The Data & Analytics musings of an equanimous mind

TL;DR - I’m going to write more about Data & Analytics

When I pressed send on my last post, I assumed that this next one would be about the 10-day Vipassana silent retreat I was about to go on. But while I was there, with nothing to read and no implements with which to write, I found myself thinking more and more about Data & Analytics. It’s amazing where the mind goes when you have no distractions!

I thought about all the time I have spent over the years studying Data & Analytics companies, meeting CEOs, researching and analysing Data & Analytics sub-sectors, studying the transactions that had taken place, and observing the strategies of the strategic and financial sponsor acquirers in the space.

Many different companies popped into my mind.

Some that we sold at Quayle Munro that no longer exist.

Others that we’ve know since they were very small, and are now large, but still independent and growing. With Intelligence (whose July 2023 investment from Motive Partners valued the business at over £400m, with around £25m of EBITDA) and Kpler (who recently announced that they had reached $100m ARR) I found revolving around my head more frequently than others.

Both With Intelligence and Kpler cover fast-growing, vibrant asset classes, and provide market-moving information. I feel a personal connection with Charlie Kerr’s With Intelligence - Charlie is a family friend, and it’s been a privilege to watch the business’ journey under his direction. Kpler I remember spotting when it was founded in 2014 and feeling sure that it would be a success. So perhaps there my ego was providing me with validation of my own research skills and industry understanding!

We have tracked 1000s of Data & Analytics businesses like these during my professional career, and the Corporate Finance firms I worked at advised on 100s of liquidity events (hat tip to my mentor Andrew Adams, the guru of Data & Analytics M&A advisory, for everything he has taught me over the years).

Data & Analytics is a big market, but somewhat opaque. Companies constantly fly under the radar, disguising themselves as services or software businesses. And new companies with proprietary datasets are launching all the time, covering new sectors, or using new ways of gathering data, or comparing datasets in new and innovative ways. Or serving new industries.

At the retreat I found myself wondering:

• How big is the Data & Analytics market now?

• What solutions exist for understanding the Data & Analytics market?

• What has the impact of ChatGPT been on specialist data providers?

• What cool new Data & Analytics companies are out there now?

I had no way to answer those questions at the time (no phone and no internet access!) but I have spent a little time digging since I returned to normal civilisation. Attempting to answer these questions will probably occupy my next few posts.

To answer the first question - how big is the Data & Analytics market? - Amass Insights currently lists 22,263 Data & Analytics providers in their database. My gut reaction was that this is a big number. Bigger than I had thought. But it’s not huge compared to, say, a highly fragmented Business Services sector like Facilities Management or Automotive Maintenance.

It’s a relatively young industry, reliant for its existence on the world wide web. (Although I’m sure of my older readers are currently muttering “directory publishing” under their breath.)

Data & Analytics has a tendency to follow the money. Data providers produce datasets that companies want to buy. And the biggest spenders on data are financial services firms.

So it’s no surprise that when we look to answer the second question - what solutions exist for understanding the Data & Analytics market? - we find that growth has been driven by demand from Financial Services. The new interpreters of the sector are not pure analyst research firms like Outsell (acquirers of another mentor, David Worlock’s business Electronic Publishing Services some years ago. Incidentally, if you have enjoyed reading David’s writing over the years then you should read his memoir, Facing Up to Father.) They are so called “Alt Data” specialists, providing Data Sourcing and Data Vendor consulting databases, services and events, for traders, and, specifically, for hedge funds.

Jonathan Chin

has a great Substack on Alternative Data, and I found this piece on the ecosystem of providers of Data Sourcing and Data Vendor Consulting particularly enlightening.

Companies such as Eagle Alpha, Neudata, BattleFin and Crux Informatics provide services to help hedge funds and other traders make data purchasing decisions. They map the market, analyse the providers, then serve that data to their customers, providing consultancy and services around it.

But in their hands it would seem that all Data & Analytics has become Alt Data. A kind of reverse takeover, if you will. An alternative to what, then? When I first heard the term Alt Data, over a decade ago, it was used for very innovative data sources - data sourced by monitoring parking traffic at Walmart to show customer appetite, or by monitoring tanker movements. If all proprietary Data & Analytics is now Alt Data, does that mean that only publicly available data sources (e.g. US non-farm payroll data) are excluded from the term?

I’m intrigued by the concept of having a complete dataset of the Data & Analytics sector, and what is possible once you have it. I may have to build one for fun just to find out what happens next!

That’s it for now. Answering questions 3 and 4 will have to wait for another time or the length of this post will get out of hand.

But net net - having said last time that I would probably range across a wide range of topics, I now think I will mainly find myself posting on Data & Analytics.

It’s funny what you decide when you have nothing else to do. I recommend it.

P.S. If you found this post interesting, or you know someone who you think might, please do me a favour and forward it on to them.

This post was edited on 26th January to reflect the fact that

Jonathan Chin

was the author of The Quagmire of Backtesting Alternative Data, not

Jason DeRise

. Thank you to Jason for pointing this out, and apologies to Jonathan. Thank you both for your great Substacks.

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I’ve not read much since my last post (no access to reading material at the retreat) but I have found the following interesting since I emerged blinking into the sunlight like the mole in The Wind in the Willows:

• Investigative podcast series by the FT into the Vipassana organisation: Link