If you are an early stage investor (Venture Capitalist, Angel investor or other Seed fund), there are now a host of databases which claim to have the information required to scout, identify and track startups. There are 2 open data sources – Crunchbase and AngelList and 5 known new age companies – Datafox, CB Insights, Mattermark, Tracxn and Owler.
Crunchbase and AngelList have proprietary data (which they have open sourced) that’s entered by the startup founders and “followers” of the company.
The rest of the systems have either used public API’s or crawling to build their database of startups from sources such as Crunchbase, AngelList and LinkedIn etc.
All of these systems have almost identical pricing ($399) for a single seat per month. Owler claims to have a free tier and CBInsights has priced themselves even more than these solutions.
All except Datafox have given me some form of limited access to their data for evaluation purposes.
All these solutions are looking to replace the expensive Venture Intelligence reports or Reuters data or other private databases from yesteryear’s or become the “Bloomberg” terminal for private companies similar to what’s being used by traders and investors for publicly listed companies.
The mega trend that’s important for the story: The benchmark for a good stock to buy was a “ten bagger”. A company that if you invested $1 would return $10 in relatively short period of time (2-5 years) as initially quoted by Peter Lynch.
What’s happening in the private markets is that due to the onerous regulations, Sarbanes Oxley law and other paperwork associated with being public, tech companies are staying private longer. So they are becoming multi-ten baggers before they go public. Companies like Facebook, Twitter, Uber and AirBnB, may do well as a public company, will no longer be a 10 bagger post IPO (or highly unlikely) but are obtaining large valuations from seed rounds to Series D or E.
So, many investors are looking to invest earlier into these companies. Data from companies listed above will be very useful for these investors, to make decisions on investing.
All these systems have a fairly similar UI and have almost identical data. For the 3 sectors I wanted to track – Internet of Things, Consumer Internet companies and B2B Enterprise software companies. I am sure you will have better value for the arcane categories. There is not much of a difference in their data since they all seem to obtain data from the same sources. Except Tracxn, I dont think the others use manually curation to track or manage their database.
There are 3 top things I looked for when evaluating these systems:
- Comprehensive nature of their data: Most are fairly similar and you may get a 10% variation in companies from one system versus another.
- Capability to export and do analysis manually: There’s not much of a difference here as well.
- Their analysis, reporting and intelligence platform:All of them are in version 1 of their analysis modules, so right now there is a tremendous lack of sophistication on their data analysis.
Most peers in other companies and a few Venture firms I know, use more than 1 system and pull that data into their own CRM system.
I wont be able to really recommend one system over the other. They all do the job for a beta / version 1 system pretty well and right now, Datafox has a good visualization engine as does CB Insights. CB Insights has the most robust system, but in all 3 cases had the least # of companies of the other 4. Tracxn claims to have analysts that are curating their data, but I dont see the impact of that on their database.