Thinknum Distributes Alternative Data Through Citi

Thinknum, a NY-based firm that provides alternative data culled from the web, allowed Citi to offer a subset of its data through Citi’s capital markets portal, according to an article in Business Insider.

Citi Velocity, the bulge firm’s capital markets portal which provides access to research, commentary, analytics and proprietary models, has over 82,000 institutional investor users, according to a 2017 Citigroup presentation.

Thinknum, primarily serves hedge funds, but has been expanding sell side usage over the last year.  It recently began targeting corporates and is growing quickly in that segment, according to co-founder Justin Zhen. The firm’s flat fee of $800 per user per month is priced to be broadly attractive across client groups.  The firm also offers a higher fee API option that is priced on a team to team basis.

Thinknum offers 70 datasets and covers 400,000 public and private companies. The platform focuses on public data such as government contracts, product pricing data, store locations, as well as extensive social media data from sources such as Twitter, Facebook, Instagram.

Data is organized by ticker, allowing users to cycle through various data sources relevant for a company, including employee registrations on LinkedIn, job listings, product discounts, and Facebook and Twitter followers, among other metrics.

The company originated in 2014 as a financial model sharing site, similar in concept to GitHub which allows programmers to share open source code.  Zhen was previously a hedge fund analyst and co-founder Gregory Ugwi worked as a strategist at Goldman Sachs.  The two met while attending Princeton University.

The firm pivoted its product focus in 2015 from model sharing to gathering alternative data because hedge fund clients were asking for alternative data inputs for their models.  The firm is currently at 20 employees, primarily based in its NY offices.  Thinknum was funded with an initial seed round of approximately $1 million in 2014 through the accelerator 500 Startups.  According to Zhen, the firm is profitable and so it does not require additional funding.

Our Take

Citi’s large institutional client footprint makes it an interesting distribution partner, particularly if Thinknum can upsell Citi clients to subscribe to the Thinknum platform.  It is our understanding from sources familiar with Citi’s platform that Citi does not provide access to Thinknum’s raw data, which will help allay concerns among Thinknum’s current hedge fund clients that broader distribution would dilute the value of the firm’s data.  Thus, the distribution arrangement with Citi seems like a sweet deal for Thinknum.