After being acquired in 2018 for $100 mln by private-equity firm Vista Equity Partners, alternative data aggregator and analytics provider 7Park Data was recently folded into another one of Vista’s portfolio companies, Apptio, effectively shutting down the stand alone alt data provider.
7Park Goes Dark
According to an article published by Business Insider, private equity firm Vista Equity Partners recently shuttered one of its portfolio companies, 7Park Data, and folded 100% of its assets into another of its portfolio companies, software firm Apptio. Vista acquired alt data provider 7Park in late 2018 for $100m mln.
The reason for folding 7Park into Apptio is related to a couple of factors, including key staff defections and a management change, the loss of a few critical data sources, and significant client cancellations. People familiar with the company say that 7Park lost more than 50% of its revenue since being acquired by Vista.
In late 2018, Google announced new privacy restrictions limiting how developers could use data that was collected from Gmail accounts. This change left 7Park scrambling as it eliminated a huge source of e-mail receipt data – a dataset that was extremely valuable to many of 7Park’s customers. At the time e-mail receipt data was one of 7Park’s best sellers.
Another key dataset 7Park lost was provided by software security firm Avast’s marketing analytics subsidiary Jumpshot. Jumpshot sold user data and browser histories from over 100 million devices collected by Avast’s security software. Avast shut down Jumpshot’s access to this data in January 2020. At that time, Jumpshot data was include in 10% to 15% of 7Park’s products.
7Park’s loss of these and other key datasets impacted the alt data firm’s revenue as a number of large hedge fund customers cancelled their subscriptions with 7Park in response. Ultimately, Vista decided that 7Park’s plunging client and revenue base could not support the business on a standalone basis.
Our Take
7Park Data was founded in 2012 by two of the top salespeople from Majestic Research (now rebranded as M Science). In August 2015, 7Park announced a $3 million Series A funding and raised $6 million in a subsequent financing round. 7Park Data broadened its customer base from hedge funds to corporates in 2015 and launched analyst-authored Insight reports in 2016. It enhanced its analytic platform in 2017 and launched a healthcare dataset at the end of 2017. The firm was acquired by Vista Equity Partners in late 2018.
The closure of 7Park should not be taken as a sign that demand for alternative data is on the decline. Instead, this sad development highlights the tremendous business risk for alt data firms that aggregate and analyze third-party data sets, versus those that generate or collect their own proprietary data. This is particularly the case in the current environment as many of the “rules of the road” like internal privacy policies or broad-based legislation for alt data sources are still being established.
In Vista’s case, the only valuable asset it walked away with from in the 7Park debacle was its technology platform. In the past few years, 7Park had developed an AI platform that can ingest, clean, and transform unique datasets and return enhanced analytics for internal use. An Apptio spokesperson said in a statement that the company was “poised to enhance our robust IT Benchmarking solution as well as provide additional machine learning-driven data cleansing and auto classification capabilities” with the 7Park platform. This sounds to me like an awfully expensive technology purchase.