Steve Cohen’s Point72 Is Investing In a Bloomberg Terminal Rival
Billionaire hedge fund giant Steven Cohen is betting on a startup hoping to topple the ubiquitous $25,000 Bloomberg Terminal nearly every trader, firm, and stock picker on Wall Street uses.
As onlookers speculate whether Cohen will return to the street next year, the venture capital arm of Cohen’s family office, Point72 Asset Management, has invested in the Toronto-based fintech company Street Contxt, according to a Wednesday press release.
Point72 Ventures, which did not disclose how much it invested, joins a consortium of investors backing Street Contxt, including Joe Lonsdale’s 8VC. Taken together, investors have helped the startup raise $15 million.
According to Street Contxt CEO Blair Livingston, most of the top ten global investment banks are in the process of testing Street Contxt’s platform. Essentially, it allows investment banks, asset managers, and independent firms to distribute research, commentary, and other market news to users. Though the main reason why the platform gets so much attention has to do with the way it tailors user information. Street Contxt whittles a deluge of information down to what clients really want to read.
That might seem standard in the age of on-demand video streaming and customized social media feeds, but currently, it’s not how Wall Street research firms operate. Most clients receive all of a firm’s research with a single subscription — often leading to a massive pile of unread emails.
Outside of Wall Street, Street Contxt also stands to help research analysts better reach their audiences. Research firms, which have been squeezed since the financial crisis, could focus on the topics most relevant and attractive to readers and potential clients. Eventually, Street Contxt could even introduce a way for users to pay for each piece of research, rather than paying for that research in bulk.
Not only does that make Street Contxt a competitor to the Bloomberg Terminal, the highly coveted financial data software system, but it’s also “the natural evolution of the Bloomberg terminal,” Livingston said in an interview with Fortune.
Like the terminal, Street Contxt allows users to contact each other, interact on a document, and tag each other. But unlike the terminal, it’s significantly cheaper (at least for now). Livingston said users pay an annual fee of $1,000 to $5,000 for Street Contxt’s services, while the terminal charges users about $22,000 annually.
That high cost is part of the reason why the terminal has lost some of its prevalence in recent years, as competitors such as Money.net and Symphony begin to pop up. In 2016, for example, approximately 324,500 Bloomberg Terminals were used daily, according a report from Burton Taylor International. That was 1% lower than a year earlier.
In comparison, Street Contxt boasts over 180,000 users.
So far Bloomberg Terminal competitors have only managed to build on pieces of the platform’s overall function. For example, Symphony has focused on the secure instant messaging aspect of the terminal, while Street Contxt has been focused on research and content. The latter does also have the terminal’s analytical tools when it comes to a company’s balance sheets.
As far as Livingston is concerned, that financial data is all in the public eye, and nearly instantaneous now thanks to the Internet.