Data Elite Looks to Profit From Analytics Startups

Venture-capital firms have spent the past several quarters pouring money into “Big Data” startups, hoping that at least one of the analytics shops in their portfolios will end up selling to a Google or Hewlett-Packard for millions—or perhaps billions—of dollars.

Into this battle comes Data Elite, which bills itself as “Silicon Valley’s first venture lab and early stage fund for big data startups and scientists.” The group’s co-founders are Tasso Argyros, who created Aster Data (later acquired by Teradata), and Stamos Venios, an investor experienced in acquisitions. Data Elite also has some Big Money behind it, including Andressen Horowitz, Formation8, and The Social + Capital Partnership.

Data Elite will provide everything from money (a minimum investment is $150,000) to working space in San Francisco, and it wants startups and entrepreneurs who already have data-analytics experience under their belt. Data Elite partners include Ken Rudin (head of analytics for Facebook), Jeff Magnusson (manage of Netflix’s Data Science Platform Architecture), and Anand Rajaraman (an investor and computer-science professor at Stanford).

In an announcement, the incubator suggested that, despite all the venture-capital money sloshing around, most data-analytics entrepreneurs prefer to bootstrap their companies. “The reason is that the support and resources that may appeal to founders in spaces like mobile apps or social media are too generic & inadequate to make a difference for a big data startup founder,” it added. “For most big data entrepreneurs, the value of joining an incubator or teaming up with a generic early stage fund is simply not there.”

Whether or not that’s actually true—tech-journalists’ inboxes fill every day with announcements about still more data-analytics startups gratefully taking new rounds of funding from deep-pocketed Silicon Valley titans—it stands to reason that, as firms all over the world pour cash into researching and building analytics tools, incubators such as Data Elite and its ilk can profit greatly from growing a data startup into a juicy acquisition target. The current hype over Big Data could end up rewarding a whole lot of people.

 

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