The venture capital group that backed Lovefilm and Betfair has invested in a company that sets competitions for computer scientists to unlock complex data patterns, on behalf of companies and governments, for cash prizes.
Index Ventures has led the $11m (£7m) funding round for Australian start-up Kaggle alongside Khosla Ventures. Kaggle, set up last year, seeks to offer clients "solutions to some of the world's hardest problems by posting them as competitions to a community of more than 17,000 PhD-level data scientists around the world".
It has already run competitions on behalf of Nasa, the US insurance giant Allstate, Ford and there is currently a $3m prize on offer from Heritage Health around reducing billions of dollars in unnecessary hospitalisations.
Max Levchin, the founder of PayPal, has invested and been appointed chairman, while Index partner Neil Rimer has joined the board. Mr Rimer said as groups hold more data then ever before they struggle to do anything useful with the information.
Kaggle's model "is changing the way data is used to run more profitable businesses, to solve large social problems, and to find answers to some of the world's most difficult questions". He believes there is a huge opportunity as "billions of dollars are spent every year on services around data".
Each data scientist who participates develops algorithms to solve the problem set and is put on a real-time leaderboard. Once the competition closes the top entrants take home the prize.
Jason Tigg, a Kaggle competition participant, said it was not the first time a company had offered prizes to model data "but Kaggle has come along and made a business model out of it". He said the money was not the only factor, "there is also the kudos of beating other computer scientists out there".Reuse content