Ness Raises $15M for Recommendation Engine to Build Partnership Opportunities

Ness Computing, a startup tackling the increasingly popular science of providing accurate personalized recommendations, today announced a new funding round of $15 million. The oversubscribed Series B round was led by SingTel’s investment arm Innov8, and American Express Ventures, with participation from existing investors. The funding follows a $5 million Series A round from July 2011 led by Khosla Ventures. The new funding, and its source, reflects the startup’s goal of seeing how its tech can be used in combination with select strategic partners to reach as broad an audience as possible.

“The two companies collectively represent over 500 million consumers,” Ness CEO and co-founder Corey Reese said in an interview. “American Express is the second-largest credit card processor by transaction volume, and SingTel is the second-largest carrier in the world through their operating group of companies. Through the discussions we had with their leadership organizations and technologists, we realized their was a fairly high degree of overlap between their view and our view of the future of personal and mobile commerce, which is ultimately what our business is about.”

For the most part, Ness will still concentrate on building its core brand, and extending its suite of products for iPhone beyond its current focus of providing restaurant recommendations based around a “Likeness Score” intended to match customers with the best possible matches according to their personal preferences. Using that same Likeness Score, Ness now hopes to tackle other verticals, including shopping, events and movie recommendations.

Ness isn’t the only one trying to use machine learning and leverage big data to provide better personalized recommendations. Hunch, acquired by eBay in 2011, is now available as an API for companies who want to provide recommendations based on a user’s “taste graph,” and provides branded recommendation apps for consumers centered around movies, music, and real-life activities. Reese says that Ness is all about building a brand and a service that users can access now and in the future, noting that partnerships and licensing deals will come later, and even then only on with a few select companies where its use makes the most sense.

“We want to create products that are intuitive and really a delight for people to use, and really focus on that end consumer experience,” he explained. “As important as all the technology is, building a product that resonates with people on an emotional level is just as time-consuming and just as challenging. To that end we’ve put together a design studio with four product designers. That’s something that Hunch didn’t really focus on as much.”

Once Ness nails the consumer experience (where it plans to explore revenue opportunities like affiliate programs for online retailers), then the startup will begin looking at partnership, the opposite approach from Hunch’s broad-based licensing approach. “We want to focus first on the consumer experience, demonstrate that working really well, and then select a handful of partners to integrate with, and that can sort of lead you to think about ways we might integrate with someone like American Express or SingTel,” Reese said.

This money will specifically be used to fund the hiring of additional engineering talent to support Ness’ growing needs on that side of the equation, with a particular focus on individuals with machine learning expertise, Reese says. That’s the kind of employee that’s recently been in very high demand in Silicon Valley, but Ness now has the money in the coffers to make it happen, and the backing from future prospective partners with deep pockets to build its army as this space continues to heat up.

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