Premise, which gathers real-world economic data by paying people to snap photos and record prices of products in their local markets using the company’s free Android app, just raised $50 million dollars in new investment. Premise sells its data to clients, such as Bloomberg and Standard Chartered Bank, that want a better, faster understanding of consumer prices and inflation than official government statistics supply. Premise also has clients such as the UN and the World Bank that want a better sense of economic conditions on the ground and whether development money is actually getting to its destination.
Premise, one of Fast Company‘s 50 most innovative companies of 2015, will receive $35 million of its new funding from Valor Equity Partners, the same folks who helped get Elon Musk’s Tesla and SpaceX off the ground. Valor’s founder and CEO, Antonio Gracias, will join the board of Premise, along with former Harvard president and Treasury secretary Larry Summers, who joined in July–not bad for a company that only launched in October of 2013.
“It’s development economics that’s entirely situated in the country itself,” says Premise CEO David Soloff, who cofounded Premise with Joe Reisinger, an expert in machine learning and language processing and an alum of Google and IBM .
With its Android app, Premise puts data gathering in the hands of ordinary people who record details like the price of a 64-ounce bottle of apple juice or of a one-way, 50-kilometer bus ticket. Users also snap a photo, which Premise analyzes with its computer vision system to help verify the facts. The system has gotten so good that usually a photo is all that’s needed to determine what the item is and read the price tag.
Premise contractors get paid per accepted (i.e., accurate) post and can do as many or as few as they want. The fees vary by task and geography–from a few cents to 50 cents or more. The app creates assignments in real time, dispatching people to the places where data is most needed–a bit like Uber or Lyft for information collection. “You have people earning 40, 50, 60 dollars [a week] now in countries like India or Indonesia or Ghana or Nigeria,” says Soloff. “That can be very significant.” People who live where those sums are significant often can’t afford iPhones, which explains why Premise only has an Android app so far. But that could change as Premise is also expanding its data-gathering in richer countries, especially the U.S. Premise says it has paid out nearly $3 million in fees so far.
Premise has gotten a lot of love in the press–especially in the past year–with coverage in outlets including Forbes, [the New York Times and the Wall Street Journal. But Soloff is troubled by some quasi conspiracy theories of how his company’s economic data is being used. “I’ve read coverage that talks about Premise where there’s some like mysterious hedge fund trader somewhere that is tracking information in some country that is, you know, 15 time zones away, and they’re mysteriously using this information to like profit from some trade,” he says. “I know our customer base really well, and we don’t have anyone who fits that profile.”
That said, Premise does count hedge funds among its clients. Premise does not disclose which hedge funds it works with or how they are using the data.
Premise’s data collecting now extends well beyond recording prices at markets. In the Philippines, its observers are helping the government see if businesses are complying with a new cigarette tax. In a sub-Saharan East African country (which Premise won’t name), it’s working with a Fortune 500 company (which it also won’t name) to figure out how many homes in a region have electrical service. Using thousands of photos of homes, Premise trained its image analysis to recognize, from a picture of a house, whether or not that building is connected to a power line.
Premise is also using photos to determine if roads that were meant to be built actually were, and if people are using them. In Brazil, it has tracked both the price of bottled water and whether public water taps were working in order to gauge the severity and extent of the country’s massive drought.
Although Soloff doesn’t expect to turn a profit for several years, Premise is not a charity, as today’s investment and the parties backing the company make clear. But Premise does a lot of work for governments and NGOs that is designed to benefit people on the ground. “We do really believe that there is sort of a double bottom-line business to build here. One, to…build a very large, very profitable company, but also to build one that is net positive in a social agenda,” says Soloff. “I don’t think they’re mutually exclusive.”