Alternative Data Market Size
| Study Period | 2022 - 2029 |
| Base Year For Estimation | 2023 |
| CAGR (2024 - 2029) | 51.28 % |
| Fastest Growing Market | Asia Pacific |
| Largest Market | North America |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Alternative Data Market Analysis
The Alternative Data Market is expected to register a CAGR of 51.28% during the forecast period.
As businesses and financial institutions increasingly turn to non-traditional data sources, the Alternative Data Market is witnessing rapid growth. This market encompasses unconventional data sources, including satellite imagery, social media, credit card transactions, web scraping, and environmental data, all of which provide a richer context for decision-making. Sectors such as finance, retail, and real estate are driving the demand, utilizing this data to gauge consumer behavior, predict market trends, and spot fresh investment opportunities.
- Hedge funds and investment firms are pivotal players in the alternative data market, harnessing it for investment strategies and predictive analyses. With competition heating up, these firms are on the lookout for distinctive data sets to anticipate economic shifts, gauge investor sentiment, and monitor events that sway the market.
- AI and machine learning are revolutionizing data analysis, amplifying the value of alternative data. These technologies excel at sifting through vast, unstructured datasets to extract actionable insights. Moreover, AI-driven predictive analytics can discern correlations in intricate datasets, bestowing firms with a competitive edge.
- Retailers are leveraging alternative data to decode consumer behavior, from spending patterns to seasonal demands. By tapping into social media and transaction insights, they can tailor marketing efforts, streamline supply chains, and swiftly adapt to evolving consumer tastes.
- For industries like e-commerce, logistics, and real estate, timely data is paramount. Responding to this need, alternative data providers are prioritizing rapid data delivery, often via APIs, ensuring businesses have access to real-time insights essential for swift, high-stakes decisions.
- However, the alternative data market grapples with regulatory hurdles, especially with the heightened focus on data privacy and security. Regulations like Europe's GDPR introduce complexities in data collection and processing. To sidestep legal pitfalls, businesses must diligently navigate these compliance challenges, which can inadvertently restrict data access and flexibility in its use.
Alternative Data Market Trends
Increasing Demand from Hedge Funds to drive the market
- Hedge funds are enhancing their predictive models using alternative data, making them more accurate and forward-looking than traditional models. By incorporating transaction data, and sentiment analysis, these funds can more precisely forecast economic indicators, customer behavior, and market trends. This quest for superior predictive models fuels innovation in the alternative data sector, compelling providers to curate unique datasets that offer vital market insights.
- The use of natural language processing (NLP) and sentiment analysis is driving notable market growth. Hedge funds are leveraging alternative data sources, such as news articles, earnings call transcripts, and social media, to assess sentiment related to companies, sectors, and the broader economy. NLP tools enable these funds to analyze large volumes of unstructured data, providing actionable insights into market sentiment, investor confidence, and public perception. With these insights, hedge funds can efficiently adjust their portfolios, ensuring timely responses to sentiment-driven market dynamics.
- The expanding hedge fund market is fueling its own growth. The hedge fund industry experienced a significant boom in the 1990s, with global assets under management (AUM) steadily climbing until 2007. However, in the wake of the financial crisis, AUM saw a sharp decline in 2008, only making a comeback in 2013. As reported by BarclayHedge, hedge funds achieved a milestone in 2023, with AUM surpassing the USD 5 trillion mark.
- Hedge funds constantly pursue new avenues to generate alpha—returns that surpass standard benchmarks. Leveraging alternative data, these funds can identify and act on untapped market signals ahead of their competitors. For example, utilizing credit card transaction data allows hedge funds to track real-time sales for targeted companies and sectors, enabling them to detect revenue trends prior to earnings call announcements. Such a competitive edge drives the ongoing demand for cutting-edge data sources and analytical tools.
- Hedge funds, managing vast amounts of sensitive data, face challenges due to privacy and regulatory concerns. European regulations, such as GDPR, impose restrictions on data collection and usage, mandating strict compliance from both data providers and users. Although these regulations can hinder data accessibility and utilization, they simultaneously open doors for providers of compliant and privacy-centric data solutions. Hedge funds are increasingly investing in these solutions to ensure they remain within legal boundaries.
