The nasty courtroom battle between two of the biggest alternative data players has ended in a settlement.
Carlyle-backed Yipit and Jefferies-owned M Science agreed to drop their lawsuits against each other as part of the settlement, according to a person familiar with the arrangement who was not authorized to speak publicly. The details of the settlement have not been made public.
The lawsuits, which centered on claims that two employees stole trade secrets from one rival and passed them on to another, rocked the alternative data world. These firms have grown in scale and revenue as hedge funds and asset managers use their datasets to find differentiated intel to inform bets. Yet, it remains a relatively small industry where everyone knows everyone. The legal drama revealed a side of the industry that had firms worried about how ultra-secretive asset management clients would react.
“There is a sense of industry-wide relief that these companies (and their clients) are out of the spotlight,” said Don D’Amico, the founder of Glacier Network, which advises data buyers and sellers.
Yipit declined to comment. M Science and Jefferies did not respond to requests for comment.
The fight began in October of 2024 when Yipit, known for providing hedge funds with data drawn from credit card receipts, sued two former employees. It alleged the employees, who had joined its rival, had stolen “secret information at the heart of Yipit’s business,” including client information and plans for a new dataset focused on Apple.
At the start of this year, Yipit expanded the scope of its lawsuit to include M Science and its leadership, stating that some of the firm’s executives encouraged the two former Yipit salespeople to take their former employer’s intellectual property. M Science then responded with its own lawsuit, accusing a Yipit employee of viewing M Science data with an outdated login.
While the settlement is a net positive for the burgeoning industry, the fact that it was behind closed doors increases the likelihood of another fight down the road, D’Amico said.
“We’re left without legal precedents to apply to future disputes where employees jump to a competitor, which may be more likely to happen in a job market that strongly favors experienced applicants,” he said.
