Kensho, the small Cambridge-based financial start up, just landed a big Wall Street player.
Kensho announced Monday that it scored $15 million in a new investment round led by Goldman Sachs. Terms of the deal were not disclosed but a source said Goldman is now Kensho's largest investor. The source also said the deal placed Kensho's valuation in the 9-figure range. Kensho had previously raised a $10 million seed round from the likes of Accel Partners, Breyer Capital, General Catalyst, Google Ventures and NEA.
Founded in May 2013 by Daniel Nadler and Peter Kruskall, Kensho is out to shake-up the financial data industry (now dominated by Bloomberg and Thomson Reuters) by giving the masses the type of complex, quantitative computer power currently used by a few top hedge funds like Bridgewater Associates, D.E. Shaw and Renaissance Technologies.
As I wrote in May, Kensho's cloud-based software can find answers to more than 65 million question combinations in an instant by scanning more than 90,000 actions such as drug approvals, economic reports, monetary policy changes, and political events and their impact on nearly every financial asset on the planet.
Questions (asked in plain English) can be typed into a into a simple, Google-style text box. Stuff like: Which cement stocks go up the most when a Category 3 hurricane hits Florida? (The biggest winner? Texas Industries.) Same with which Apple supplier’s share price goes up the most when the company releases a new iPad? (OmniVision, which makes the sensors in the iPad camera.) Until now, answering these types of questions required several analysts and several days. Kensho can do it in a matter of minutes. As Nadler said: "This essentially is giving you a quant army.”
This quant army is now heading to Goldman. As part of the new strategic partnership Goldman will spread Kensho's data-crunching software across the bank. How will Goldman put it to use? We'll have to wait and see.
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