DataRobot, a startup that analyzes data to predict things like who is most likely to default on a loan, has acquired Nutonian, another Boston-based startup and sometimes rival.
Terms of the deal were not disclosed.
Both companies have expertise in machine learning although Nutonian’s specialty lies in handling what is called “time series” data. Think of a stock ticker that lists share prices by the minute. The need to process time-stamped data is exploding with the growth of the Internet of things, in which billions of connected sensors in automobiles, appliances, and heavy machinery generate data about how well they’re working and the conditions around them.
DataRobot had already been working on time-series technology, but buying Nutonian accelerates the process and doubles its addressable market, said DataRobot co-founder and CEO Jeremy Achin. He added that about 20% of DataRobot’s existing customers have time series data that they now handle manually, for the most part. That painstaking work is ripe for automation, said Achin who, before co-founding DataRobot five years ago, was director of research and modeling at Travelers Insurance (TRV).
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DataRobot itself specializes in machine learning, a branch of artificial intelligence that churns through huge amounts of data looking for patterns that it uses to run models or predict likely outcomes. In this predictive analysis field, it competes with companies like SAS, Google (GOOG), and Microsoft (MSFT).
Financial institutions, reportedly including Bank of America, (BAC) use DataRobot’s current technology to predict which prospective customers are likely to repay—or default on—loans. And healthcare companies use it to figure out who is most likely to develop heart disease, diabetes, or 100 other conditions by crunching through a ton of health data. Physicians can use those results to prescribe the best course of action.
DataRobot’s claim is that it enables regular business people who typically rely on Microsoft Excel to do their jobs, to run their own machine learning models without having to hire high-priced data scientists.
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Nutonian will help DataRobot attack that market much faster than if it went it alone. And, given that the company DataRobot brought in about $60 million in fresh venture funding earlier this year, it saw an opportunity to jumpstart its move into Internet of things. That C Series funding brought total raised to nearly $122 million from Accomplice, (formerly known as Atlas Ventures), Intel Capital, and New Enterprise Associates.
Related: Machine Learning Startups Are Ripe for Acquisition
In recent years, Apple (AAPL), Microsoft (MSFT), Google (GOOG), and Salesforce (CRM) have snapped up machine learning and other AI companies at a fast clip, but Achin says his goal is not to be acquired, but instead to file for an initial public offering.
“We want to IPO,” he said. “Everyone’s going crazy on artificial intelligence right now so why not take a shot?”
