After shopping itself around to all the major search engines, Radar Networks finally found a buyer in another semantic search startup. Today, Evri is announcing that it will be acquiring Radar Networks, along with its core technical team and its main product, Twine. Rumors surfaced yesterday on ReadWriteWeb that Evri was being acquired, but that is not the case. Evri is the acquirer.
I spoke with both CEOs this morning. They would not disclose the terms of the deal, but it is safe to assume that it was largely an equity-based transaction. Both Evri and Radar Networks share Paul Allen’s Vulcan Capital as their largest shareholder. Radar has raised $24 million in total capital, while Evri has raised $8 million. (At least that is what has been publicly disclosed. Paul Allen has poured much more money into Evri almost single-handedly, perhaps even more than Radar raised). Radar was unable to raise more during the recession and kept pushing out the release of its next product, T2, an ambitious project to create a semantic index of the Web. Using this semantic index, T2 can do a better job understanding what each Web page it indexes is about.
Evri, on the other hand, has been focusing more on filtering the realtime Web and then creating a semantic index of those pages based on matching similar content. One of the big drivers of the deal was the promise of combining Evri’s realtime filtering with T2, which is ideal for more evergreen and authoritative content.
“We had to find a home,” explains Radar CEO Nova Spivack. “Fortunately, we had T2 and a portfolio of fundamentally valuable IP. And user growth is holding steady even though we are no longer working on Twine” He also confirmed that he was “in discussions” with larger companies. Why did he choose Evri? “At the end of the day, not only was it a better offer, but Evri is more compatible with our team. Joining one of the larger players was a possibility, but it meant we would not get to work on T2.” Spivack will be an advisor to the combined company. He wrote a blog post about the deal.
Semantic search is still in its infancy. Consolidation among startups could give the acquirers more firepower, but eventually the bigger search engines are going to start getting serious.