The Deal
Sunday, November 22, 
5:41 am

Exclusive: Tim Draper touts newly funded SkyGrid as tool for gauging market sentiment

  Share     E-Mail    Discussion (1)     Print Story


skygrid.jpgAiming at building a reputation among both technology and investment types as it expands a subscription service for filtered investment news, Silicon Valley startup SkyGrid Inc. is adding former American Express Co. CEO James Robinson and his RRE Ventures fund as lead investor in an $11 million Series B round set to be announced Wednesday.

RRE is joined by the $1.4 trillion money management firm BlackRock Inc., which also is a customer of its service. Seed investors Draper Fisher Jurvetson and technolgy pundit Esther Dyson, and additional strategic investors joined the company's list of backers in a $1.25 million Series A round in April 2007. The deal brings total outside investment in SkyGrid to $12.8 million, in addition to an undisclosed amount founder and CEO Kevin Pomplun put into the company to develop technology in its first year (see our video interview with Pomplun below).

Pomplun founded SkyGrid in March 2005 fresh out of college based on a need for greater filtering of news on publicly traded companies he identified through managing his own investments. He self-funded the company and recruited a full technology development team with an undisclosed amount. In the first quarter of 2006, the company raised $550,000 in a seed round from Dyson and Draper Fisher, based on an early product design and marketing plan. The second round funded extensive experimentation with a roster of five money management beta partners before the company launched commercially in February.

Draper Fisher founder and managing director Tim Draper says by e-mail that he was attracted to the investment based on Pomplun's entrepreneurial skills and the market demand, and the fact that SkyGrid has performed on its promise to date.

"SkyGrid is amazing," Draper says. "The concept of getting a 'temperature' on sentiments surrounding a company is becoming reality and will be a growing strategic investor advantage over time. Kevin is a phenomenal CEO, and has exceeded all our expectations."

SkyGrid sells its service to hedge funds, portfolio managers and individual investors for $500 a month per-person, but offers volume discounts for large customers. The service delivers investment news based on customized portfolio lists, and includes major wire services as well as blogs and other online news and commentary sources, rated by reliability. News is delivered in a color-coded format that identifies whether it is positive or negative, and the company has continually refined its features to customize delivery for different clients.

Pomplun said the filtering technology is entirely automated, and while he declined to discuss criteria built into its algorithms, he said about 25 factors are built into its technology for identifying web content by reputation and relevance.

"If you looked at the information landscape prior to the Internet, it was manageable," Pomplun says. "But with the explosion of content you had a fire hose of data that is hard to digest, and people needed a way to filter it."

In addition to identifying investment sentiment, the company's technology also includes software for creating entirely automated summaries of each story it posts. Pomplun said the system was created by working with five initial institutional customers, and he said that about 90% of the current design has come from ideas from customers. -- Clifford Carlsen

See Feb. 13 post on SkyGrid from GigaOm

Continue reading below

Also on Dealscape





Comments

From: robin trehan,

I think it is a great idea, next stop should be to capture the European market for skygrid


Post a comment




The Deal Pipeline

Deal Video


Inside The Deal: Avaya Inc.'s Mohamad Ali on the company's next target.


More video...

Crisis On Wall Street
Technology
Deals of The Decade

Community

Industry Insight

Managing your shareholder base

Growth companies and their PE sponsors should be wary of the pitfalls that arise when they layer on tiers of preferred stock.


Industry Insight

Easing the stress of distressed M&A

Corporate buyers face numerous complexities when trying to identify the right moment to purchase a distressed asset.


Editor's Note

Editor's letter: Nov. 16, 2009

Beneath the veneer of Wall Streeters beats the same heart, stirred by the same determinants of behavior.



©Copyright 2008, The Deal, LLC. All rights reserved. Please send all technical questions, comments or concerns to the Webmaster.