hedge funds and alt data 4x3

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7Park Data, a darling of the alternative-data boom feeding quantitative hedge funds, is shuttering as a standalone business just two years after being acquired for $100 million by private-equity juggernaut Vista Equity Partners.

Sources told Insider that Bellevue, Washington-based Apptio, another Vista portfolio company, will absorb 100% of 7Park’s business. 

A spokesperson for 7Park confirmed the deal, citing the strength of its tech. An Apptio spokesperson said in a statement that the company is “poised to enhance our robust IT Benchmarking solution as well as provide additional machine learning-driven data cleansing and auto classification capabilities” with the purchase. 

A spokesperson for Vista declined to comment. The terms of the deal were not disclosed. 

New York-based 7Park has seen challenges in recent months including client defections, losing access to key data streams, and a precipitous drop in revenues, according to sources familiar with the matter who spoke under the condition of anonymity to preserve relationships. Details regarding how 7Park, and its offerings, will be integrated into Apptio were not immediately clear.

Annual revenue has fallen by more than 50% since Vista purchased the company, according to sources familiar with the company. 

See more: PE shop Vista Equity Partners paid $100 million for 7Park to get in on the alt-data craze. Insiders describe the management turnover, amped up sales pressure, and change in strategy that followed.

The alt-data company’s plummeting fortunes mark a rare miss for Vista. In recent months, the private-equity firm, which has $73 billion in assets under management, has also been rocked by billionaire co-founder Robert Smith’s admission to years-long tax evasion and the exit of Brian Sheth, Vista’s No. 2.

7Park, founded in 2012, rose to prominence amid Wall Street’s embrace and shift toward novel data streams, such as retail foot traffic, credit-card statements, email receipts, and website and app traffic. 

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The company made most of its money selling this data to many of the world’s top hedge funds, which cleaned it up and packaged the intel into algorithms to inform potential investments. The firm in 2017 produced roughly $15 million in revenue and had more than 140 clients, including Balyasny, Citadel, Coatue, Tiger Global, and SoftBank, according to a pitch deck presentation viewed by Insider.

7Park had ambitions of growing that revenue stream to more than $200 million, according to the presentation. 

In 2018, a breakout year for alternative-data providers, Vista bought the company for $100 million, adding a data up-and-comer to its portfolio of technology investments.  

See more: The alt-data industry is having growing pains after its sudden glow up — and insiders are looking at new pricing models and unlikely customers

But 7Park has encountered an array of obstacles since, including a slew of staff exits and leadership changes in 2019, Insider previously reported.

More importantly, the company had lost access to data streams throughout 2020.

Jumpshot, a data stream collected and sold by cybersecurity firm Avast before being shut down in January 2020 following concerns over data privacy, was one such example. Jumpshot’s data was a part of 10-15% of …read more

Source:: Business Insider


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