What is the financial value of our data sets to a 3rd party?

A simple question to ask at your next board meeting: “What is the financial value of our data sets to a 3rd party?”

Leveraging the financial value of your data asset, on top of the usual multiples of revenue or EBITDA or balance sheet assets, enables boards to consider a wider range of strategic options to drive up shareholder returns.

Once a data valuation programme has been completed, a fully informed board will have at their disposal an asset that can be used to enhance business (and portfolio) performance and value in multiple ways:

- Leverage in an M&A transaction, on the buy side or sell side. The data asset should be considered as an asset in addition to the revenue and EBITDA Multiples.

Why?

• Generation of additional revenue streams.

• The data that a company stores can be used to generate new revenue streams, as the data you collect will be valuable to someone.

• Leverage as collateral in a capital raise.

- Traditional lending will put a charge over your balance sheet assets. “However, you are not yet able to put data on your balance sheet!” we hear you say. True, and yet people still buy and sell data in multiple industry sectors. This has been recognised by data-savvy lenders, who are coming to market with data-related products, recognising the full financial value of the data asset, whether on the balance sheet or not.

Of course, there are a multiplex of dynamics that need to be considered in a data valuation, including Ownership, Economic Benefit and Accessibility.