Big data means big money and with an eye on big profits, a group of venture capital firms have come together in California's Silicon Valley to create a new big data investment fund that will not only pump money into startups, but also invest in big data research.
Data Elite Funding
While there are technology venture funds all over the planet, Data Elite claims to be the only one that is specifically for big data.
However, Data Elite is more than just a startup fund. It is also a fund that aims to back research. It will also provide working space, support staff, a customer board and all the resources needed to set up companies that will provide the big data technology of the future.
But it also aims to turn a buck, something its founder, Tasso Argyros, has shown himself particularly adept at after selling his own data firm to Teradata in 2011 for $300 million.
Another notable name involved in the project is Stamos Venios, who will act as Managing Director and who has been heavily involve in mergers and acquisitions in both Europe and Israel.
The entity is backed by Social+Capital Partnership, Andreessen Horowitz, Formation8, Ron Conway and Anand Rajaraman. They have not said how much they will be investing in the project.
The thinking behind the fund, its backers say, is to provide a solution to the unique problems that big data poses, particularly the fact that to a large extent, the financial potential of big data applications has yet to be realized. That creates significant barriers for startups in the space who need investment for development.
The result is that innovation in the space might not be as rapid as it is in other IT areas -- at least that’s what they say -- forcing many new companies to tie themselves in with larger companies that have the money, if they want to develop.
Needless to say, for up and coming innovators, this is not necessarily a desirable position to be in so that, to a large extent, startups in the space are finding it difficult to get off the ground.
Backing Big Data
This is where Data Elite sees is role. It will offer companies $150,000 for around 6 percent of the company and will be open to companies whose founders already have a proven track record in big data and five years of experience in big data projects.
The founders say that they aim to turn these projects into entities that have achieved enterprise traction within months, on the back of advice and input from some of the best known data scientists in the business.
At its core, Data Elite is a new structure that provides startups with funding, three months of physical workspace and hands-on counsel from many of data science minds from the likes of Couchbase Facebook, Netflix and Zynga among others.
The first group of participant companies, which will be limited to 10 maximum, will begin work on Jan. 15 next year and will be expected to work on-site in San Francisco for three months.
This is not for beginners and those selected will be expected to have a concrete idea of where they want to take their project and will receive 60 hours advice and training a week to get it up and running.
There are many funds, incubators and accelerators out there that entrepreneurs can turn to today for general business advice. However, "none of these programs have the industry knowledge to help highly technical founders in the data sciences to commercialize their research or build out their products," stated Chamath Palihapitiya, founder and managing partner at The Social+Capital Partnership.
Data-Elite was formed to bridge that gap. Where this actually goes is impossible to say, but it shouldn’t take long to find out, as the program is only for three months.