It’s pretty rare that B2B software platforms make to the front page of the Wall Street Journal. But Yodlee pulled it off today.
If you know Yodlee, it may be through their “screen-scraping” technology sold to folks like Mint. Yodlee is the “behind-the-scenes” technology personal finance app providers, such as Mint, use to login to your accounts (they need your username and password) and aggregate the information into the app. (If you do not use one of these apps I recommend trying it, they are cool and scary at the same time. I use HelloWallet.)
The WSJ article has a great graphic about Yodlee’s three businesses:
Yodlee went public 13 months ago (YDLE). I noted at the time it would be interesting to learn more about Yodlee’s data analytics business about which the company had been quite mum. The Wall Street Journal article is about this part of the business.
The gist of the article is that Yodlee collects a ton of data and some of the data is at the transactional level. Transactional data can then be resold to retailers or to investors who are looking for sales data on a more frequent basis than public companies are wont to disclose. That would, of course, give these traders a potential edge.
The WSJ’s main news angle here is twofold:
1) Can this data, though stripped of personally identifiable information, be tied back to individuals? Some geeks looking at other similar data say “yes”, Yodlee says “no”. The WSJ likes the specter of uncertainty!
2) Can this data be used by large hedge funds to predict public company revenue or other trends? The WSJ points out that one of Yodlee’s biggest customers is Point72, formerly SAC Capital Advisors, which plead guilty to insider trading charges and paid $1.8 billion in fines.
Point72 assures us the data does not contain any “material nonpublic or personally identifiable information”. The WSJ’s subtle, salacious implication is “how can we be sure?”
More interesting to me are two conclusions:
1) As long as you have $50k to $4 million (according to an expert in the article), you too can have access to this immaterial, public information. I find that to be an oxymoronic concept if there ever was one, but I guess it is really just legal semantics.
2) The dream of almost every B2B cloud platform, industry cloud, marketplace–or whatever you wish to call them– is to be able to monetize the data they are collecting for other purposes. After all, one of the nine value propositions of B2B Cloud Platforms is Industry Big Data.
A key issue for these businesses has always been having the rights to use the data, or even with the rights using the data without pissing off or compensating the people who provided it to you for other reasons. At Ariba, I was pretty sure we had a good enough sample of daily POs and Invoices to trade some companies stocks or to sell to hedge funds, but even if it was legal, they would not have appreciated the notion!
Yodlee appears to be succeeding in collecting anonymized consumer data and reselling it, but I’m not so sure an article on the front page of the WSJ was what they were looking for. It could be great for potential customers of their data and investors, but not so great for arousing the scrutiny of regulators and watchdogs!