By Sanford Bragg April 9, 2021
Since raising capital in 2019, UK-based Neudata, which specializes in identifying alternative data sources, has been on a tear adding new services, expanding internationally, and hiring staff. Although the pandemic has not been kind to alternative data providers as a whole – at least so far – Neudata seems to have benefited from increased interest in alternative data over the last year. Perhaps that is a leading indicator of better times for alternative data vendors.
A modest $1 million angel raise in July 2019 was a catalyst for the firm’s expansion. Neudata opened a New York office in January 2020 then started a Shanghai office four months later, hiring a former UBS Evidence Lab salesperson to head it.
About the same time, the firm launched its MetaHub service, which allows clients to permission user access to dataset information and to upload their own dataset notes. In September 2020 it added a compliance service, Neudata Sentry, which offers compliance evaluations of data vendors. The company has also begun offering training courses and news about the alternative data marketplace.
Mid-year 2020 Neudata, which claims to be the ‘only objective and neutral data scouting FinTech firm’, introduced Neudata Provider, which offers data vendors premium services allowing customization of database listings, as well as discounted meetings with buy-side contacts and intelligence about marketplace trends.
Neudata says that it takes steps to maintain its researchers’ objectivity. “A provider’s status of standard vs. premium is completely siloed from the research offering,” wrote spokesperson Sondra Campanelli in an email. “Researchers do not factor a vendor’s premium status into their analysis of a dataset.” In addition, unlike arch-rival Eagle Alpha, Neudata does not charge sales commissions or revenue-shares for buy-side introductions.
Neudata’s frenetic activity during 2020 included adding staff. The firm currently has thirty-eight full-time employees, up from sixteen as of its 2019 capital raise. The firm is currently recruiting for five open positions, including a senior role designed to increase penetration in the corporate and private equity verticals. The new hires suggest that Neudata will soon overtake the staffing levels of Eagle Alpha, which recently changed CEOs.
The firm’s core service is the Neudata Scout platform, which provides reports on over 5,000 datasets, allows comparisons across 100 factors, and includes 120+ Intelligence Reports.
Neudata was founded in 2016 by Rado Lipuš, who previously worked for the TIM Group, I/B/E/S, Barra, PerTrac, 2iQ, and S&P Capital IQ selling data and analytics to the buy side. The firm has been expanding since pivoting its business model from sales agent to data scouting service.
Many experts expected the pandemic to be a watershed moment for alternative data. UBS Evidence Lab head Barry Hurewitz compared the pandemic’s impact on alternative data to the Gulf War’s impact on 24-hour news: “In the midst of this current crisis, people are having a similar moment with alternative data in that it’s helping people see what is going on in real time.”
However, the reality has been more prosaic for most alternative data vendors, judging by our own alternative data source: employee registrations on LinkedIn. Our index of 22 alternative data vendors (now excluding 7Park Data) indicates that employee registrations increased 0.2% during 2020, hardly the boom many were anticipating. Neudata has noted growing numbers of datasets disappearing as vendors exit the business or decide to no longer sell their data to the financial sector.
We have been viewing consolidation in a positive light, bringing supply more in line with demand. In the same vein, Neudata’s expansion could be a leading indicator for future alternative data demand, as potential purchasers shop the Neudata catalogue. However, the industry trajectory is looking more like a maturing market than a growing one. Employee registrations began slowing in 2019 before flattening in 2020, the year that was hyped to be a gamechanger. Alternative data vendors may be justified in wondering when Neudata’s customers will stop window shopping and start buying.
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