By Anna Irrera
NEW YORK (Reuters) - Goldman Sachs Group Inc led a $10 million investment in Crux Informatics Inc, a U.S.-based technology startup that enables financial institutions to outsource the processing of data to gain business insights.
Crux, which has teams in New York and San Francisco, will use the funding to expand its business and hire more staff, it said on Wednesday.
Goldman Sachs invested through its Principal Strategic Investments division, which backs young financial technology companies.
Financial firms recently have become more interested in utilizing large and diverse sets of data to inform their business strategies.
While appetite for so-called "big data" has grown, many institutions still spend much of their time scrubbing and formatting the data to make it usable, rather than analyzing it through sophisticated techniques such as artificial intelligence.
Often the same data set will be processed multiple times by different firms.
"The emergence of unstructured data as an important input into the investment process creates a great opportunity for financial institutions, but only if actionable insights can be extrapolated from it," Darren Cohen, global head of Goldman Sachs' Principal Strategic Investments group, said in a statement.
Crux's platform processes the data for financial firms, including banks, hedge funds, private equity groups and insurers, so they can focus resources on carrying out more differentiating tasks such as building artificial intelligence algorithms to extract value from the information.
This removes the biggest pain point, or "crux" of data analytics in finance, said Philip Brittan, chief executive of Crux.
"Everyone is looking at how to get more data and how to get more value out of the data that they have," Brittan said in an interview. But "firms spend the majority of their data time on stuff that is not differentiated," he added.
Crux does not sell or resell the data, but has established a network of information suppliers to help clients discover new sources.
The company started operations almost a year ago and signed up its first clients in the summer, Brittan said.
Other strategic investors participated in the funding round, he added, but did not disclose their names.
The investment underscores how large financial institutions are increasingly turning to young fintech startups for help in dealing with some pressing needs, from managing and analyzing data to running more efficient compliance processes.
(Reporting by Anna Irrera; Editing by Dan Grebler)