Scaling companies through management by exception. Why we invested $7.5M in Anodot
The price of light is less than the cost of darkness.
— Arthur C. Nielsen (Market Researcher & Founder of ACNielsen)
What do you get when you connect an amazing co-founder with tech chops, a big data scientist, and the best engineer we’ve seen in a long time? You get Anodot, our latest — and largest — Series A investment to date.
As always, our #1 focus is the team. What initially impressed us was the Anodot dream team. First there was CEO David Drai. David was the former CTO of Cotendo, a company he sold to Akamai for $300 million. Dr. Ira Cohen was Chief Data Scientist of HP Israel and one of the prominent thinkers — and doers — in the big data space. Shay Land was former VP of Engineering for Trustwave. This talented triumvirate joined forces to re-think how data can and will be used to run a business.
But we have been fortunate enough to back many great teams.
To understand Anodot, imagine a super-smart robot that works around the clock and looks at every business parameter in any dimension. This robot figures out your typical conversion stats in Brazil (and how they differ from the US rates), checks the charge back rates in India during the holiday season, intersection of your site uptime and promotions in the US and correlate it with ad performance and conversion. And you don’t even have to control it. It takes initiative and goes the extra mile to notify you when things are out of whack, combining multiple related alerts into one notification.
That’s Anodot. And that is why we wrote our largest check to date.
Existing Business Intelligence tools provide intelligence the organization previously thought it needed. But they are static. Anodot hunts down and presents what information the organization SHOULD be looking at. It is dynamic.
Anodot is a SaaS product that seamlessly weaves itself into your existing information flow. Using machine learning algorithms, it sifts through massive amounts of time-series data from all of the platforms you already use like Mixpanel, Google Analytics, Hadoop, and more. It learns your baseline behavior. It automatically identifies anomalies, isolates issues, and correlates high level data — in real time — to provide you with valuable and actionable business insights that you might not have even searched for. Anodot can unearth growth opportunities to generate more users and revenues. It also dramatically cuts the time it takes for companies to detect issues and understand data anomalies. It speeds things up from days or weeks to mere minutes.
What does this mean for a business? It means they have ability to identify and catch business incidents before they escalate can help save you from huge headaches and lost revenue.
When I met David, I told him the pitch sounded awfully familiar. Some twelve years back, I founded Aternity, an end-user experience monitoring tool. Prior to the acquisition by Riverbed earlier this year, Aternity was monitoring millions of desktops to detect problems early. I know first hand how hard it is to analyze streaming data. It is a bear from data acquisition, ingestion, clean-up of noisy samples, real-time analysis, alerting on it with a good false positive/negative ratio or tying it back to the business impact. It was that hard even though we were working with a known and relatively well understood metric: user experience.
The world has dramatically changed since the early 2000’s. End users aren’t the primary users of IT services anymore. Business metrics are driven by IoT devices like HVACs that are providing and leveraging internet services, website metrics on Google analytics, fraudsters that use credit cards and UAVs generating terabytes of data. All of these generate time-series data that are, for the most part, hidden from view and often ignored until it’s too late. It’s the proverbial needle of “what needs to get done” in the haystack of data.
Value creation is not limited to a company’s own data. Anodot can increase their advantage by monitoring and alerting on outside information from competitors and partners. You can monitor iTunes App Store data to see a step function in the downloads of various apps and read the velocity of good/bad sentiment in the twitter feed of an important business partner. It’s the ability to combine public and private data that drives even more value in anomaly detection and correlation.
Most businesses today require analytics. Using current BI toolsets, analysts are very busy collecting data, manually integrating and analyzing data sets, or building dashboards. These activities should be a means to an end. To drive value from analytics, companies need to be able act on the insights. Anodot creates value from analytics by automation, machine learning, and data correlation in real time. The result? Anodot’s insights are actionable.
With Anodot you can employ principles of “management by exception.” Exceptions are rapidly identified so that businesses can efficiently and quickly take advantage of previously unknown opportunities or deal with problematic issues, helping companies scale and grow.
David, Ira and Shay have the technology and product chops to bring in data from everywhere, analyze it quickly, and make sense of it. This is why in the nine months since they publicly launched, customers like Wix, Microsoft, Credit Karma, and Riskified have all turned to Anodot for data insights.
When Aaron joined Aleph just a few months back, we knew that his background with data-enabled enterprise software would turn out to be a unique asset for us. What we did not realize was how fast he would add value. Even before we closed the investment, Michael, Aaron and I made dozens of introductions to potential customers. The “sucking sound” from the market was something you rarely see with a startup company. These companies get it. They know that growing their business requires knowing what they don’t know ahead of their competition. Anodot is that secret weapon. In fact, the company has more than doubled revenue since we signed our term sheet!
if you have time series data, you should be talking with David and the team to try it out. If you aren’t ready to commit to that just yet, check out some stories: Eyeview suffering alert storms, Credit Karma and their 50 million members hit with a revenue loss, or how Wix can now monitor more than 450 million events every day.
Welcome to the family Anodot! Can’t wait to see who you empower next.