Thinknum, value investing and alpha generation via XBRL and Open graph.

By Efi Pylarinou

Thinknum is a US based Fintech company that uses XBRL technology to add value to financial analysis. Bloomberg, the dominant brand name that has been the big provider of financial data and financial analysis tools for two decades. Thinknum is not competing with the giant but complementing some of the Bloomberg services.

Thinknum uses XBRL technology, the one behind digital currencies, and Open Graph technology, the one used heavily by Facebook to enable any web page to become a “usable” object; to assist financial analysts in their quest for alpha generation.

Beta generation is based on publicly available market data for the company, macro data for the relevant economy, and broader fundamental data for the business and sector. Analysts may use a bottom up, or a top down approach to their valuation process and possibly combine some technical analysis. Thinknum, suggests to overlay on top of this procedure:

a Bottom-Up analysis based on alternative data that Thinknum compiles

The alternative data that Thinknum extracts, is publicly available non-financial data and users can download to into spreadsheets or as data feeds for their models. Users can also examine the non-financial data provided with powerful visual tools. For example, for national chain stores like Home Depot, Thinkum provides actual and visual store locations combined with macro data of each relevant state in a table format and a map format; for pharmaceutical companies like Merck, users can obtain drug pipeline data in usable format and in visual format that helps estimates and probabilities of failure; for online enternainment companies like King, Thinknum provides dynamic data of daily active users in a table format based on various filters (by game, by location, by age) or a map format; for oil production companies like Apache, Thinknum extracts oil production data by well in table and map format.

All non-financial data are cloud based, they leverage the technologies mentioned above and the connectedness of the web. They provide much richer granular metrics for financial analysis. They are great for value investing. Regular financial data are available for free to Thinknum users and access to the proprietary alternative data is available with a monthly subscription fee. Most subscription users are institutional from Wall Street and hedge funds, looking to improve their investment decision making and generate for their clients “alpha”.

Thinkum completed last year their first round of funding of $1million. It targets professional financial analysts and offers them extra tools (additional relevant public data) to improve their financial models – estimates.

Value investing and alpha generation via XBRL and Open graph.

Thinknum currently, monetizes from individual professional financial analysts via monthly subscriptions. How large is this community? Will they also be able eventually to leverage the larger community of free subscribers that tap into the public financial data and reports that they also offer? Will they have to partner with some YahooFinance to gain scale or collaborate with some other Fintech in the adjacent space of aggregating financial research?

Daily Fintech Advisers (the commercial arm of this open source research site) can help implement strategies related to the topics written about here. Contact us to start a conversation.

One comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.