The search for meaning

New companies are racing to develop the next great search technology, but traditional VCs may be being locked out of the funding process. Dave Keating reports.

Enter the search terms “How many venture capital firms are located in New York?” into Google’s search page and you’ll receive over one million responses. You might think you’ve stumbled upon a treasure trove of information, but if you scroll through you’ll see none of the hits are particularly relevant to the question. In fact, it would appear none of these pages will give you an answer at all.

Melek Pulatkonak

Such is the dilemma of current search engine technology. Results are fast and expansive, but they can also be unwieldy and counterintuitive. The quest to solve this problem is being waged by both the large established search engines like Google, Yahoo and Ask, and new upstarts which are getting big infusions of cash.

One such company is New York-based Hakia, which has just raised $16 million in funding. The company is developing a new meaning-based search engine which they hope will mimic the brain’s cognitive skills The company was founded in 2004 by Dr. Riza Berkan, a nuclear scientist by training with a specialisation in artificial intelligence, Dr. Pentii Kouri, a New York-based economist, and Professor Victor Raskin, a father of ontological semantics and an international authority in computer linguistics. Together these three men decided to tackle the search engine problem by developing a system that can recognize human patterns of speech.

“We think the fastest, most reliable search engine in the world is the human brain,” says Hakia COO Melek Pulatkonak. “Hakia will provide direct answers to direct queries, working just like the human mind works.”

The hope is that instead of having to type in counter-intuitive keywords and sort through unrelated results, a configuration based on natural human semantics could create a search engine that is able to easily understand exactly what the person is looking for. The company is currently beta-testing the system and expects a full version to be ready by the end of 2007.

We didn’t want to be pressed for a time line, we wanted to have the freedom to do it right the first time.

Melek Pulatkonak

Hakia’s investors include an impressive sampling of international donors including Turkish mobile telecom services provider KVK, Polish investment group Prokom Investments, Malaysian angel investor Lu Pat Ng and Finnish economist and former Nokia board member Dr. Pentti Kouri. However what may be most notable about this list is not who’s on it, but who is notable absent: namely, any venture capital firms. The company decided to go around the usual Silicon Valley venture capital players for its funding round, citing concerns that VCs would demand too much control and demand results too soon.

“What we are trying to do is really academic, and it’s a hard task to do it right,” says Pulatkonak. “We didn’t want to be pressed for a time line, we wanted to have the freedom to do it right the first time. And our investors reflect the old visionaries in their countries, who would really like to do something great for web search technology.”

Pulatkonak adds that at the present time the company isn’t thinking about approaching VCs for any future funding rounds either. Should VCs be worried that they could be locked out of this emerging hot field? Not necessarily. Powerset, another new entrant to this field, is also working on developing a next-generation search engine based on a similar structure. The company recently raised $12.5 million and investors include several venture capital firms including Foundation Capital and The Founders Fund.

Powerset CEO Barney Pell says the company chose venture investors because they have the most extensive expertise in managing start-up companies.

“We targeted Foundation Capital and The Founders Fund to be our lead investors because of their entrepreneurial focus, proven track record of building and supporting successful companies, and their long-term perspective,” he says.