A new London-based analytics firm that trawls sites such as Twitter and Facebook for information that can be used to help investors, has launched.
Knowsis is pitching a social media analytics API that traders can integrate into their desktops to help extract value from Web chatter that can be used to analyse behaviours and identify trends in the futures and equities markets.
The start-up says it retrieves data from thousands of "alternative alpha sources" and then applies "natural language processing and machine learning techniques" to make sense of it.
Launching this week, Kowis was set up earlier this year by former Unicredit equities salesman Oli Freeling-Wilkinson and Mark Unsworth, who used to work at music download service 7digital. They have received financial backing from Method Investments & Advisory.
Freeling-Wilkinson told Financial News that the explosion of data available on the Web is increasingly hard to harness but "we have paid a lot of attention to data quality and have developed an automated system that allows us to identify only the most relevant pieces of content out there".
Several firms in the past have tried to tap social media chatter for trading, with one - Derwent Capital Markets - launching a £25 million Twitter sentiment-based hedge fund. The fund lasted just a month, however, before being shuttered, with the company instead deciding to offer its technology to day traders through a Web site and mobile app.