Databento Inc. raises $97M

Databento Inc., a market data platform startup specializing in real-time and historical financial data, has completed a $97 million funding round. The substantial investor interest of over $300 million highlights the potential seen in Databento's offering by market participants. New Enterprise Associates Inc. led the investment, with significant involvement from DRW Venture Capital, Redpoint Ventures, and Tribe Capital, among others. This new funding brings Databento's total capital raised to $127 million.

Proceeds from the latest round will enable Databento to enhance its infrastructure and broaden its data coverage across varied asset classes. The company, which was founded in 2019 by former high-frequency trader Christina Qi, directly integrates its services by placing servers within exchange data centers, avoiding reliance on redistributors. Databento plans to boost its data coverage to over 20 data centers and scale its storage capacity by more than 100 petabytes, effectively doubling current capabilities.

Databento claims to streamline the traditionally cumbersome process of accessing financial market data. According to Qi, the firm's API consolidates data acquisition and dispersal by eliminating bottlenecks typical in industry procurement and integration. This approach has led to a notable increase in demand, with revenues increasing 6.65 times year-over-year and a more than twofold growth in active API usage. The company boasts a 97% enterprise customer retention rate and has maintained profitability with a lean team of 24 employees.

The funding underscores a competitive angle as Databento attempts to challenge established players like Bloomberg L.P. and London Stock Exchange Group plc, which dominate the market data landscape. Databento's proposition is that clients should have on-demand access to data without lengthy procurement cycles, posing a flexible and potentially cost-effective alternative to traditional subscriptions.

Looking ahead, the latest infusion of capital positions Databento to expedite its growth trajectory, expand its product offerings, and potentially disrupt an incumbency-heavy industry. With the new board appointments, including NEA's Rick Yang and Danielle Lay, the next phase will likely focus on executing its aggressive expansion plans and continuing to refine its platform to meet increasing market demands.