Chain analysis, a company that makes software for stock market investors and financial advisors, has raised $ 5 million, according to an SEC filing and confirmed by its CEO and founder Marc Chaikin. It is part of the company’s strategy to enter a new market that could allow it to be acquired. The fundraiser is just one of several developments at the company, including a new Paoli office and a new product that, according to Chaikin, increased sales 100 percent in 2014.
Supporting asset managers through “taming big data”.
Founded in 2009, the company has so far committed $ 1 million. Chaikin declined to name the investors currently participating. From 2010 to 2013, the company raised $ 4.8 million from angel investors, the spokeswoman (and Chaikin’s wife) said Sandy Chaikin. One of these investors is based in Florida Christopher Castroviejo, according to SEC filings.
The new product
Chaikin Analytics’ flagship product is a subscription-based investment analysis app launched in early 2013 that predicts the future performance of stocks. The software tells them which stocks to choose and which to stay away from. As Chaikin puts it, the company helps people who manage money make money by “taming big data.”
“Information overload is everyone’s biggest problem these days,” he said.
Her clients are high net worth individuals who make up 40 percent of their sales and financial advisors who make up the remaining 60 percent.
Before the company launched its new product, it offered a “freemium model” with a free iPhone app and premium services. The subscription-based product, which costs $ 195 per month for individuals and $ 250 per month for financial advisors, drove sales up 100 percent to $ 1.3 million in 2014, Chaikin said.
The new product was actually inspired by an old product.
In 1992, Chaikin sold his equity research firm Bomar securities to a subsidiary of Reuters called Instinct for $ 8 million. Chaikin served as VP of Instinet for six years while Reuters incorporated Bomar’s equity research product into its own. Over time, the Bomar product was phased out with new product versions. Chaikin’s former clients came back to him for the past two years asking for a similar product, he said.
The current leadership of Chaikin Analytics comes from Reuters and Instinet: CTO Laura Trumbullwho has held a number of managerial positions Reuters and Thomson Reuters, and President, Davis Gaynes, former Vice President of Instinct.
Last May, Chaikin opened an office in Paoli and consolidated its two offices: one in Chester Springs and one in Philly’s Queen Village neighborhood. The reason? He wanted his team in one place, and many of his employees had left the city for the suburbs when they started having children. He also wanted to be close to the talent pools of big companies like big for recruiting purposes vanguard and Sungard.
Chaikin, 71, lives in Queen Village. He bucked the trend of Philly tech companies moving from the suburbs to the city, and besides, you don’t see a CEO further from home every day, but Chaikin said it was the “next logical step.” because so many of his employees had left town. (The family problem seems to be rising up in conversations about whether the city can hold on to talent and keep its tech scene alive.)
Even so, the reverse commute is “terrible,” said Chaikin. (“The biggest obstacle [for a Philadelphia tech company] is the Schuylkill Expressway. ”) His solution? Corporate apartments. They are also for CTO Trumbull, who lives in Stamford, Connecticut, and President Gaynes, who lives in New York City.
The next step for Chaikin Analytics is to enter the hot “smart beta” market. That means the company plans to develop automated investment strategies that companies create “investment vehicles” like ETFs (think Vanguard First trust) can license. Evidence That Smart Beta Is Hot? NASDAQ recently announced that it will buy Dorsey, Wright and coworkers, a Virginia-based company specializing in the practice, for $ 225 million.
Is an acquisition the ultimate goal for Chaikin?
“I would say so,” he said. “There is a possibility that we will go public, like for example Wisdom tree, but ultimately, since we have angel investors who have supported the company so far, an acquisition would make the most sense. “
“You have to be flexible and see where the market is going,” he said, adding that the market shows the way to acquisitions.
He also wants to increase his workforce from 15 to 25 this year.