Accel Launches Second $100 Million Big Data Fund
This whole big-data idea had better be real, because there’s a lot of money being invested in it. The latest is coming from Accel Partners, which will on Tuesday announce that it has raised its second $100 million Big Data Fund, formally named Big Data Fund 2.
Led by Accel’s Pin Li (pictured), the firm announced that it has added two executives — Anthony Deighton, the CTO of QlikView, and Shlomo Kramer, the CEO of data security startup Imperva and the co-founder of Check Point security company — to seats on its Big Data Fund Advisory Council.
I talked with Li on Monday, and he told me that the target with this fund — the first was launched to invest in companies working primarily in the Hadoop ecosystem — is to fund companies working on what he calls “data-driven software.”
If the first wave of big-data investment was about building platforms from the foundation, this wave will be about building the software that actually helps reach the promise of big data. That promise is extracting valuable information that actually helps improve a business, and so far it’s a pretty tall order.
Companies like IBM, Oracle and SAP have thrown their weight and various software platforms behind the idea of big data and analytics. It’s the notion that with vast troves of accumulated business data being gathered as a matter of course, turning computing engines to the task of analyzing it all will yield useful and money-saving or money-making insights that help a business grow. The hardest part is the last bit — extracting value. Li calls it “the last-mile problem.”
“The whole point of doing big data in the first place is to help employees in an enterprise make better decisions,” he said. Many consumer applications — LinkedIn and Facebook are two examples — meet the definition of being “data driven,” in ways that make consumers smarter, Li told me.
The same can’t usually be said of enterprise applications. CRM and ERP applications — two classic enterprise apps — don’t usually deliver any insights by themselves, despite the fact that they generated huge amounts of data that’s directly tied to a company’s operations. “There should be a tighter feedback loop,” Li says. “The user should be getting action items and recommendations for the next thing they should do.” Think real-time insights about the state of your business that you couldn’t get before.
One example of an early investment by the new fund is RelateIQ, which came out of stealth mode last week. Its products draw information about work groups to keep track of the state of those relationships as they change, pulling data from calendars, CRM systems, email messages and so on. As it stands now, most CRM systems require you to enter data about each person manually.
Others that fit the data-driven software idea include Trifacta, in which Accel led a $4.3 million series A investment last year. Another is Sumo Logic, which turns ordinary log files from servers into a gold mine of useful information. Accel led a $30 million series C in that company.