fund.
“We wanted to test how we could utilize AI, and we thought Qraft was the best way to do that,” Matsui said.
This news comes at a time where research shows 75% of business-to-business (B2B) sales organizations will be using artificial intelligence (AI)-based selling by 2025. As PYMNTS reported in December, the market research firm Gartner says sales leaders have been been investing more in AI, including machine learning, to examine data and determine the next best actions.
According to Gartner, that’s a response to the pressure from the massive volumes of data available along with “revitalized budgets.”