What is alternative data?

A plain-English introduction to alternative data: what it is, why investors pay for it, and the main signal families.

The short definition

Alternative data is information used for investment decisions that does not come from traditional sources like financial statements, price feeds or sell-side research. It is usually generated as a by-product of economic activity — payments, hiring, shipping, web browsing, satellites — and only becomes investable signal after collection, cleaning and normalization.

The appeal is simple: if a dataset tells you something about a company's revenue, costs or demand before it appears in a filing, you can position earlier than the market.

The main signal families

Most commercial alternative data falls into a handful of families: card and payment panels (consumer demand), job postings (company intentions), web and app traffic (digital demand), geolocation and foot traffic (physical demand), satellite and geospatial (physical activity), supply chain records (trade flows), public records (filings, patents, clinical trials), sentiment and news analytics, and on-chain crypto flows.

Each family has its own economics, coverage quirks and compliance posture — this site indexes them as categories, with the providers and open datasets inside each one.

Who buys it and why

Hedge funds and quant desks buy alternative data to build signals with measurable alpha. VCs and PE use it for deal sourcing and due diligence. Corporate strategy teams use the same feeds for competitive intelligence. The common thread: a willingness to pay for data that changes a forecast.

Typical licenses run five figures a year per dataset, which is why evaluation (history, coverage, point-in-time correctness, delivery) matters so much before signing.