The San Francisco-based company uses machine learning and advanced analytics to identify patterns in email, online documents, voicemail and social media — helping law firms, corporations and the U.S. government tackle one of their biggest headaches, which is their massive and growing piles of unstructured data. One of Recommind’s clients is the SEC, for example, which began testing Recommind’s software two years ago, and six months later signed up its roughly 1,200 employees to the service.
Recommind prides itself on having raised just $22.5 million from investors, much of it last fall. As a result, its CEO, Bob Tennant, insists Recommind is in no rush to do anything other than perfect its newest offerings. Still, the company is nearly 14 years old. And with over $70 million in 2012 revenue (the company’s 2013 revenues are still with the auditors), it’s hard not to wonder what’s next for the company, so I asked Tennant. Our chat has been edited for length.
You’re excited about a new platform that makes building cloud-based applications for big data technologies really easy. On the most basic level, how does it work?
A typical enterprise app might have million lines of code, which is a lot to [write] from scratch. It’s a little like cooking a meal. You start with some ingredients and put them together in a particular way and, voila, you have an outcome. Now, maybe you cooked everything from scratch, including grounding the flour yourself, but most of us prefer to buy ingredients that are semi or fully prepared. That’s what we’re doing here. One way is to write code from scratch; another is to snap together components. And there’s been a big set of components missing, and we think we’ve got the stuff to fill the hole.
You’ve traditionally specialized in e-discovery but say this new platform extends to a host of other applications. Can you elaborate, and what industries are you targeting?
One broader set of applications we call information governance, which is the migration of data and the legally defensible deletion of data. For example, we’re about to close a big deal with a big bank that needs to deal with the e-discovery process, but whose IT department also wants to be able to get rid of data — just delete it, and you can’t do that; you have to [first] satisfy the SEC and the Department of Justice and anyone who might have claims to it.
Other verticals we’re focused on include insurance, healthcare, technology and energy, so with regard to tech, we do a lot of work for Google and Cisco. Another client is TransCanada [the company seeking to build the Keystone XL pipeline]. Seven of the top 10 banks also use some version of our software, as does the SEC …[and] FINRA, the self-regulatory body, which uses us as its primary investigative tool.
Why haven’t you gone public yet? Reports suggested that you might go out in 2013.
We’ve never said that. We’re putting the infrastructure in place to be ready to go public, but we’re not committed to doing that. We don’t have a ton of VC backers [to satisfy] and we’re not burning through cash such that we need to raised bigger and bigger amounts of money.
Are you open then to another private financing round?
Yes. We won’t go [public] unless we think we’re completely ready to go out [and] there may well be investment needs prior to the point at which we have all our ducks in a row.
In the meantime, how does a 14-year-old company keep its engineering talent engaged? Have you allowed employees to cash out some of their holdings on the secondary market?
We haven’t, but we also don’t have a lot of the same pressure that Silicon Valley companies do, partly because a lot of our engineering work is done in Germany, and those folks aren’t being called every day to go to Twitter. We don’t have trouble attracting talent here, either, because the technology we’re developing is really cool in terms of what it will do from an architectural perspective. It’s unique, no one else is doing it, and that’s even more attractive to engineers than popping [a] stock [the day of its IPO].