By Telis Demos
Dataminr Inc., which analyzes tweets and other information
streams to create alerts for traders, reporters and government
agencies, has raised $130 million from banks and institutions in a
new private round.
The deal values New York-based Dataminr at about $700 million,
people familiar with the terms said. All told, the six-year old
company has raised $180 million in equity from investors.
Dataminr's new investors include mutual-fund firms Fidelity
Investments, which led the round, and Wellington Management Co.,
along with Credit Suisse Group AG's CS Next Fund, Goldman Sachs
Group Inc. and Glynn Capital Management, the company said.
Venture-capital investors Venrock and Institutional Venture
Partners also added to their stakes in the company.
The company's software identifies patterns in hundreds of
millions of daily tweets, web postings, traffic data, news wires
and other sources.
Dataminr corroborates the data with market information and
geographic data, among other things, to determine what information
is credible or potentially actionable before alerting users.
The company began by selling to traders and bankers, who used it
to watch for things that could move markets, but broadened out to
government agencies and news organizations.
Breaking news can roil markets, even if it is later proved
false.
That is what happened in April 2013, when a tweet that falsely
claimed a bomb had exploded at the White House caused the Dow Jones
Industrial Average to swing 145 points in minutes.
Dataminr first alerted customers to the report of the
bombing--which came from a hacked Associated Press Twitter
account.
Before the market recovered, it signaled to users that the
report was likely fake, based on other tweets coming from in and
around the White House.
More recently, the service last month alerted customers to a
California refinery fire, first noted by a nearby Twitter user
nearly half an hour before news wires reported it. Shares of Exxon
Mobil Corp. and Tesoro Corp. moved sharply after the news.
Ted Bailey, Dataminr's chief executive and co-founder, said the
funding will be used to add new sources of data to enhance its
Twitter signals.
The company also is working on new applications, such as a risk
monitor that alerts companies to potential threats and crises with
its assets, supply chain and employees globally.
"Our aim is to cover dark spots and alert customers about what
they don't know they need to know," he said.
The company has partnered with Twitter Inc. on a product sold to
news organizations. About 150 media companies, including Dow Jones
& Co., The Wall Street Journal's parent company, are customers
of the service. Dataminr has hired journalists from several news
organizations, including Dow Jones.
This latest fundraising may lay the groundwork for a future
initial public offering, as investors such as Fidelity and
Wellington typically aim to buy into companies before IPOs.
"While we don't have any specific plans, we have the ambition to
be a large independent public company," Mr. Bailey said. "We will
seriously consider an IPO in the future."
Dataminr is part of a growing field of companies that sift
through mountains of jumbled data and sell it to Wall Street,
governments and others. Palantir Technologies Inc., which offers
tools to analyze and visualize data, is valued now at about $15
billion, according to Dow Jones VentureSource.
"Dataminr could be the real-time information layer for the
Internet. I don't know who else could do this," said Nick Beim,
partner at Venrock.
Former Morgan Stanley Chief Executive Officer John Mack, who is
also a Dataminr investor, said: "I was impressed by how they used
social media to get news faster to people than waiting on newswires
or television."
"I was impressed by how they used social media to get news
faster to people than waiting on newswires or television," said Mr.
Mack, who also backed Lending Club Corp., which went public last
year and counts him as a board member.
In addition to banks and institutions, Dataminr is backed by a
group of prominent financial executives, including Mr. Mack, former
Citigroup Inc. CEO Vikram Pandit, former Thomson Reuters CEO Tom
Glocer, and Noam Gottesman, co-founder of London hedge fund GLG
Partners.
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