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Vista Equity Partners is folding alt-data shop 7Park into another one of its portfolio companies just 2 years after buying it for $100 million

Published by Business Insider on Thu, 14 Jan 2021


<p><img src="https://static1.businessinsider.com/image/5fa04db669331a0011bc6c41-1200/hedge funds and alt data 4x3.png" border="0" alt="hedge funds and alt data 4x3" data-mce-source="Samantha Lee/Business Insider"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>7Park Data, a darling of the alternative-data boom feeding quantitative hedge funds, is shuttering as a standalone business just two years after being <a href="https://www.businessinsider.com/7parks-changes-since-vista-purchase-sales-quotas-c-suite-reorg-2020-1">acquired for $100 million</a> by private-equity juggernaut Vista Equity Partners.</p><p>Sources told Insider that Bellevue, Washington-based Apptio, another Vista portfolio company, will absorb 100% of 7Park's business.&nbsp;</p><p>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.&nbsp;</p><p>A spokesperson for Vista declined to comment. The terms of the deal were not disclosed.&nbsp;</p><p>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.</p><p>Annual revenue has fallen by more than 50% since Vista purchased the company, according to sources familiar with the company.&nbsp;</p><p><strong>See more:</strong> <em><a href="https://www.businessinsider.com/7parks-changes-since-vista-purchase-sales-quotas-c-suite-reorg-2020-1">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.</a></em></p><p>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, <a href="https://www.businessinsider.com/vista-equity-partners-tension-robert-smith-brian-sheth-exit-taxes-2020-10">has also been rocked</a> by billionaire co-founder Robert Smith's admission to years-long tax evasion and the exit of Brian Sheth, Vista's No. 2.</p><p>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.&nbsp;</p><p>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.</p><p>7Park had ambitions of growing that revenue stream to more than $200 million, according to the presentation.&nbsp;</p><p>In 2018, a breakout year for alternative-data providers, <a href="https://www.businessinsider.com/7parks-changes-since-vista-purchase-sales-quotas-c-suite-reorg-2020-1">Vista bought the company for $100 million</a>, adding a data up-and-comer to its portfolio of technology investments.&nbsp;&nbsp;</p><p><strong>See more: </strong><em><a href="https://www.businessinsider.com/outlook-for-alt-data-pricing-industry-consolidation-corporate-use-2020-1">The alt-data industry is having growing pains after its sudden glow upand insiders are looking at new pricing models and unlikely customers</a></em></p><p>But 7Park has encountered an array of obstacles since, including a slew of staff exits and leadership changes in 2019, Insider <a href="https://www.businessinsider.com/7parks-changes-since-vista-purchase-sales-quotas-c-suite-reorg-2020-1">previously reported</a>.</p><p>More importantly, the company had lost access to data streams throughout 2020.</p><p>Jumpshot, a data stream collected and sold by cybersecurity firm Avast before being <a href="https://press.avast.com/en-gb/avast-to-commence-wind-down-of-subsidiary-jumpshot">shut down in January 2020</a> following concerns over data privacy, was one such example. Jumpshot's data was a part of 10-15% of 7Park's offerings at the time, a source familiar with the situation had told Business Insider. While some 7Park's products that included Jumpshot data were salvageable, other were not, the source added.</p><p>7Park had previously faced issues around data streams going dark, a somewhat common peril of <a href="https://www.businessinsider.com/yodlee-jumpshot-alt-data-regulations-hedge-funds-2020-2">operating in the world of alternative data</a>.</p><p>In 2015, two of 7Park's critical data vendors were acquired nearly simultaneously, the source familiar with the situation had previously told Business Insider. One of the acquiring companies wasn't interested in working with 7Park, while the other was a competitor. As a result, the company was forced to quickly switch to new offerings essentially overnight in order to salvage the business, the source said.&nbsp;</p><section><p><strong>Read more:</strong> <em><a href="https://www.businessinsider.com/yodlee-jumpshot-alt-data-regulations-hedge-funds-2020-2">Alt data's Wild West days may be ending as Congress and privacy advocates zero in on the industry. Nearly a dozen insiders tell us how data streams going dark is an 'unhedgeable' risk.</a></em></p></section><p>One former employee, who spoke under the condition of anonymity in order to speak freely, said the company was left scrambling in early 2019 when Google <a href="https://www.washingtonpost.com/technology/2018/10/15/small-privacy-change-google-leads-big-disruptions-startups/">changed its policy to limit email receipt data</a>.&nbsp;</p><p>The company's feed on email receipts, at the time, was one of its most accurate and a best seller, the source said.&nbsp;</p><p>To be sure, 7Park's view of the market, and its place in it, changed following the Vista acquisition, the source familiar with the situation had previously told Insider. A key consideration of the company following the deal was the value it could provide Vista's other portfolio companies when it came to their own internal data, whether that be selling it or for other purposes, the source said.</p><p>But its eight-year run as a standalone firm has come to an end, and it will now be folded into Apptio, a software provider that <a href="https://www.reuters.com/article/us-apptio-m-a-vista-equity-partners/apptio-to-go-private-in-1-94-billion-with-vista-equity-partners-idUSKCN1NH05W">Vista purchased for nearly $2 billion in 2018</a>.&nbsp;</p><p><strong>SEE ALSO:&nbsp;<a href="https://www.businessinsider.com/alt-data-pitch-their-firm-point72-bridgewater-barclays-2020-8" >7 alt-data leaders at big-name investors like Point72, Bridgewater, and Man Group explain the best way to pitch them on new feeds</a></strong></p><p><strong>SEE ALSO:&nbsp;<a href="https://www.businessinsider.com/vista-equity-partners-robert-smith-brian-sheth-austin-nate-paul-2020-11" >Vista Equity Partners CEO Robert Smith is looking to move beyond his $140 million tax-evasion settlement. An escalating political scandal involving a one-time protg could complicate things.</a></strong></p><p><strong>SEE ALSO:&nbsp;<a href="https://www.businessinsider.com/vista-equity-pension-nmerb-credit-investment-robert-smith-tax-evasion-2020-11" >Vista Equity Partners lost a $100 million pension-fund investment after Robert Smith's tax-evasion investigation came to light</a></strong></p><p><a href="https://www.businessinsider.com/vista-equity-owned-alt-data-7park-being-absorbed-apptio-deal-2021-1#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/red-wine-good-heart-health-benefits-healthy-cardiologist-2019-4">A cardiologist revealed the truth behind red wine's health benefits</a></p>
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