Two Sigma Invests in Startup That Handles Unsexy Side of Data

(Bloomberg) -- The conventional wisdom that big data will transform investing misses one nagging detail: working with giant data sets can be a hairy, time-consuming mess.

Two Sigma, the quantitative hedge fund run by David Siegel and John Overdeck, is investing in a startup that’s trying to solve data headaches for financial firms.

The New York-based firm took a minority stake in Crux Informatics, a startup focused on making big data tidier and easier for customers to use. Terms of the deal, announced in a release on Thursday, weren’t disclosed.

Crux doesn’t sell data of its own. Its specialty is handling the grunt work that goes along with using data: unpacking it, weeding out inconsistencies, standardizing and smoothing it. Two Sigma will use Crux’s “data wrangling” services.

“It’s like dehydrated food,” Crux Chief Executive Officer Philip Brittan said in an interview. “You’ve got to put water on it to make it come back to life.”

The arrangement will free up the data scientists at Two Sigma and allow them to do more meaningful work extracting insights, said Ali-Milan Nekmouche, chief data strategist at the hedge fund.

“We’d like to factor out the part that is generic,” Nekmouche said. “We hope this will help give our folks more time to focus on higher value, more esoteric data science.”

Goldman Sachs Group Inc. led a $10 million investment round in Crux last November. It was joined in March by Citigroup Inc., bringing the total raised by Crux to $21 million, according to a company announcement. In addition to crunching data for companies, Crux helps businesses find customers for their data sets.

Brittan previously led product development for Thomson Reuters Corp.’s financial and risk division, and was global head of business and product strategy for Google Finance. Earlier in his career he was global business manager for foreign exchange at Bloomberg LP, the parent of Bloomberg News.

To contact the reporter on this story: Annie Massa in New York at amassa12@bloomberg.net

To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Alan Mirabella

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