Kensho – King of Financial Data Analytics
Kensho is refreshing financial data analytics with big data technologies.
Kensho’s Value Creation
Kensho is a market data analytics system that can find answers to more than 65 million question combinations by scanning over 90,000 customizable actions. Questions, asked in plain English, are typed into a into a Google-style text box. Kensho’s creative approach to data analytics allows users to ask out of the box questions, such as:
-Which cement stocks go up the most when a Category 3 hurricane hits Florida? (The biggest winner? Texas Industries.)
-Which Applesupplier’s share price goes up the most when the company releases a new iPad? (OmniVision, which makes the sensors in the iPad camera.)
-How does Apple typically trade before and after original product releases?
-How do the big banks trade the day after the Federal Reserve‘s stress test results are released?
-Which retail stocks were the best performers from Thanksgiving through the end of the year over the last 10 years?
-When Netflix beats earnings, how do shares of Amazon historically perform the next day?
Until now, answering these types of questions required several analysts and several days. Kensho can do it in a matter of minutes, effectively acting like a quant army.
Kensho’s analyzed market data can include things like:
-Earnings releases
-Economic Reports
-Stock price movement
-Moving averages
-Company product launches
-FDA drug approvals
-Stock price triggers
-Monetary policy changes
-Political events
Kensho’s Value Capture
Kensho received $15 million in a new investment round led by Goldman Sachs on November 2014. Forbes reported that the terms of the deal were not disclosed but a source said Goldman is now Kensho’s largest investor. The source also said the deal placed Kensho’s valuation in the 9-figure range. Kensho had previously raised a $10 million seed round from the likes of Accel Partners, Breyer Capital, General Catalyst, Google Ventures and NEA.
As part of Kensho’s strategic partnership Goldman, Kensho will implement its data-crunching software across the bank. This deal is very promising for Kensho, but time will tell how Kensho will grow and offer its product to other companies.
Kensho’s Operating Model
Kensho’s processes, capabilities, resources, and use of data are all dedicated to value creation. Kensho has expert engineers, UX designers, and data scientists focus on creating a product that studies unimaginable amounts of structured and structured data to determine how all types of events have historically affected the markets. Their tools include the latest big data and analytics technologies. Kensho will empower clients to make more educated financial decisions by putting things in a historical context to focus on the macroeconomic picture.
Kensho’s Journey
Kensho’s goal is to allow financial professionals to make better, faster and more informed decisions with statistics. As Kensho’s CEO, Daniel Nadler, stated, “Kensho is trying to bring to Wall Street what Saber Metrics (Moneyball) accomplished for baseball.”
Kensho, founded in May 2013, is bringing a refreshing change to the financial data industry, an industry that has long been lead by Bloomberg and Thomson Reuters. Kensho is democratizing financial data analytics “by giving the masses the type of complex, quantitative computer power currently used by a few top hedge funds like Bridgewater Associates, D.E. Shaw and Renaissance Technologies.” And potential clients, including investment banking and fund management giants, are receptive to Kensho’s offering.
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Great post! Thank you. What do you think the response of other players in the market will be? Will Goldman’s competitors be able to work with Kensho or will they have to develop/ partner with someone with similar capabilities?
This is awesome! I wonder if there are other consumer segments that would be interested in using this product besides financial professionals at large institutions — perhaps the unsophisticated investor like me could use this tool to manage their own portfolio 🙂