7Park is being shut down as a standalone business two years after Vista bought it for $100 million, Insider has learned. Samantha Lee/Business Insider
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7Park Data, which Vista Equity Partners bought for $100 million, is shuttering as a standalone alt-data business and being absorbed into the Vista-owned software provider Apptio.
The company has struggled to deal with a new mandate from Vista, the loss of key outside data streams, and client departures, sources told Insider.
In 2017, 7Park had a large client roster including a star-studded list of buy-side firms like Tiger Global, Coatue, and Citadel, according to a pitch deck viewed by Insider.
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7Park Data, a darling of the alternative-data boom feeding quantitative hedge funds, is shuttering as a standalone business just two years after being acquired for $100 million by the private-equity juggernaut Vista Equity Partners.
Sources told Insider the Bellevue, Washington-based Apptio, another Vista portfolio company, would absorb 100% of 7Park’s business.
A spokesperson for 7Park confirmed the deal, citing the strength of its tech. An Apptio spokesperson said in a statement that the company was “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.
A Vista spokesperson declined to comment. The terms of the deal were not disclosed.
The New York-headquartered 7Park has seen challenges in recent months, including client defections, losing access to key data streams, and a precipitous drop in revenues, according to people familiar with the matter who spoke on the condition of anonymity to preserve their relationships. Details regarding how 7Park, and its offerings, will be integrated into Apptio were not immediately clear.
Annual revenue has fallen by more than 50% since Vista purchased the company, according to people familiar with the company.
Read more: 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.
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, has also been rocked by its billionaire cofounder Robert Smith’s admission to yearslong tax evasion and the exit of Brian Sheth, Vista’s No. 2.
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.
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 prospective 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.
It had ambitions of growing that revenue stream to more than $200 million, according to the presentation.
In 2018, a breakout year for alternative-data providers, Vista bought the company for $100 million, adding a data up-and-comer to its portfolio of technology investments.
Read more: The alt-data industry is having growing pains after its sudden glow up — and insiders are looking at new pricing models and unlikely customers
But 7Park has encountered an array of obstacles since, including a slew of staff exits and leadership changes in 2019, Insider previously reported.
More importantly, the company had lost access to data streams throughout 2020.
Jumpshot, a data stream collected and sold by the cybersecurity firm Avast before being shut down in January 2020 following concerns over data privacy, was one such example. Jumpshot’s data was a part of 10 to 15% of 7Park’s offerings at the time, a person familiar with the situation had told Business Insider. While some of 7Park’s products that included Jumpshot data were salvageable, other were not, the person added.
7Park had previously faced issues around data streams going dark, a somewhat common peril of operating in the world of alternative data.
In 2015, two of 7Park’s critical data vendors were acquired nearly simultaneously, the person familiar with the situation 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 to salvage the business, the person said.
Read more: 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.
One former employee, who spoke on the condition of anonymity to speak freely, said the company was left scrambling in early 2019 when Google changed its policy to limit email-receipt data.
The company’s feed on email receipts at the time was one of its most accurate and a best seller, the person said.
To be sure, 7Park’s view of the market, and its place in it, changed after the Vista acquisition, the person familiar with the situation previously told Insider. A key consideration of the company after the deal was the value it could provide Vista’s other portfolio companies when it came to their internal data, whether that be selling it or using it for other purposes, the person said.
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 Vista purchased for nearly $2 billion in 2018.
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