North America is expected to Hold a Major Share
- North America has consistently led the charge in embracing cutting-edge technologies such as machine learning, artificial intelligence, and big data analytics. These technologies play a pivotal role in managing and interpreting intricate alternative data sources. The U.S., being home to many of the globe's foremost technology firms and research entities, cultivates a vibrant innovation landscape that propels sophisticated data analytics. This technological edge allows North American companies to swiftly and adeptly process vast and varied datasets, amplifying the value and reach of alternative data.
- In North America, a significant concentration of hedge funds and institutional investors leverage alternative data to hone their predictive models and make astute investment choices. These funds extract distinctive insights from sources like consumer transaction data, web traffic, satellite imagery, and social media trends, all aimed at bolstering their investment outcomes. Such heightened demand has catalyzed a proliferation of alternative data providers, specializing in tailored datasets for the financial sector, thereby reinforcing North America's dominant position in the arena.
- For instance, in September 2024, State Street Global Advisors, the asset management division of State Street Corporation, has unveiled the State Street Global Alternative Beta Fund. This new fund aims to mirror the returns of hedge funds, viewed as a comprehensive asset class. By employing a dynamic, factor-based investment strategy, the State Street Global Alternative Beta Fund seeks to capture the beta returns of hedge funds, largely influenced by diverse market exposures, and to emulate the asset class's risk-return profile.
- In May 2024, Bloomberg L.P., a privately held American company specializing in financial services, software, data, and media, has unveiled its proprietary Bloomberg Second Measure (BSM) transaction data analytics feeds via Bloomberg Data License for the first time. This integration allows data professionals and quantitative researchers to effortlessly merge this premium alternative dataset with Bloomberg’s conventional Data License content, offering enhanced analytical depth and timely insights into the performance of consumer companies.
- North America boasts a mature regulatory framework governing data usage, with companies adept at navigating compliance. While European regulations, such as GDPR, pose challenges, North American firms have established sophisticated compliance mechanisms. These allow for the ethical and legal acquisition and utilization of alternative data. Such regulatory maturity not only fosters the growth and adoption of alternative data in the region but also safeguards consumer rights. This balance sustains demand, particularly from sectors like finance that are under stringent regulations.
Alternative Data Industry Overview
The global alternative data market features a competitive landscape where established players coexist with emerging data providers, each specializing in unique datasets. Dominating the market, established companies supply both financial and non-financial data to institutional investors and hedge funds. These firms adeptly gather and analyze data from diverse sources, including social media, geolocation services, consumer transaction patterns, and other online platforms. Leveraging a robust client base and advanced technological infrastructure, they've cemented their leadership in offering alternative data solutions pivotal for financial forecasting and investment decisions.
Meanwhile, newcomers are introducing specialized datasets and niche insights, targeting industries beyond finance, such as retail, automotive, and healthcare. These companies are broadening the horizon by aggregating varied data types, from satellite imagery and environmental data to sentiment analysis, addressing the surging demand across multiple sectors. This competitive environment fuels innovation, urging providers to refine data accuracy, enhance processing speeds, and offer tailored solutions. Yet, the landscape isn't without its challenges. Data privacy regulations and compliance issues shape the competitive dynamics, as firms navigate the tightrope of ensuring data accessibility while adhering to privacy standards, particularly in regions like North America and Europe.
The Report Covers Alternative Data Companies and the Market is Segmented by Data Type (Credit & Debit Card Transactions, Email Receipts, Geo-Location (Foot Traffic) Records, Mobile Application Usage, Harvesting Management, Social & Sentiment Data, Web Scraped Data, Web Traffic, Other Data Types), by End-User Industries (BFSI, Automotive and Machine Parts, Oil & Energy, Industrial, IT & Telecommunications, Retail). The Market Sizes and Forecasts are Provided in Terms of Installed Base (in Thousand Units) for all the Above Segments.
Alternative Data Market Leaders
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Advan Research Corporation
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Dataminr
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Earnest Analytics
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M Science
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Preqin Ltd.
*Disclaimer: Major Players sorted in no particular order
Alternative Data Market News
- May 2024: Datos, a New York-based provider of clickstream data products, has forged an integration partnership with Exabel, a platform specializing in alternative data research and workflow solutions for the financial sector. Exabel's platform empowers users to organize, analyze, visualize, and transform alternative data. This capability aids investment teams in maximizing the utility of the data, seamlessly integrating foundational, first-party, and partner data assets for KPI prediction, mapping, modeling, and fundamental analysis. Datos' clickstream products monitor the browsing behavior of tens of millions of users worldwide, both on desktop and mobile. They offer anonymized insights into consumer behavior, highlighting aspects like purchase intent, keyword trends, and regional site traffic across diverse verticals. Through this new partnership, teams can leverage Datos' insights to pinpoint trends, decode market dynamics, and evaluate company performance.
