Several 100+ million Dollar investments this year into Big Data and Cloud solutions, and we are only in April 2014! There is no doubt the Big Data is going to change everything as we know today. “By 2025 the Second (digital) Economy will be as large as the 1995 physical economy.” Brian Arthur, Santa Fe Institute— McKinsey Quarterly ( Mckinsey Article)

30 years to reach the scale in economic value that took the physical economy 200 plus years to achieve! No Wonder big data is attracting a lot of Venture capital. The race is on to find the hidden gems that will create massive value transfer in the coming years from non data driven companies and sectors: The irrefutable proof that this shift and growth of the second economy is going to happen came from creation of the trillion dollar club:

Once the first trillion has happened, everyone wants to jump on the bandwagon. Apple, Amazon, Google, Facebook, Netflix, and Pandora, which in 2003 had a combined market capitalization of $ 34.3 billion. By 2013, this figure had exceeded $ 1.2 trillion.

All these companies have created algorithms to personalize their content for every user. Through collecting data, they have managed to create connections between different preferences of different users. For example, on Pandora, just mentioning a couple of artists that you like will give you a highly personalized list of tracks, of which there is a high probability that you will like.

The same goes for Netflix. Behind Facebook’s success also lies their algorithm for the news feed, Edgerank. The algorithm helps decide what you see, and through your continued engagement understands what you would really prefer to see from among your friends.

Big Data is a tidal event, by tidal event I mean similar to the history of evolution when a certain type of species get wiped out and a new set of species get established. We are witnessing such an event and VCs do not want to be watching from the side. Here is a list of the companies that raised more than 100 million in funding so far this year!

 

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