Estimated valuation: $650 million

Product: Data analytics and machine intelligence

IPO Timeline: TBD

Date Founded: May 1, 2013

Kensho is the Japanese term for one of the first states of awareness in the Zen Buddhist progression. The company that bears this name seeks to achieve a similar awareness for its users. Headquartered in Cambridge, Mass., Kensho was founded by Peter Kruskall and Daniel Nadler, two entrepreneurs who had the vision of creating a complex set of analytical tools housed in an intelligent computer system that could provide answers to complex financial questions that are posed in plain English. The company is made up of a diverse group of engineers, scientists and financial professionals who come from places such as Google, Apple and the Federal Reserve. Their team includes members with Ph.Ds in physics, economics and quantum computing, a world champion Olympiad in informatics and one of the youngest people to ever enroll at Harvard University.

Making Wall Street More Efficient

The analytics tools that Kensho offers combine natural language search, graphical user interfaces (GUI), and secure cloud computing to take data analytics to a whole new level, one that may result in the displacement of many Wall Street analysts who currently take days to manually perform the work that programs like this one can accomplish on an automated basis in a fraction of the time. In the current business model, a client will call his or her broker or trader for information about a possible trade, and receive an answer based upon the trader's knowledge and memory of recent events that affect the security in question, with all of the human limitations that come with it. A particularly valued client might get a research report that contains more information, such as how the markets or the security reacted to past events. Unfortunately, by the time the client had the information that was needed to proceed, the trading opportunity would have passed.

Brokers and traders who use Kensho's program will receive instantaneous access to reams of data culled from dozens of different databases with the click of a button on Kensho's digital interface. Kensho's program promises to bring an end to the days when brokers and traders had to manually research companies by inputting search words that they had to think of on their own. The software is capable of making new connections between events that take place and the price of a given asset, which allows it to make search recommendations that the user would otherwise never think to make.

The program that the company offers is clearly a threat to human financial analysts and hedge fund managers who only have murky access to the data they need to make informed decisions. Kensho says it offers answers in plain English to questions such as How do [insert given sector] stocks react when there is an act of terrorism in Syria? It also has the ability to analyze relationships among some 90,000 events including political news, corporate earnings, natural disasters, etc., to produce answers a user is looking for. Kensho can instantly turn over in 40 hours, answers to questions that might have previously taken an analyst making anywhere from $350,000 to $500,000 a year of research to discover.

The company has received three rounds of funding totaling $58.3 million from 10 different investors. Its most recent round of funding was a Series A for $47.8 million in November 2014 from Goldman Sachs, who is also one of its customers. Its current clients include CNBC and the CIA, who use the program to surface research and analytic insights designed to create actionable, historical context around market moving events.

Going forward, founder Daniel Nadler envisions a future where computers will increasingly free financial employees up from doing menial research work so they can focus more on building relationships. (For related reading, see: 5 Fintech Firms Emerging in Boston.)

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