Recorded Future, With New VC Round, Seeks Fortune in Defense and Finance
Wish you could use the Web to make reliable predictions about the future? Not just the performance of the stock market, say, but things like, what are my business competitors planning to do in a particular field? Where in the world will there be civil unrest in the coming weeks? What military maneuvers can we expect to see from China or Iran?
These are big questions, and they require big technology to answer accurately. Now a Boston-area startup is building a business around providing those answers to big customers, starting with government agencies and financial institutions. The company has been pretty quiet so far—but let’s just say it has been listening carefully.
Recorded Future, based in Cambridge, MA (with offices also in Sweden and the DC area), has just started talking about its plans. Last week, the two-year-old company announced a $12 million venture financing round from Balderton Capital, Google Ventures, Atlas Venture, and In-Q-Tel, bringing its total funding to $20 million. And it has just released new software that lets defense and intelligence analysts track relevant happenings around the world via Web sources. The company has just under 30 employees, about a half-dozen of them in Cambridge.
But does this startup have a snowball’s chance in hell of solving such difficult (and serious) problems? After all, data experts have been trying for over a decade to connect the dots on the Web for applications in defense, counterterrorism, and finance. There have been big ideas and efforts involving things like the “deep Web,” the “semantic Web,” and the “global brain.” Not much of commercial value has come of these yet. But we’re starting to see companies make headway in areas like social media analytics, Web monitoring, sentiment analysis, and information discovery.
To gauge Recorded Future’s chances, you should know something about its founder and CEO. Christopher Ahlberg (left) is a Swedish native who co-founded the business intelligence firm Spotfire based on his PhD work in data visualization and analysis. He moved to Boston in 1997 when Atlas invested in the company (seems to be a trend for Atlas companies). After TIBCO bought Spotfire for $195 million in 2007, Ahlberg stayed on for a couple of years and started thinking about his next project.
Spotfire helped business analysts and executives make sense of spreadsheets and other structured data. But Ahlberg thought, “What could we do if we think of the Web as the data source, instead of structured databases?” As he explains, “The Web was becoming such a dramatic place. It has so many more signals about what will happen on planet Earth than anything else.”
So here’s how it works. You enter a query about a place (Syria, say), a time frame (next week), and the type of event or information you’re looking for (who’s talking about Syria, or which world leaders are traveling there). Then Recorded Future’s software scours tens of thousands of sources on the Web, including news outlets, blogs, social media such as Twitter, and government filings. It uses natural language processing algorithms in five languages—English, Arabic, Chinese, Russian, and Spanish—to make sense of all the content, figure out which parts are relevant (and reliable), and triangulate where and when events of interest are happening. The software is particularly sensitive to mentions of specific dates and time frames (like “next Tuesday”). It then serves up the information via an interface that includes things like tailored news feeds and interactive maps.
The firm has some broad similarities to other Boston-area efforts: Bluefin Labs, which is trying to make sense of social media around TV; Crimson Hexagon, which does Web analysis for business intelligence; Lexalytics, which analyzed Wikipedia entries to help its software make sense of conversations on the Web; and even Wolfram Alpha, the massive project led by Stephen Wolfram to create a system that can answer any question by “computing” it from a large knowledge base. And outside Boston, there are companies with related efforts such as Evri, Palantir, Quid, Wavii, and bigger firms like SAS and IBM.
Recorded Future makes money from subscriptions to its software. For now, the company is working with a targeted set of customers—hedge funds, trading firms, the U.S. Department of Defense, and government agencies of the three-letter variety. As for privacy issues, the company’s Web service “does not go beyond any passwords,” Ahlberg says, and the firm doesn’t touch Facebook data. It’s still too early to talk about revenue growth, but he says, “This year has been a good year.”
The company certainly faces challenges ahead. For one thing, the data set it’s dealing with is “depressingly big,” Ahlberg says. (Can we start calling the field of big data “depressingly big data”?) For another, it will only go as far as its predictions and analytics are accurate. (You can check out some sample results in finance here.)
Nevertheless, Ahlberg says the company has a “terrific business” even with just its current class of customers. Longer term, the plan is to build tools that anyone ranging from a journalist to a retail executive could use to gather personalized information about certain fields, topics, or competitors. “We build software to help analysts make better decisions,” he says. “Ultimately we want to be an analytics company.”
It sounds like Recorded Future is eventually gunning for the likes of Bloomberg and Thomson Reuters—media conglomerates that provide business data to professionals. An ambitious goal, to be sure, but the company’s chief sounds confident. “Over time,” Ahlberg says, “we can do things that seriously disrupt what these guys are up to.”