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MADISON (WKOW) — Twin brothers and their Madison financial analytics technology firm are shaking up the investing world with their alternative data and interest from investors.
Indianapolis-based Allos Ventures plowed $2 million this spring into Quiver Quantitative. Quiver is headed up by 22-year old UW-Madison graduates Chris and James Kardatzke.
They say their venture together is the logical extension of long-time shared interests and friendship.
“We played on a soccer team together,” James Kardatzke said of their formative years in Spring Green. “We did mock trial together.”
“We used to do fantasy football where there were a lot of statistics involved,” Chris Kardatzke said. “I can’t think of anything in particular that was super comparable to what we’re doing now.”
What they’re doing now is scraping and compiling data from far and wide to give stock market investors unique information that may help inform their trades. Their target customer demographic is not hedge fund managers.
“From the start, we knew there was this opportunity to bring alternative data sets to retail investors,” James Kardatzke said.
His brother drilled down on the type of data they’re offering up.
“There’s like social media data, like keeping track of which stocks people are talking about, keeping track of how many followers different companies have on Twitter,” Chris Kardatzke said. “Data on which patents different companies are filing for.”
“Data on stock trading by U.S. politicians, it’s one of more popular data sets,” he said.
Most of the data Quiver Quantitative offers is available elsewhere. But the Kardatzke brothers, seven employees and three interns spread across the country collect and make accessible the reams of information. It includes corporate jet flight schedules.
James Kardatzke cited an example of how that alternative data gave investors a leg up even before Quiver was in the consulting mix.
“There’s a company…Occidental Petroleum, where there was speculation that Warren Buffett and Berkshire Hathaway might be making a big investment in the company, might be acquiring them,” James Kardatzke said. “And then all of a sudden, the corporate private jet for Occidental takes off and lands in Omaha, Nebraska, which is the headquarters of Berkshire Hathaway. So instantly, everyone tracking that data set knew what was going on with Occidental, knew that’s a really good sign that an acquisition is about to be announced,” added Kardatzke. “And sure enough, a few days later there’s an announcement and the stock went way up.”
Quiver’s start-up roughly coincided with retail investors collaborating through online sites such as WallStreetBets to drive up the stock price of companies such as GameStop and make handsome trading profits. Chris Kardatzke said information is the key to helping traders survive and thrive against a colossus in the stock market.
“We, from the get-go, set out to make this stuff available to anybody,” Kardatzke said. “That’s really our goal: to provide alternative data where it wasn’t accessible in the past.” Quiver’s online platform does offer much free analysis, with approximately 1,000 paying subscribers.
Investing world reacts
Quiver’s jump-start came from The Idea Fund of La Crosse. The Idea Fund’s Jonathan Horne said a relatively modest investment was prompted by the fledgling company’s impressive business vision.
“It’s been remarkable,” Horne said. “And we put our heads together and developed metrics that we hoped they would hit within nine months,” he said. “They hit those initial metrics in 30 days.”
”They’ve driven a ton of user growth in the last two, two and half years since we invested,” Horne added.
Director of Marquette University’s Business Analytics program, Professor Scott Rex, said Quiver Quantitative’s been impressive, but appears to be at its first business crossroads.
“Crowdsourcing data is really hot, and the notion of alternative data they play off is really strong as well,” Rex said. “They’re nicely positioned competitively. I’m anxious to see what step two is, to be honest.”
Chris and James Kardatzke said increasing investments in Quiver will allow them to pursue deals to acquire proprietary data to add to their customer offerings.
James Kardatzke said stock trading customers can expect more and more support. “Deeper analysis; different back tests we’re doing on the data; different research tools that actually gives them a leg up when making trading decisions.”
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