A Ballston company named Applied Predictive Technologies hit a home run for its owners and 300-plus employees this week when credit card giant MasterCard announced it was buying the firm for $600 million.
The potential windfall for everyone involved in the homegrown data analytics company that began in a spare bedroom overlooking Dupont Circle caused some Washington tech and venture capitalists to take a big gulp.
“This transaction is in unicorn territory, that elusive goal that all entrepreneurs and investors work toward,” said local investor Morris Panner, who sold a cloud computing company to a firm backed by then-Oracle chief Larry Ellison a few years ago.
APT’s three founders will probably reap tens of millions from the sale, which is expected to close by the end of June. APT’s employees, many of whom are math geniuses recruited from top colleges and even high school, could see varying windfalls.
“I don’t need big-data analytics to know that $600 million is a great day for everyone,” said Raul Fernandez, a local tech investor and vice chairman of Monumental Sports & Entertainment.
The 16-year-old APT has not disclosed its revenue, but it is believed to approach $100 million. The firm has offices all over the world, including in San Francisco; London; Bentonville, Ark.; Taipei, Taiwan; Tokyo; and Sydney.
The company will continue to be headquartered in Arlington’s Ballston area, where it has 200 employees.
“We will stay Ballston-based, but we will be growing faster,” APT chief executive Anthony Bruce said in an e-mail. “Our opportunity to grow and expand will be accelerated by this partnership, in Arlington and elsewhere.”
The firm’s software tracks the clues people leave in their everyday life to help Fortune 500 companies and others make strategic decisions.
APT’s “rapid experimentation” software tells a convenience store owner whether Snickers or lottery tickets will sell better near the checkout. It tells Victoria’s Secret which lingerie-clad supermodel creates the most sales. Wendy’s might ask whether it should put smoothies on its summer menu. Choice Hotels wants to know whether its sleek new furniture reels in new customers.
The company at one time boasted that $1 of every $5 in U.S. retail transactions ran through its database.
“APT’s world-class talent, technology and Test & Learn platform, matched with MasterCard’s analytics, will give our customers the advantage of enhanced and actionable decision making,” Kevin Stanton, president of MasterCard Advisors, said in a news release accompanying the announcement.
The idea behind APT began inside the head of math whiz Jim Manzi in 1988 when he told a business consultant about an elaborate test he envisioned for a bank and its entire fleet of branches. His colleague paused, then said simply, “Why don’t you put it in 10 bank branches and see what happens?”
A decade later, Manzi founded APT with two colleagues: Bruce and Scott Setrakian. Manzi, who is APT’s chairman, and Setrakian, its managing director, worked at Strategic Planning Associates, a business consulting firm that helps companies improve performance. Bruce was at McKinsey & Co.
APT spokesman Cathy Baker said in an e-mail that Manzi, Bruce and Setrakian will remain with the company and that their titles will not change.
APT received investments along the way from several heavy hitters in the financial industry, including $54 million from Accel-KKR in 2006 and $100 million from Goldman Sachs two years ago.
Asked whether there would be a downsizing, Baker said: “No, not at all. One of the reasons MasterCard acquired APT was the people.”