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Data Analysis Startup Thinknum Raises $1M in Seed Round

The financial analysis platform is planning to launch a private platform for hedge funds seeking to keep their models private.

Thinknum, a web-based financial analysis platform targeting hedge funds as customers, announced today it has raised $1 million in seed funding from a group of investors.

Leading the seed funding round is Pejman Mar Ventures, a firm founded by the famed angel investor Pejman Nozad, who was the first investor in Dropbox. Other investors include:

  • Signature, headed by Bobby Yazdani, the founder of Saba Software, who has invested in other startups
  • Green Visor Capital, an early-stage venture firm focused on financial technology and founded by Joe Saunders, a former CEO/chairman at Visa, and Simon Yoo, head of Citi's FIG for Asia Pacific
  • 645 Angels, an early-stage investment fund focused on Internet and software companies
  • 500 Startups, founded by the prominent angel investor Dave McClure.

Thinknum's co-founders recently completed 500 Startups' four-month accelerator program in Mountain View, Calif., that offers hands-on advice and support. The program brings in a wide variety of experts focused on marketing, culture, startup accounting, product design, mobile, user testing, sales, and other topics.

"We understand finance and technology, but we didn't know as well how to market, how to hire engineers, and other important things to growing a startup," said Justin Zhen, who launched Thinknum with fellow Princeton University alum Gregory Ugwi last summer in their Manhattan apartment. (I covered Thinknum's history and strategy more thoroughly in February.)

On Tuesday, Zhen and Ugwi will participate in 500 Startups' demo day, an event where startups get to pitch themselves in front of a room full of investors (500 Startups invests $100,000 in each participating company). Both co-founders are returning to New York this week and plan to open a New York office in August. They don't have the office space picked out yet. "We've been focusing on closing the funding and presenting on demo data, and the next steps are to find engineers and find an office," Zhen said.

Since its inception, Thinknum has been on a mission to digitize the world's data. So far, it has connected to 2,000 data sources. It also provides a cashflow engine that lets users test their models to value stocks.

Looking to disrupt the status quo around financial analysis of corporate data, Thinknum has built an open-source platform that lets Wall Street analysts discover and share their models with other analysts.

Though Thinknum is free to those who share their models on the platform, it is also releasing a paid, private workstation for hedge funds and other finance professionals to allow institutions to keep their models private. This strategy will also enable Thinknum to monetize the platform.

"It costs $200 million per user per month. It's an order of magnitude cheaper than other analytics solutions out there," Zhen said. The firm has signed up a "good number of hedge funds" in Silicon Valley and was pleasantly surprised. When the co-founders get back to New York, they plan to sign up hedge funds and investment banks they've spoken to in the past.

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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ugwigr
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ugwigr,
User Rank: Apprentice
8/4/2014 | 8:58:31 PM
Re: sharing? in financial services?
co-founder @thinknum here. Most Hedge Funds and Banks are signing up for institutional accounts and keeping their models private. We are seeing interest from banks who want to share models with specific clients - remember banks' research departments create reports strictly for clients and not for internal traders. All in all Thinknum is a tool to create better models - whether the user chooses to keep them public or private depends on the use case. Feel free to reach out if you have any questions. 
IvySchmerken
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IvySchmerken,
User Rank: Author
8/4/2014 | 10:40:03 AM
Re: sharing? in financial services?
I agree the trend on Wall Street has been to keep models private since they are the secret sauce. I can see college or graduate students in MBA or Masters in Financial Engineering (MFE) Programs who are learning to be a financial analyst want to share their models and learn from others. Someone who is changing careers to become an analyst may want to share to learn from toher. In terms of analysts actually employed by a brokerage firm or hedge fund, they might want to look at someoone else's models, but that would not be allowed on Thinknum without sharing their own.

So the firm has created a private workstation that allows analysts to keep their models private and perhaps share them with others internally. This is the paid model. This model has worked for firms like Estimize which charges hedge funds to receive their crowdsourced earnings estimates feed via an API.

 
Greg MacSweeney
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Greg MacSweeney,
User Rank: Author
8/4/2014 | 8:25:34 AM
sharing? in financial services?
Financial firms have never played well together. And they rarely share. I wonder how this type of service will do in the FS space. It makes sense, don't get me wrong, but financial firms are very proprietary about everything.
IvySchmerken
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IvySchmerken,
User Rank: Author
8/1/2014 | 9:44:44 AM
Re: Sharing is caring
Do you mean privacy issues around users publishing their own models?

Hmmm. If they publish their models, they need to show the formulas. Not sure about the code or attempting to download someone else's code I will delve into this aspect. You raise an important point.

We've seen a few cases on  Wall Street of programmers downloading their own firm's code and landing in jail on trial for intellectual property theft and espionage. In the sharing model economy, are publishers  running the risk of code theft?

 

 
Byurcan
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Byurcan,
User Rank: Author
8/1/2014 | 9:29:02 AM
Re: Sharing is caring
Yes I imagime Thinknum has to be very explicit around privacy issues with its clients.
Becca L
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Becca L,
User Rank: Author
7/31/2014 | 4:40:03 PM
Re: Sharing is caring
Understood. Unfortunately users don't always know when they're crossing the line - this is a bit of a compliance gray area. That being said, I'm sure Thinknum is helping their users stay in line with their respective company policies, and these private workstations sound very useful. 
IvySchmerken
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IvySchmerken,
User Rank: Author
7/31/2014 | 4:34:42 PM
Re: Sharing is caring
Collaboration is a theme of the Thinknum platform. Analysts may want to share the models with peers. The models are created by the financial analysts. So it's their repsonsibility to know if they can post a model or not. The data is publicly available and has been collected by Thinknum.Those who work at Wall Street firms may not want to share their models. Thinknum is offering a private workstation for those that want to keep their models private for which they need to pay $200 a month.
Becca L
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Becca L,
User Rank: Author
7/31/2014 | 12:11:07 PM
Sharing is caring
Great company idea, I think it could streamline a lot of work, and help companies build off each others expertise. I do wonder about the risk of accidentally leaking proprietary information? 

"Looking to disrupt the status quo around financial analysis of corporate data, Thinknum has built an open-source platform that lets Wall Street analysts discover and share their models with other analysts."
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