Businesses spent $187B on big data and analytics in 2019. The amount of data subject to data analysis will grow to 5.2 zettabytes (1 zettabyte = 1 trillion gigabytes) by 2025. Data-driven businesses are expected to take $1.8T annually from organizations that are less reliant on data. Organizations need to integrate data into their operations to remain competitive and drive intelligent decision-making. But how do you figure out what second and third-party data to use? Nomad Data, a search engine for data sets, makes answering this very query a seamless process through automation. Prior to Nomad Data, seeking out data providers to fulfill your data requirements was inefficient and extremely time-consuming with the possibility that there may be questions about the data’s quality.
AlleyWatch caught up with CEO and Founder Brad Schneider to learn more about how Nomad flips the data market to the end-user from the data provider, the company’s strategic plans, recent round of funding, and much, much more.
Who were your investors and how much did you raise?
We raised a $1.6M seed round. The round was led by Bloomberg Beta. Also supporting us in the round were Alumni Ventures, Great Oaks Ventures, Correlation Ventures, DataFrame Ventures, and a number of data-industry expert angel investors.
Tell us about the product or service that Nomad Data offers.
You can think about Nomad Data as a search engine for finding commercial datasets to solve particular business use cases. Users simply explain the question they’re trying to answer: “I need to see the volume of credit cards issued by each bank in Brazil monthly going back 5 years.” and Nomad Data helps connect them to data vendors who can supply the data to address the use case. The goal of the product is to allow any business decision-maker access to the wealth of commercial datasets without requiring them to be a data scientist or an expert at sourcing data.
What inspired the start of Nomad Data?
Before starting Nomad Data, I had started a data analytics business and we kept seeing people run into the same problem over and over again. People knew the business questions they needed answers to, but they had no idea if or how these questions could be aided by commercial data. The cutting edge in data marketplaces today is no more than a glorified yellow pages. The issue with data is that it doesn’t fit into this paradigm. It’s very hard to condense a complex dataset to a tagline and a paragraph description and expect anyone to know the wealth of things it can be used to solve.
We also saw that the data market sales process was backwards. Data companies run around marketing their data to clients. They then try to find a problem that their data might solve and hope the customer is having that problem at the moment and that they’re speaking to the right person at the client. In our model, a client defines the use case first and then goes in search of data to support it. When the buyer and seller come together, they both know the goal and we’re seeing most early clients go from a question to buying a data product very quickly.
How is Nomad Data different?
Nomad Data makes the data market much simpler for a would-be buyer. In a few minutes, they explain their business use case. Our algorithms then match the use case to a number of data vendors who log in and confirm whether their data can help as well as how it can help. If you’re satisfied with their response and want to connect, you click a button and you’re in direct contact with the vendor. Either party can keep their identity hidden for as long as they want.
What market does Nomad Data target and how big is it?
The market size for market research services is over $80B USD. We think commercial data has the potential to supercharge this market but right now it is inaccessible to people who aren’t data gurus. We will help simplify access to this market.
What’s your business model?
We charge data buyers a small monthly fee. Users can sign up on their own with a credit card and we have no long-term commitments.
How has COVID-19 impacted your business?
COVID was a key factor that led me to start this business. After selling my last business I planned to take a long time off and then potentially go back into finance after a several year break to be an entrepreneur. When COVID hit, travel came to a halt and everyone stopped hiring. There wasn’t much else for me to do in quarantine other than pondering what my next move would be. It also became clear that the amount of uncertainty COVID had introduced into market research was unparalleled and data was going to be more important than ever in understanding the new normal which would likely be with us for years.
For a few months, I researched different ways to open the data market to more people. Eventually, I came to our current model which seemed the most likely to succeed.
What was the funding process like?
Initially, I reached out to VCs that I knew. I was surprised by how quickly they were able to see what I saw in terms of market opportunity. Before I went too far down the path of raising money I wanted to speak to more customer types to make sure the market opportunity was as large as I thought it was. As I spoke to customers in more and more industries, I could quickly see that the problem as we saw it was extremely similar across industries and was a pain point for all of them. We then secured a term sheet from our lead investor. Unfortunately, that same day I first started feeling sick with what turned out to be Covid. That slowed me down a lot but once I regained my strength, I started to reach out to potential follow-on investors. The biggest difference I noticed from my previous fundraises was how convenient video conferencing made the process. I used to have to take cabs all over NYC and planes all over the country to meet with investors. This time I merely sat at my home office desk and was meeting with 5 or more investors in a single day from around the world.
What are the biggest challenges that you faced while raising capital?
One of the biggest challenges I faced was the lack of public companies and large acquisitions in the commercial data market. The ones that were public were in very low growth sectors of data and investors worried about the valuation multiples they could expect to receive on a successful exit. Even though we are more of a marketplace model than a data provider we were still being viewed through that lens. Since our raise, we have seen much higher growth data businesses start receiving valuation multiples similar to high growth software and internet companies, which should be a tailwind for our future raises.
What factors about your business led your investors to write the check?
Our investors shared the view that in the future, all business decisions will be backed by data and that when we become the onramp to this resource, an enormous amount of value will accrue to the company. My background also gave investors confidence. I’ve been a technology investor, data buyer, and analytics vendor in my previous professional roles and am a second-time founder.
Our investors shared the view that in the future, all business decisions will be backed by data and that when we become the onramp to this resource, an enormous amount of value will accrue to the company. My background also gave investors confidence. I’ve been a technology investor, data buyer, and analytics vendor in my previous professional roles and am a second-time founder.
What are the milestones you plan to achieve in the next six months?
Our first key milestone, which we’ve mostly reached, was to build the platform in a way that new users can discover, sign up for and use the service without ever having to meet with anyone at the company. Now that we have that automation in place, our focus is on delivering an amazing experience for clients and on growing our data buyer base substantially.
We’ve been fortunate to already attract corporations interested in selling their data. Because our platform allows buyers and sellers to interact anonymously, corporations feel much more comfortable. Many corporations prefer not to be listed as being data sellers. They want to be very selective with whom that fact is shared. With Nomad Data they are in full control. Along those lines, our six-month goal is to attract several additional large corporations with unique data assets.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
If you’re looking for capital, it’s a great time to fundraise. With interest rates so low, more and more money is looking for a place to generate a return. Getting meetings with investors has been surprisingly easy. Also, don’t be deterred by people who don’t agree with your vision. That in and of itself isn’t necessarily a signal that you aren’t right. Being an entrepreneur usually means being early. Once everyone sees the opportunity the market becomes much more challenging.
Where do you see the company going now over the near term?
We see ourselves doing for the data market what people like Google did for the web and Youtube did for video. By providing a single, simple onramp we will help the market reach its full potential. We think the commercial data market will be one of the largest, most liquid markets in technology in the future and we plan to be the backbone.
