The touchpaper’s been lit to a commercial boom for Cambridge’s ‘new Autonomy’ – Featurespace Ltd.

Featurespace is already profitable and reckons it can hit world dominance without the need to raise further finance.

It has just gone into recruitment overdrive as it targets major expansion in Europe and the US. Founder and CEO, David Excell, said impending legislation that could liberalise online gaming markets in America in the next couple of years would “double the company’s market size at a stroke.”

The ‘new Autonomy’ tag is not fatuous. Autonomy CEO Mike Lynch is a non-executive director at Featurespace. And Excell says Dr Lynch has been an  inspiration behind the company’s drive for early profitability and commercial clout.

Based on world-leading research at Cambridge University and founded in Excell’s garden shed, Featurespace is helping corporations and industry sectors put a face on invisible customers – revolutionising the way in which e-commerce businesses gain detailed and constantly-updated understanding of each individual online client.

This includes startlingly accurate predictions about every customer’s future online behaviour, enabling cost-effective business decisions to be targeted precisely, for the best commercial advantage.

Featurespace’s analytics ‘learn’ over time, so the refinements become even more precise, giving a robust foundation on which to base important business decisions.

The technology can detect many different types of fraud, including credit card and first-party fraud, system abuse and account takeover. In terms of online gaming, it can indicate when player protection is needed on gambling websites. It ‘understands’ what motivates customers to spend more and therefore helps clients generate higher volumes of incremental revenue.

Featurespace’s products, which can also help clients benefit from cloud computing, are already beating the industry giants and scooped two top prizes at the EGR B2B Awards 2011 at Chelsea FC this week.

Excell was a scholarship student at Cambridge when he researched automated methods of studying human behaviour, for his PhD, studying with William Fitzgerald, Professor of Applied Statistics.

His research covered everything from military reconnaissance to airport security screening and city-centre CCTV monitoring. Convinced of the enormous potential for behavioural analytics applications, he and Fitzgerald launched Featurespace in 2005 from a shed in David’s back garden.

As work poured in and employees were hired – including graduates from Cambridge University – it quickly became too small and in 2008 Featurespace received seed funding so it could open offices in Cambridge city centre.

By December 2010, demand for products and a need for rapid headcount growth resulted in a Series A, £1m investment round that saw a mix of angel and VC backers queuing up to support the company.

The company continues to benefit from the latest research by world-class academics at Cambridge University. On its board are some of the IT industry’s best brains, including Karen Slatford as chairman and Fitzgerald as non-executive director. Investors include both local and global backers.

Excell told Business Weekly: “We are currently 14 people in Cambridge but urgently need to hire outstanding software developers, data analysts, and QA engineers and testers to take us to the next stage. Ideally we need at least another seven or eight people.

“We already have some significant customers in online finance and gaming and the opportunities for us globally are exciting. There are a lot of opportunities for us in Europe to exploit before we push across the Atlantic but once we have ticked those off our list we will certainly be looking at the US.

“Online gaming market legislation in the States could provide an additional opportunity that could see us double our market size.

“I honestly think we can get there without the need to raise any additional money. Mike Lynch has been very influential in teaching us to be very commercial very early in our life cycle and we have followed that mantra. The model has certainly worked for Autonomy.”

Excell and Lynch, who shared supervisors in their respective PhDs, are now on course to share global success with mirror images of world-class businesses – Autonomy helping organisations make sense of unstructured web information and Featurespace using similar core technology for very precise behavioural analytics.