Monitior110, the pre-launch web monitoring service for hedge fund traders we wrote about in September, will announce on Monday that it has closed a Series C round of financing with $11 million from new and existing investors. The company, which will begin offering its product for general subscription early next year after three years of development, has now raised a total of $20 million.
The service tracks information from now 50 million sources, analyzes it for topical relevance and delivers near real time alerts to customers. It focuses on blog, deep web and static web changes. Topical expertise evaluation is an important part of the secret sauce.
Draper Fisher Jurvetson led this round of funding and Ron Conway is the most prominent new investor. The company claims to have spent very little of its investors money so far. Longtime financial markets AI geek David J. Leinweber has also joined the Monitor110 board of advisors.
Company President Roger Ehrenberg told me yesterday that fewer than 10 clients have been using the software in a live environment for the last week. He says they have a long waiting list of customers and will increase the number to 20 hedge funds in January. Hedge funds are being targeted, he told me, because they act fast and are willing to pay a premium for tools and data. The price of the service hasn’t been announced yet, but Ehrenberg would tell me that it will be more expensive than Bloomberg. The company is targeting individual traders, has no plans to make big distribution deals and values its customer face time as a way to learn about changes that are needed quickly.
Why so much excitement about a company that seems to do something similar to other services and hasn’t even launched yet? Part of it is based just on the brilliance of RSS and all the things that can be done with it. Imagine now having 3 well funded years to build an automated RSS strategy for your information rich market vertical. Ehrenberg says that the combination of source breadth and reporting speed is what makes Monitor110 stand out.
Preventing the system from being gamed is obviously something Monitor110 has taken pains to prevent. Using more than popularity to determine authority is the first step. Blogs and social media are just one of several areas the service looks for emerging information; gaming is a frequently raised concern but the analytics in question will be no small task to toy with.
I asked Ehrenberg whether a high-end, RSS fueled market monitoring tool is ahead of its time. He said that in the hedge fund world, discussions with prospective customers indicate that though there is almost no knowledge of what RSS is in the field, a simple explanation stokes serious interest quickly. He pointed out that projects of a similar scale had been tried in the early 90’s before RSS was available and were cost prohibitive.
Will the service result in information overload and rashly made decisions because of its focus on broad, nontraditional sources? Overload can be prevented through a good UI and organization of incoming information sources but it’s up to the user to keep their head on straight when data is coming in fast. Anyone who wouldn’t pay for delivery of relevant information fast and early just because deliberation is an asset is probably making a mistake in any competitive field. The nontraditional nature of the sources is an asset not a problem for people who want to move first.
Of course this product hasn’t come to market yet and it could be an abysmal failure. I don’t think it will be, however, because the opportunity to leverage new technologies (RSS most importantly) and the energy behind this startup in particular are too big to miss completely. Some one, if not a number of people, is going to nail the new real-time research of emerging social media.