Increase Alpha, LLC, a fintech startup founded by former U.S. government AI policy advisor Sid Ghatak, has raised $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.
Increase Alpha’s Predictive Artificial Intelligence (PAI) platform has delivered 90% cumulative excess returns over three years, identifying tradable equity sets with an average 70% accuracy — well above the hedge fund industry norm of around 55%. The company’s AI engine integrates directly into existing investment workflows, providing ready-to-use signals without the need for internal data cleansing or complex processing.
“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 company’s launch coincides with a period of intense interest in applying AI to financial markets. While many hedge funds experiment with Generative AI to uncover trading signals, these models often struggle with hallucination, opacity, and bias — leading to limited adoption in institutional finance.
Increase Alpha’s Predictive AI platform was designed specifically for capital markets and does not rely on large language models (LLMs). Trained entirely on public, compliant data, it transforms complex company disclosures and market indicators into validated trading signals while avoiding overfitting and hindsight bias.
“We are at an inflection point in fintech where predictive AI will become fundamental to investment strategies” Ghatak added. “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 originated as a long-term research project at Villanova University, where Ghatak served as a professor. The research demonstrated that when the right public data is paired with a purpose-built predictive engine, stock movements can be forecast with meaningful accuracy. The system has since been validated through eight years of academic research and four years of live trials, and is now being piloted by several of the world’s largest hedge funds.
Beyond his role at Increase Alpha, Ghatak serves as Chief Technical Advisor at the National Artificial Intelligence Association and collaborates with the White House and Congress on AI legislation. His public-sector experience includes leading the Data & Analytics Center of Excellence at the U.S. General Services Administration and co-authoring the federal AI Maturity Model.
Following the seed round, the company plans to expand its pilot programs and work directly with hedge fund managers, CIOs, and data buyers for validation and deployment.
