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A STARTUP THAT SCRAPES THE WEB FOR BANKS AND HEDGE FUNDS JUST RAISED MONEY FROM
VISA'S FORMER CEO IN A SIGN OF THE GROWING IMPORTANCE OF THE $2 BILLION INDUSTRY

Dakin Campbell
2019-03-20T13:40:00Z
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Thinknum founders Justin Zhen and Gregory Ugwi Thinknum

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 * Alternative data startup Thinknum raised $12 million in a series A round from
   investors including Green Visor Capital, which counts ex-Visa CEO Joe
   Saunders as a partner.
 * Thinknum scrapes websites, or extracts information using an automated
   software program, and then puts the data into easy-to-use formats for
   investors and analysts.
 * The company is part of a fast growing industry of web scraping that will see
   investors spend $1.8 billion by 2020. 

Alternative data has started to pay. 

That's one conclusion to take from today's news that alternative data startup
Thinknum had raised $11.6 million in a series A round from investors including
Green Visor Capital, according to a statement. Joe Saunders, the Visa CEO who
took the network public in 2008, is the fintech VC's general partner. 

Thinknum will use the money to invest in the product, find new clients like
corporations, and hire engineers to its staff of about 20, according to
co-founder Justin Zhen. He declined to comment on valuation of the company he
started with Gregory Ugwi.

"We cover 400,000 companies but we want to cover every company in the world,"
Zhen said. 

Thinknum scrapes websites, or extracts information using an automated software
program, and then puts the data into easy-to-use formats so investors and
analysts can examine what it says about everything from job listings to store
locations to reviews. The service is simple to use and doesn't require a
technology or data science background.

The startup, which raised $1 million in seed money from investors including
Green Visor in 2014, has been profitable since 2016. It's doubled revenue in
each of the last two years and grown its roster of clients into the hundreds.
Eight out of the top 10 investment banks use it.

See also: Hedge funds are watching a key lawsuit involving LinkedIn to see if
they can spend billions on web-scraped data

Thinknum is one company among hundreds in a the growing field of alternative
data, techniques to find, extract and provides insights into a company's health
that aren't readily available from conventional sources like financial reports
and economic indicators. Subsets include web-scraping, satellite imagery, flight
tracking, mobile device geolocation and oil ou put. Spending by asset managers
on alternative datasets is around $3 billion and growing, according to JPMorgan.

Thinknum has gained a following among Wall Street research analysts, which rely
on the company to analyze non-traditional data sources. Bank of America analysts
have used Thinknum to analyze data from corporate rating website glassdoor.com
and found that employee sentiment was highly correlated to a company's future
performance. Jefferies analysts looked at 11,000 job listings in the aerospace
and defense industries and found that 50% of all openings were in the Washington
DC market. 

See also: Hedge funds will spend $2 billion on web-scraping software to gain an
edge, and it's part of an investing gold rush

In September, Citigroup became one of the first Wall Street banks to give
clients access to alternative datasets from its platform when it started giving
clients access to data collected and analyzed by the five-year old startup. 

Thinknum is at the forefront of a growing trend. One out every 20 web page
visits last year was done by a hedge fund or sell-side research institution
scraping websites for information, according to a report by Opimas Analysis.
This comes out to roughly 10.2 billion page visits a day, equal to the daily
users of Google's search function, and it's expected to "grow rapidly."

By 2020, managers' web page visits for the purpose of scraping will eclipse 17
billion and cost more than $1.8 billion — nearly double what it currently costs
— as managers invest in software, talent and outside vendors to clean and store
the loads of data.

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