CB Insights Acquisition
CB Insights, a data and analytics platform that provides market intelligence on private companies and investor activities, has acquired the VentureSource dataset from Dow Jones, a global business news provider.
The VentureSource database tracks comprehensive information on venture-backed private companies, providing data on valuations, investors, executives, and service providers involved in deals, including law firms and investment banks. VentureSource has curated most of its data through proprietary research and by utilizing Factiva – Dow Jones’ research management and global news platform. With the acquisition, CB Insights will enhance its market intelligence by:
100,000+ private company valuations
500,000+ business leaders
7,000+ service providers
"Having the deepest and most complete data on emerging technology companies and technology markets is what our clients rely on CB Insights for, and the acquisition of the VentureSource database from Dow Jones furthers that mission," said Anand Sanwal, CEO and co-founder of CB Insights. "Whether our clients are looking for technology vendors, partners, M&A targets and/or investments, they are now better equipped to discover and understand these companies and tech markets with the Dow Jones data we've acquired as a result of this transaction."
CB Insights has also entered into a licensing arrangement with Dow Jones, in which CB Insights will provide a limited set of research reports and company data to Factiva.
CB Insights has previously raised $1.15 million in grants from the National Science Foundation and later raised $10 million in an equity round in 2015 from RSTP. The company is “revenue-driven” and profitable, according to CEO and co-founder Anand Sanwal. The VentureSource data assets acquisition confirms the financial strength of the company, and marks a larger push in providing comprehensive data on venture deals and the people involved.
A Deeper Dive
So where does CB Insights data come from? The research team shared some insights on their process:
The Cruncher
More than half of CB Insight’s data comes from its Natural Language Processing and Machine Learning software that parses unstructured and semi-structured data sources and programmatically extracts key pieces of structured data. The core of this data is extracted from crawlers that analyze 150,000+ sources on a daily basis. The list of sites CB Insights indexes includes, but is not limited to, the following mostly unstructured data sources:
Regulatory filings – form Ds as an example
Investor websites (press & portfolio pages)
Company websites (press pages & blogs)
Acquirer websites (press pages or investor relations sections)
Press releases
Social media (Twitter primarily)
A select group of local, national and international news and trade publications
The Cruncher provides a unified platform and ultimately an interface for CB Insights analysts to curate the data to ensure it’s correct before customers see it. The process that underlies “The Cruncher” can be seen below.
The Editor
The rest of CB Insights data comes from direct submission from investors, including venture capital firms, angel investors, family offices, and private equity firms. Interestingly, the proportion of direct submitted data from investors has increased over time as it stood at around 10% in 2013 and 30% in 2014. By 2017, the ratio had grown to 40%.
There are several reasons investors might be inclined to share more information with CB Insights, but a prominent reason we see is exposure. Information is key in investing, and the lack of transparency in private markets has affected many M&A deals over the years. By sharing data YoY, investors reduce the likelihood of a potential deal falling through due to insufficient data.
Bigger Picture
The private markets data and intelligence space has grown significantly over the past decade. This could be a result of the increasing capital flow into private markets, or it could be the driver. Either way, data & intelligence is a crucial aspect of private capital deals and will play an even more prominent role in the future. There are many outstanding companies competing in this space, but simply listing “data” companies isn’t enough. There are many vendors that differentiate themselves and add value in different ways. Here’s a more granular approach to “data” that we employ at PE Stack. For simplicity, we have only included “Features” here, but you can find out more detailed information on our website, including sample clients split by size and type, use cases, functions, demo videos and much more.
Another interesting development in this space is “Virtual Analysts”. As access to data increases, the ability to effectively comb through it all gains more importance. udu is an interesting company that supplements the data analysis process. The Virtual Analyst tackles tedious and repetitive tasks, such as combing through thousands of data sources looking for companies and deals. The results are scored based on the client's interest, learning through iterations and feedback. The result is a shortlist of the best matches to the client's criteria in a fraction of the time it would take manually, with a level of completeness not possible by humans.
Final Words
Choosing the right software and data vendors within the Private Equity and Venture Capital ecosystem is no longer “nice-to-have”. It is a necessity. The opaqueness of the industry that allowed underperforming fund managers to raise subsequent funds is disappearing. Especially with the Coronavirus limiting in-person meetings and the recent public market volatility, the LPs biggest driver in GP selection is shifting from “good story-telling” and “soft introductions” towards professionalism and following best practices. To keep good relations with asset allocators, and to ensure the growth of private capital flow, fund managers need to revamp their tech stack.
PE Stack provides free guidance to LPs and GPs in software and data vendor selection, both through its expansive database of all specialized vendors in the space, and through proprietary feedback from existing customers. Check out our Vendor Profiles page or simply reach out to us on info@pestack.com !
[Update- September 2020]
Following its July 2020 acquisition of the assets of Dow Jones VentureSource, CB Insights continued its M&A push with the acquisition of Blockdata, a Netherlands-based software company that tracks the global blockchain economy. Blockdata provides data and predictive insights on the growing but increasingly complex blockchain and distributed ledger technology ecosystem. Their technology enables financial institutions, governments and enterprises to identify the most credible use cases of blockchain and pinpoint the best companies and projects to work with. Ultimately, this enables clients to drastically reduce the uncertainty, time and effort to go from technology discovery to decision. As a result of the acquisition, CB Insights will also be opening an office in Amsterdam. Blockdata will remain a stand-alone product with its own team and will be available on its own as well as available to CB Insights clients.