It’s no secret these days that VCs are getting into data in a meaningful way. Firms can no longer afford to wait for companies, people and trends to come to Sand Hill Road. To start competing for deals, VCs have to be prospecting people, companies and trends well before events like Y Combinator’s Demo Day. Many VCs have built their own data-parsing platforms internally, but one startup launching today, Mattermark, is hoping to be the go-to software for firms to use when quantifying signals of growing and potentially lucrative startups.
Mattermark is the brainchild of Danielle Morrill, who previously founded Referly, a way for people who like to curate products to earn extra cash off recommendations through affiliate revenue. Referly was shut down in March (and most of its staff let go); and Morrill, her husband Kevin Morrill, and Andy Sparks (who joined Morrill via Referly’s LaunchGram acquisition in Feburary) are now focusing on Mattermark.
Morill, who is a graduate of Y Combinator via Referly, became increasingly intrigued by how VCs could mine data to identify companies. She was previously the Editor of Seattle 2.0 and helped produce Seattle 2.0 Index, which was a monthly ranked list of all the local startups. Based on her experiences, she realized there was an opportunity to use some of this data in the VC world. As she explains, “If VCs don’t see a company until YC’s Demo Day, they have less of a chance of winning the deal. So investors need to get smart and identify these opportunities beforehand,” she says.
The software allows VCs to access data from Twitter, news sites, SEC filings, LinkedIn, AngelList, CrunchBase, and the company’s own propriety Startup Index in order to spot potential opportunities and track existing startups. Here is an interesting example of some of the data dives that Morill and her team are experimenting with.
For seed investors it’s like an early-warning system, detecting businesses that are gaining mind share with customers long before they’re a hot deal (for example, the app will identify a startup that suddenly starts to get a lot of organic Twitter mentions). For later-stage investors it’s a way to research a startup and get a lot of information about them in one place, and even compare them to other companies in their space (e.g. an increase in LinkedIn followers correlates well with later-stage success).
You can query, track and organize companies by stage, vertical and geography and download this data to Excel or PDF. And Mattermark makes all this data more digestible with powerful filters. For example, you can query which startups are building developer tools who haven’t raised a Series A yet, and rank these companies by engagement on Twitter. The site also provides real-time alerts and weekly email digests.
Beyond just for sourcing deals, the software, says Morrill, can also be used to research the background of a potential investment or generate sales leads for clients. Referly-backers Andreessen Horowitz, Ignition and NEA did a follow-on round in Mattermark, and are actually using the application internally. Morrill adds that the startup is also looking to build custom applications for certain firms.
There is a free subscription product available that provides a weekly newsletter and access to all company leaderboards. The paid pro account is a subscription and provides full database access, custom reports and alerts.
There’s no doubt that there is a significant opportunity in being the Bloomberg terminal for VCs and investors. Until recently, most of the investments were sourced via word of mouth or introduction. It’s a different world for VCs these days and knowledge and data is now power.
As Morrill explains, “We don’t believe we can replace investors’ ability to build relationships with entrepreneurs, but we do think we can help them source opportunities more efficiently and reduce the chances of missing a whale.” And certainly the success of Mattermark will be hinged upon whether it does allow a VC firm to help find the next Instagram.