Daniele Grassi is the CEO and Co-Founder of Axyon AI, the Italian advanced AI for investment management.
Daniele has over 15 years of entrepreneurial experience in information technology and a long track record in finance and artificial intelligence.
Daniele holds a Master Degree in Computer Science from the Università degli Studi di Modena e Reggio Emilia.
In 2016, you co-founded Axyon AI, the Italian advanced AI for investment management, providing asset managers, hedge funds and institutional investors with AI-powered investment solutions. What prompted you to establish Axyon AI?
Daniele: My journey started with a passion for technology and a personal interest in finance. By the time I studied software engineering at university, AI wasn’t in the hype. Before graduating, I founded a software company with a friend to develop customised SW for SMEs while keeping a personal goal to learn about AI by myself.
Running the software company had been significant for my development as an entrepreneur and leader. However, the idea of building a business to connect my interests flourished in my mind.
Deep learning, increased data availability, and exploding computation power capabilities emerged a few years later. Applications that leveraged these opportunities started appearing in several sectors, but specific tools and tech capable of handling the peculiar challenges and complexity of financial markets data were still lacking. I then realised it was at a pivotal moment to dedicate myself deeper and combine my long-lived technological interest in finance with business.
I embarked on another entrepreneurial journey. Axyon AI was spun off from the previous company to pursue the idea that a rigorous, science-backed, automated approach was the key to delivering predictive value in finance. This wildly complex system does not tolerate bias, overfit, or error. Axyon AI was founded jointly with my other co-founders.
Axyon AI helps asset managers diversify alpha and generate winning investment strategies with advanced AI. Can you tell us more about the company’s business model? How are you different from other solutions on the market?
Daniele: Asset managers have two fundamental concerns: generating performance and growing assets under management (AUM). Performance is generated by exploiting the analysis of market behaviour according to certain principles; the level of AUM is a question of the attractiveness and cost of the asset manager.
In terms of performance, asset managers generally look at the market by analysing a selection of data; it is hard to study all the information available, at least without AI models.
If an asset manager decided to develop AI capabilities in-house, it would take a considerable investment and years to see results. Axyon AI solves this problem with a plug-and-play solution.
We provide customised insights generated by our AI models into specific market factors in the form of rankings according to the likelihood of outperformance over the medium to long term. We can also provide insights into which market components will drive asset performance in the future.
We also package everything into strategies, models and indices that can be used as a reference for allocating AUM in the market. Essentially, we use the forecasts we generate for individual assets to provide overweight or underweight indications that can be incorporated into strategies defined by the client.
Our key differentiation is that we offer a plug-and-play solution. In addition, we have been focused for several years on applying AI in the financial world in a very vertical way. I think we have an advantage from the point of view of solving problems in the financial world.
We are also fast and very rigorous. It is difficult to control the outcome, but you can control the process. That has been our philosophy from the beginning. In other words, I think we are one of the safest choices for an asset manager who wants to integrate AI into their investment process.
You raised more than € 5 million from investors, such as CDP Venture Capital, ING Bank, UniCredit Bank, Montage Ventures and Techshop. What results have you achieved until now? What are Axyon AI’s development plans for the near future?
Daniele: We founded Axyon AI in 2016 and first participated in an accelerator programme run by ING Bank, which we won. This gave us immediate exposure to the financial world.
Then, in 2018, we closed our first capital increase, in which UniCredit invested. In 2022, we closed a second capital increase in which CDP Venture Capital invested.
At the end of last year, we raised the first part of a €5 million round led by Montage Ventures, a Palo Alto venture capital fund. It was a source of satisfaction and pride to see an American investor participate in an Italian AI company focused on finance.
Up to 2023, we have focused on two main aspects: firstly, developing the technology, which is made up of many parts, and secondly, enabling ourselves to be highly scalable in terms of market coverage and speed of customisation development.
The recent fundraising was designed to gather resources to move forward commercially. We are implementing several initiatives, including the creation of a business development team and the conclusion of partnerships with some players.
What are the main challenges you experienced in creating and scaling Axyon AI? What do you believe are your next challenges?
Daniele: One of the biggest challenges we have faced is being a fintech company based in Modena, which is certainly not a major fintech hub. It has been a challenge because you have less visibility, although in our case, this is offset by access to very high-quality talent in a very competitive way.
Today, there are 28 people in the company, 70% of whom have STEM profiles. Many of the people working with us are talents who could have gone abroad to develop advanced AI. We can say that we have prevented a brain drain!
More generally, it’s challenging to make a non-Italian investor understand the legal and bureaucratic complexities of our country, which slow down fundraising.
The biggest challenge we face at Axyon AI over the coming 12 months is navigating through the typically slow sales cycle inherent in the asset management industry.
Given the complexity and critical nature of investment decisions, asset managers often proceed cautiously, resulting in extended evaluation, due diligence, and decision-making processes before committing to new technologies like AI. This inherent conservatism and meticulous approach to adopting new solutions can extend the time it takes from initial contact to final implementation. Our strategy to address this challenge involves enhancing our engagement and education efforts to demonstrate the immediate and tangible value our AI solutions can bring to investment strategies. By focusing on building trust through transparency, showcasing proven case studies, and emphasising the competitive edge our AI technology can provide, we aim to mitigate the impact of the lengthy sales cycle and accelerate the adoption of our solutions among asset managers.
One last question. What is your vision for the fintech and AI industries?
Daniele: I think AI can help a lot in the fintech world, mainly in two areas: one is automation, i.e. speeding up low value-added activities, and the other is the predictive part, i.e. working on the value that can be generated with more accurate predictions.
Today, I see a constant tension between using AI to improve performance and accuracy, and maintaining neutrality and privacy. This is an issue that players will have to address.
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For more info on Axyon AI, visit: https://axyon.ai/