This company highlights the importance of using Big Data to drive business decisions
Since their founding in 2001, the company has developed software aimed at allowing financial institutions to make smarter pricing decisions based on Big Data.
Taking part in the round were previous investors Jerusalem Venture Partners (JVP) and Vintage Investment Partners, who were joined by newcomer Israel Growth Partners (IGP).
“This investment reflects our continued support and belief that Earnix is becoming the leading predictive analytics provider in the financial services industry,” commented JVP’s Managing Partner Raffi Kesten in his statement to the press.
According to the company, the funding will be used to accelerate Earnix’s growth strategy, taking aim at what they are calling a deeper dive into the banking sector and developing new products. While perhaps better defined as a small fintech company rather than a startup, due in part to their long time profitability, they have already raised $11 million since their start.
Alongside their announcement of the funding was news that Reuven Ben Menachem would be joining the company as their new Chairman. With a long history in fintech, he previously served as the CEO of Fundtech, another financial software firm. He is joined by former NICE Systems CEO and Director General of the Israeli Ministry of Finance Haim Shani, who comes to Earnix as a director on the board.
Smarter decisions through models
Earnix produces software that has the statistical models and algorithms to better determine the potential outcomes based on their clients’ data. The company says that their product has been used mainly for pricing and offering the customer the next thing that they might want, based on their previous behavior.
“We model their customer behavior to predict the way the customer would behave in the future,” a company spokeswoman told Geektime.
Through their models, they take the behavior from large amounts of anonymized users, usually in the millions, and use machine learning to predict not only what it is that they will want – either as pricing or in products – but how it could affect their business goals.
So let’s say that I am developing a new loan package for a bank. I could use the findings from Earnix’s software to better design a product that my customers have shown that they not only want but are willing to pay for at a certain level. As profit margins grow slimmer in a more competitive financial market, these kinds of advantages become more essential.
Looking towards the near future, we may see Earnix direct more of their efforts towards the insurance markets. The company’s CEO David Schapiro spoke recently with Geektime about the up and coming autonomous car movement. With the new technology making its way onto the roads, he sees it having an effect on how risk should be rated on insurance for this vehicles. He notes that “The introduction of autonomous cars is going to happen in our generation, and there is going to be a transition period that needs to be assessed.”
Rather than raising concern, Schapiro and co see the change in the market as “a big opportunity” for companies like his that have built up an expertise in predictive analytics.