Neudata Reports Surge in Alternative Data Budgets for 2025

Rise in Alternative Data Budgets Expected in 2025

According to the latest report from Neudata, the landscape of alternative data is evolving rapidly, with significant increases projected in data purchasing budgets for 2025. This insight stems from a comprehensive analysis of current trends in the alternative data market, especially focusing on the integration of artificial intelligence, spending behaviors, and emerging datasets that organizations are banking on in the near future.

Key Trends Shaping 2025's Data Landscape

The findings of Neudata's 2024 alternative data trends report suggest that a whopping 95% of data buyers are planning to sustain or increase their budgets as we move into 2025. The enthusiasm is compounded by the fact that over 70% of data providers experienced a notable uptick in subscriptions throughout 2024, solidifying a positive sentiment within the sector.

Expansion of Data Portfolios

In this financially driven environment, data buyers have been acquiring an average of 20 different datasets each year, resulting in an approximate annual expenditure of $1.6 million on data alone. Interestingly, there's a noticeable discrepancy where large firms are subscribing to about 43 datasets on average, while smaller entities typically only utilize around eight datasets. This stark contrast highlights the ongoing trend of data expansion among major players in the industry.

Challenges with Pricing

Despite the optimistic data trends, there exists a challenge regarding pricing. About 62% of buyers identified high costs as the primary issue for adopting new data. However, once they invest, buyers showed remarkable loyalty, with over 90% retaining their subscriptions, indicating that the perceived value of alternative data significantly outweighs its initial price tag.

Data Demand Dynamics

Looking towards the future, the appetite for alternative data is set to diversify further. Buyers are projected to focus on B2B data sources, explore datasets from emerging markets, and delve into transactional data that was previously overlooked. This increasing thirst for innovative insights points towards an overall vibrant future for alternative data.

The Role of Artificial Intelligence

Artificial intelligence has transcended from being a mere buzzword to a core component of the alternative data industry landscape. Nearly half of all data vendors now offer datasets specifically designed to facilitate and enhance AI functions. Meanwhile, only 15.5% of buyer organizations remain disconnected from AI utilization, suggesting that the integration of AI in data strategies is becoming commonplace and essential.

Insights from Industry Leaders

Rado Lipuš, the CEO and founder of Neudata, emphasizes the growing recognition of alternative data's value. He notes, "It’s exciting to witness the expanding interest across various sectors, especially as private equity and venture capital entities delve deeper into alternative data applications that were once mainly associated with hedge funds. The enthusiasm from both data buyers and sellers signals a promising growth trajectory, and Neudata is dedicated to supporting their evolving needs as we venture into 2025."

About the Survey and Neudata

Neudata's survey included insights from 157 participants, comprising 60 data buyers and 97 data providers, collected in mid-2024. Among the respondents, many were involved in quantitative investing, while other investment strategies were also well-represented, including discretionary, credit, and macro funds along with private equity. The responses collectively reflect an annual data budget estimated to be around $100 million, while data providers estimated their total annual revenue at about $660 million.

Neudata stands at the forefront, providing critical market intelligence that empowers both buyers and sellers of market and alternative data. By blending in-depth human insight with cutting-edge technology, Neudata offers invaluable resources that save time and costs for clients navigating the dynamic data landscape.

Frequently Asked Questions

What is the main finding of Neudata's 2024 report?

The report indicates that alternative data budgets are anticipated to rise significantly in 2025, driven by increased demand and integration with AI.

How do data budgets compare between large and small firms?

Large firms typically subscribe to approximately 43 datasets annually, while smaller firms usually acquire around 8, revealing a significant disparity in data spending.

What challenges are data buyers facing?

The main challenge identified is the high cost of new data, which 62% of buyers cited as a primary barrier to adoption.

What role does artificial intelligence play in the future of alternative data?

AI is a pivotal element in the alternative data ecosystem, with nearly half of vendors providing datasets to support AI applications, signifying its integration into standard practices.

What trends are expected in the alternative data market?

The market is likely to see an increase in demand for B2B data, insights from emerging markets, and transactional datasets, reflecting a growing interest in innovative data sources.

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