FatKat is the latest company aiming to make sense of the exploding amount of information on the Web and elsewhere to help you make better investment decisions.
It has yet to launch, but the Wellesley Hillis, Mass. company is worthy of mention because it builds on work by technologist Ray Kurzweil, who has given substantial thought about future trends. It is also backed with $2 million from some well-known investors, including Silicon Valley venture capitalist Vinod Khosla and former Nasdaq chairman Michael Brown, according to PEHub.
That said, there is no evidence that Kurzweil and his backers can apply his prolific inventiveness to push things forward in the already advanced field of “quant” investing, which is the area FatKat is targeting.
Quantative investing is already applied an estimated trillion dollars of market funds, and the trend is expected to grow, the company says on its Web site. Such investing consists of using math and science to recognize patterns in stock market developments, and then using algorithms to make investments based on those patterns. Here’s the company’s summary of quant investing to date. FatKat appears to want to pull big names and minds together, and build a technology that boasts just enough of an advantage that it can convince investors to use it.
The latest investment is part of a $2.4 million third round of financing by the company, according to a regulatory filing. Other backers include Teradyne co-founder Alex d’Arbeloff, funds controlled by Revolution Health exec and nanotech expert, and Zyvex CEO James Von Ehr, PEHub’s Alex Haislip reports.
6 Comments
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Chris Zaharias said:
There’s also a very interesting firm [which I work for] called Efficient Frontier that’s been applying quant math to how best to value and optimize paid keywords on search engines.
The future of everything from airplane ticket pricing, to advertising optimization, to equity trading is… algorithms.
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Rockwell said:
Chris, I’ve always wondered: why doesn’t Efficient Frontier apply its software to affiliate marketing, as opposed to only soliciting clients (or do you already)? I would think that you would be able to make huge money in arbitrage if the system works as well as I’ve heard.
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Chris Zaharias said:
A couple reasons, Rockwell. First, our advertiser clients share their conversion data with us and might be nervous about us competing with them on keywords. We would never use their data for anything other than optimizing their own ppc campaigns, but some of them would be nervous nonetheless.
Second, we continue to have more business available to sign than we can handle, so we have to pick and choose where we allocate our resources. In that context, growing advertiser spend with good, long-term relationships is job #1 and is what’ll lead to the best valuation for us long-term. Doing arbitrage would make us $$, but the enterprise value to a potential acquirer of those arbitrage efforts probably wouldn’t be as high as of that manpower were applied to getting another $100M in spend under management.
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Rusty said:
Hi Chris, does this company that you speak of do joint ventures and if so, could you send me more info?.
Thanks,Rusty
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