How Thinknum helps banks make sense of the internet

How Thinknum helps banks make sense of the internet

New York startup Thinknum has carved out a profitable niche by taming the internet data boom for banks and hedge funds. We spoke to co-founder Justin Zhen about how Thinknum’s custom technology generates unique insights.

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There’s a world of information available about companies on the internet – but how to make sense of it all? There’s a lot of publicly available data: financial performance, hirings and firings, marketing efforts, Facebook check-ins, app downloads, store openings, price drops – it goes on and on, and it soon becomes too much to keep track of.

This problem has created a business opportunity for New York fintech startup Thinknum: “We deliver web data [analytics] to professional investors,” says Justin Zhen, co-founder of Thinknum. “All companies are moving online – they’re selling products online, they’re hiring people online, they’re marketing online, so there’s a ton of new data. This data is public, but it’s largely unusable. … We’ve built a technology that grabs all this information, and we organise it and present it in such a way that even the layman can generate unique insights.”

Thinknum currently has around 500 clients, mostly hedge funds but increasingly also banks. Speaking on the phone from New York, Zhen shares his computer screen with me to illustrate how a financial group like Goldman Sachs might use the data. For example, they can analyse store overlaps to determine how fast one chain is growing against another. The Thinknum dataset includes the address of every outlet, which a customer can use to map how many are within a mile of a competitor. “[The addresses] are publicly available on the company website, so you yourself can go and jot one or two down – but you can’t do that with 27,000 stores. We have datasets that go into millions,” says Zhen.

Thinknum also tracks things like stock discounting; by indexing websites daily, users can get alerts when discounting at a brand reaches a certain level, as this could indicate a problem. The Thinknum data can also be useful for working out why a stock is rising or falling, especially if there is no formal newsflow, as Thinknum also tracks a number of informal data sources. “We track things like reviews, and we can see how many people are downloading [a company’s app] and what they think about it. … For example I can tell you know many people have ‘liked’ Tesco on Facebook, and how many people talk about the company there.”

Leapfrogging with custom tech

Zhen has a hedge fund background, and his co-founder Gregory Ugwi used to work for Goldman Sachs. The pair set up Thinknum in 2014, and have been working on the current product for about two years. “We were inspired by Bloomberg and Google. We thought, if we can grab all this data and make it usable, that would make a really interesting company. There’s no one else doing this.” Also, adds Zhen: “Traditional financial data players don’t work well with the internet. The technology we use is pretty new, which is why we’ve been able to systematically index so many companies at once.”

Thinknum has built its own custom technology to crawl the internet to collect the data: “The hard part is mapping and organising everything,” says Zhen, explaining how they’ve been teaching the software to get better at recognising things over time. “That’s why no one else has really moved into this space, but also why we’ve been able to grow so quickly – there’s no alternative.”

Thinknum initially raised $1m just after starting out in 2014, but the company hasn’t raised any money since for the past six months they have been operating at a profit. The New York outfit currently employs 20 people. “Right now we’re working on expanding coverage,” says Zhen – he expects they will go from the current 400,000 companies to “a couple of million” over the next few months. There’s a focus on covering both public and private companies, and to be increasingly international: “We’re adding more companies from places like China, France and Germany now. … As we add new coverage we can also sell to private equity funds and investment bankers, and to corporations who may want to track competitors. There’s many new use cases we can go after by just working on the product.”   

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