Alternative Data Market: Alternative Data: Signal Decay, Provenance Risk and the Buyer Base That Is Smaller Than It Looks

Growth ran at 14.6% from 2020 to 2025, well below the expectations that attracted capital into the sector. Pandemic conditions produced a genuine surge as traditional indicators stopped describing anything and funds paid for real-time visibility into activity nobody could otherwise observe. That demand normalised afterwards, and providers discovered that their most valuable datasets had been sold widely enough that the differentiated returns supporting the price had largely disappeared.
The base case at 15.8% rests on three mechanisms. Physical activity data decays more slowly than transaction panels, because observing ships, facilities and land use produces signals that many buyers can hold without eliminating the advantage. Corporate buyers now represent 31% of spending and want answers rather than feeds, which is a different and more durable product. Third, compliance requirements are consolidating spending toward providers with documented provenance, which advantages scale over specialism.
The bull case at 17.0% assumes corporate adoption continues broadening beyond competitive intelligence into operational decisions, where budgets are far larger than investment research allocations. The bear case at 14.6% is that signal decay accelerates as more capital chases the same datasets, forcing providers into exclusivity arrangements that cap their addressable revenue at a handful of clients each.