At the intersection of big data and real-time information, Dataminr Chairman and CEO Ted Bailey told CNBC Friday that his start-up aims to make sense of the disparate Twitterverse to give finance clients a profitable edge.
Dataminr, No. 13 on the 2014 CNBC Disruptor 50 list, pays for access to the public Twitter stream, and uses powerful algorithms to turn some 500 million tweets per day into actionable alerts," he said on "Squawk Box."
Using the recent siege on Iraq's largest oil refinery by militants as an example, Bailey said: "We were able to detect that and alert our clients on Wall Street to that conflict and its potential disruption over six hours ahead any single other source they had access to."
The Dataminr co-founder described how it works. "Our algorithm really plays on both sides … both detecting information around the world when it ultimately emerges first via Twitter and being able to cluster together messages that are similar."
Once messages are clustered, Dataminr's mathematical equations then try to determine whether it's likely the information is correct, by searching for a signature on Twitter similar to other messages of that nature. "It's a very distinct pattern that we spot," explained Bailey, who started the company in 2009 with his former Yale roommates.
He was cagey when asked about the impact on his company should Twitter ever decide to do this data-dissection itself. "We're part of the Twitter ecosystem. They are very supportive of their ecosystem. I think we're a very natural independent company."
Backed by Venrock and Institutional Venture Partners, Dataminr has raised about $50 million, and claims more than 50 financial firms with over $500 billion in combined assets under management as clients.
Bailey said Dataminr is expanding into news, and hopes to tackle the need for actionable information in the fields of public relations, advertising and health care.
—By CNBC's Matthew J. Belvedere