New York City-based data discovery platform, Nomad Data, recently raised a $1.6 mln seed round to build out its search platform to enable data consumers to easily find specific datasets to address their unique use cases.
Nomad Data’s Capital Raise
Data oriented search engine provider, Nomad Data, recently closed $1.6 mln in a seed investment round from a number of institutional investors including Bloomberg Beta, Alumni Ventures, Great Oaks Ventures, Correlation Ventures and DataFrame Ventures.
Brad Schneider, Nomad Data founder and CEO, explained the rationale for these investors, “Our investors shared the view that in the future, all business decisions will be backed by data and that when we become the onramp to this resource, an enormous amount of value will accrue to the company. My background also gave investors confidence. I’ve been a technology investor, data buyer, and analytics vendor in my previous professional roles and am a second-time founder.”
Schneider was previously founder and CEO of alt data aggregator Adaptive Management. Adaptive Management’s DataMonster platform was sold to Knoema in February 2020. Earlier in his career, Schneider spent almost 2 years as a PM at Tiger Management, 2.5 years as Technology Sector Head at Jericho Capital, almost 6 years as an equity analyst at Palo Alto Investors, and 4 years as Head of Business Development at predictive analytics company InfoLenz. Brad holds a Bachelor of Science degree in Electrical Engineering and Computer Science from the Massachusetts Institute of Technology and is a CFA charterholder.
Nomad Data was founded in early 2020 to help data consumers easily find which data providers can help them solve the unique business problems they are trying to address. The firm has created a marketplace where potential data consumers, including investors, consultants, corporations, and others can anonymously enter their granular use cases and get matched up with only the providers who have the data to answer these business questions. In addition, Nomad Data provides a venue where nontraditional data providers can commercialize their internal datasets.
Nomad Data’s recent $1.6 mln capital raise shows the continued interest the VC community has in the alternative data space. A few months ago, Nomad Data also closed a $1.5 mln seed round raised from angel investors.
The unique aspects of Nomad’s business model are that the firm is not positioned as a data dictionary provider, they don’t house any third-party data on their platforms like other alt data marketplaces, nor do they charge data vendors a transaction fee when users purchase their data. Instead, Nomad charges data consumers a monthly subscription fee for access to their platform to search for data vendors. Given the low barriers to entry for data providers, Nomad currently has more than 600 data suppliers on the platform, including a few well-known corporations who are confidentially selling their data on the platform.
The big question we have about Nomad’s business model is the difficulty in building a true data marketplace as this needs both a reasonable number of data suppliers AND data consumers to work. It clearly looks like Nomad is building traction on the supplier side, but it is less obvious they have been able to attract a significant number of data buyers to the platform.
While a subscription business model can be extremely attractive to the marketplace operator, the concern we have is whether data buyers will be willing to pay extra to find the right data in addition to the price of the data itself. Currently, most competing data marketplaces don’t charge data buyers to help them find the right data – the data suppliers pay a commission to the marketplace vendor for helping them find new clients. We will have to wait and see if Nomad can transform the data marketplace with its new approach to helping data consumers more easily find the right data to make business and investment decisions.