1 November 2006< Go back
November 2006, Hakia Raises $11 million - Red Herring magazine
Hakia said it has raised $11 million in its first phase of funding from a panoply of investors scattered across the globe who were attracted by the company’s semantic search technology, which the upstart aims to make superior to Google’s search engine.
The New York-based company said it decided to snub the usual players in the venture capital community lining Silicon Valley’s Sand Hill Road and opted for its international connections instead, including financial firms, angel investors, and a telecommunications company.
Sand Hill Road
Among them were Poland’s Prokom Investments, an investment group active in the oil, real estate, IT, financial, and biotech sectors.
Another investor, Turkey’s KVK, distributes mobile telecom services and products in Turkey. Also from Turkey, angel investor Murat Vargi pitched in some funding. He is one of the founding shareholders in Turkcell, a mobile operator and the only Turkish company listed on the New York Stock Exchange.
In Malaysia, hakia secured funding from angel investor Lu Pat Ng, who represented his family, which has substantial investments in companies worldwide.
From Finland, hakia turned to Dr. Pentti Kouri, an economist and VC who was a member of the Nokia board in the 1980s. He has taught at Stanford, Yale, New York University, and HelsinkiUniversity, and worked as an economist at the International Monetary Fund. He is currently based in New York.
In the United States, hakia received funding from Alexandra Investment Management, an investment advisory firm that manages a global hedge fund.
Also from the U.S., former Senator and New York Knicks basketball player Bill Bradley has joined the company’s board, along with Dr. Kouri, Mr. Vargi, Anuj Mathur of Alexandra Investment Management, and hakia CEO Riza Berkan.
Dr. Berkan founded hakia back in 2004. He has been developing the company’s semantic search technology with help from Professor Victor Raskin of PurdueUniversity, who specializes in computational linguistics and ontological semantics, and is the company’s chief scientific advisor.
Contending with Google
They hope to provide better search results with complex queries than Google currently offers, but they have a long way to catch up, considering Google’s vast lead in the search market, sophisticated technology, and rich coffers.
Hakia’s semantic search technology aims to understand the meaning of search queries to improve the relevancy of the search results.
Instead of relying on indexing the web or on the popularity of particular web pages, as many search engines do, hakia tries to match the meaning of the search terms to mimic the cognitive processes of the human brain.
“We’re mainly focusing on the relevancy problem in the whole search experience,” said Dr. Berkan in an interview Friday. “You enter a question and get better relevancy and better results.”
He hopes to offer an infrastructure to support complete semantic search but admits that “it’s a big task and is really going to take a while to be perfected.” The company is currently beta testing the search engine at its web site and previewed it at the Web 2.0 Summit in San Francisco last week.
Dr. Berkan contends that search engines that use indexing and popularity algorithms are not as reliable with combinations of four or more words since there are not enough statistics available on which to base the most relevant results.
“What we are doing is an ultimate approach, doing meaning-based searches so we understand the query and the text, and make an association between them by semantic analysis,” he said.
Avoiding Sand Hill Road
Dr. Berkan resisted VC firms because he worried they would demand too much control and push development too fast to get the technology to the product phase so they could earn back their investment.
He is a nuclear scientist who worked for the U.S. government for 10 years, mainly helping safeguard information.
When he met Dr. Raskin, he discovered they had similar ideas about search and semantic analysis, and by 2004 they had laid out their plans.
They currently have 20 programmers working on building the system in New York, and another 20 to 30 contractors working remotely from different locations around the world, including Turkey, Armenia, Russia, Germany, and Poland.
The programmers are developing the search engine so it can better handle complex queries and maybe surpass some of its larger competitors.