- October 2024: HES FinTech has forged a strategic alliance with Credolab, aiming to bolster AI-driven credit risk management solutions for its clientele. This partnership not only enriches HES FinTech's technological ecosystem but also taps into Credolab's prowess in alternative data-centric credit scoring, equipping lenders with enhanced insights into assessing creditworthiness.
Alternative Data Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Consumers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Rising E-Commerce Industry
5.1.2 Increasing Demand from Hedge Funds
5.1.3 Growing Digitalization
5.2 Market Restraints
5.2.1 Regulatory and Data Security Concerns
6. MARKET SEGMENTATION
6.1 By Data Type
6.1.1 Credit & Debit Card Transactions
6.1.2 Email Receipts
6.1.3 Geo-location (Foot Traffic) Records
6.1.4 Mobile Application Usage
6.1.5 Harvesting Management
6.1.6 Social & Sentiment Data
6.1.7 Web Scraped Data
6.1.8 Web Traffic
6.1.9 Other Data Types
6.2 By End-User Industries
6.2.1 BFSI
6.2.2 Automotive and Machine Parts
6.2.3 Oil & Energy
6.2.4 Industrial
6.2.5 IT & Telecommunications
6.2.6 Retail
6.3 By Geography
6.3.1 North America
6.3.2 Europe
6.3.3 Asia
6.3.4 Australia and New Zealand
6.3.5 Latin America
6.3.6 Middle East and Africa
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 Advan Research Corporation
7.1.2 Dataminr
7.1.3 Earnest Analytics
7.1.4 M Science
7.1.5 Preqin Ltd.
7.1.6 RavenPack
7.1.7 Thinknum Alternative Data
7.1.8 UBS Evidence Lab
7.1.9 YipitData
7.1.10 1010Data
- *List Not Exhaustive
8. INVESTMENT ANALYSIS
9. FUTURE OUTLOOK OF THE MARKET
Alternative Data Industry Segmentation
Alternative data refers to information sourced from unconventional channels. For investors, this often entails seeking insights beyond standard company filings and broker recommendations to gain a competitive advantage. Instances of alternative data encompass credit card transactions, social media discussions, product evaluations, and satellite imagery.
The Report Covers Alternative Data Companies and the Market is Segmented by Data Type (Credit & Debit Card Transactions, Email Receipts, Geo-Location (Foot Traffic) Records, Mobile Application Usage, Harvesting Management, Social & Sentiment Data, Web Scraped Data, Web Traffic, Other Data Types), by End-User Industries (BFSI, Automotive and Machine Parts, Oil & Energy, Industrial, IT & Telecommunications, Retail). The Market Sizes and Forecasts are Provided in USD for all the Above Segments.
| By Data Type | |
| Credit & Debit Card Transactions | |
| Email Receipts | |
| Geo-location (Foot Traffic) Records | |
| Mobile Application Usage | |
| Harvesting Management | |
| Social & Sentiment Data | |
| Web Scraped Data | |
| Web Traffic | |
| Other Data Types |
| By End-User Industries | |
| BFSI | |
| Automotive and Machine Parts | |
| Oil & Energy | |
| Industrial | |
| IT & Telecommunications | |
| Retail |
| By Geography | |
| North America | |
| Europe | |
| Asia | |
| Australia and New Zealand | |
| Latin America | |
| Middle East and Africa |
Alternative Data Market Research FAQs
What is the current Alternative Data Market size?
The Alternative Data Market is projected to register a CAGR of 51.28% during the forecast period (2024-2029)
Who are the key players in Alternative Data Market?
Advan Research Corporation, Dataminr, Earnest Analytics, M Science and Preqin Ltd. are the major companies operating in the Alternative Data Market.
Which is the fastest growing region in Alternative Data Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Alternative Data Market?
In 2024, the North America accounts for the largest market share in Alternative Data Market.
What years does this Alternative Data Market cover?
The report covers the Alternative Data Market historical market size for years: 2022 and 2023. The report also forecasts the Alternative Data Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Alternative Data Industry Report
Statistics for the 2024 Alternative Data market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Alternative Data analysis includes a market forecast outlook for 2024 to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
