SAN FRANCISCO: Media intelligence company Meltwater is acquiring Algo, a startup founded by angel investor Matt Michelsen.
The deal builds out Meltwater’s capabilities in data science and AI, Michelsen said.
An investor in Uber and data analytics company Palantir, Michelsen explained he launched Algo (meaning "something" in Spanish) with entrepreneurs Aaron Rama and Evon Onusic, progressing it as an app by launching an API connection on the web.
Founded in early 2015, the app essentially serves as the AI-powered equivalent of Wikipedia, Michelsen said. Instead of being built by humans, Algo builds profiles for everything with AI. The app has been downloaded three million times, he added.
"What we wanted to do [with Algo] is learn what people are reading and how they’re reading it," Michelsen said.
A spokesperson told PRWeek that $1 million of Michelsen’s own cash is tied up in the app, along with many others. While declining to disclose financial details around the deal, he said he made a profit.
Michelsen was introduced to Meltwater through a partner from venture capital fund 8VC, for which he serves as an adviser. Initial talks with Meltwater CEO Jørn Lyseggen focused on how Algo could monetize and access Meltwater’s clients, including 50% of Fortune 500 companies, providing a tool for data science and data mining.
"When it came to monetization, we didn’t know where to turn, so that’s one of the major reasons for the acquisition," Michelsen said. "Meltwater has awesome distribution and monetization."
Eventually, those talks considered the possibility of Meltwater bringing on Michelsen and adding Algo to its services. The deal was finalized on June 20.
Serving as advisors for Algo were Rok Sosic, the engineer behind the first Linux Grid Cluster, and Eric Nyberg, a professor at Carnegie Mellon University that led development on IBM Watson. Rama developed the app’s back-end with Sosic.
Michelsen, Rama, and Onusic will join Meltwater. Nyberg and Sosic will be joining in an advisor capacity.
Using his background and insight in Silicon Valley, Michelsen will serve as a personal adviser to Lyseggen and advocate for the Meltwater brand, a role he’s familiar with. He will help Lyseggen identify acquisition targets, advise on his upcoming book, and promote his coinage "outside insight," which is about using external data to develop a forward-looking strategy.
"From a consumer standpoint, nobody knows the name Meltwater, [while Algo has] millions of downloads and 20,000 four-star-plus reviews," Michelsen said. "So the idea was combining the two would be great. My background in Silicon Valley is being an all-around utility player – my talents are complementary to Meltwater and Lyseggen."
Michelsen was also part of the failed Lady Gaga-backed venture, Backplane, a social network builder that burned out and sold its assets in 2016. He said that chapter taught him he worked better as an adviser than a CEO.
This marks the latest of several companies Meltwater has acquired in less than a year, including most recently data analysis startup Cosmify earlier this month. The company has also acquired big data solution provider Klarity, Oxford University spinout Wrapidity, Encore Alerts, and Infomart.