SpaceKnow, a satellite imaging company that scans the earth for clues on economic activity for hedge funds to trade on, has raised $4m from a club of investors, highlighting the rising appetite for “alternative data” sources.

Investment groups are increasingly turning to non-traditional information to help navigate financial markets, ranging from email receipts and app downloads to social media chatter. Tabb Group, a consultancy, estimated last year that the alternative data spend will double in the next four years to $400m annually, writes Robin Wigglesworth.

The SpaceKnow funding round comes soon after Prattle, a “sentiment analysis” company that uses artificial intelligence to turn things like central bank speeches into tradable signals, also raised a $3.3m slug of money from investors late last month, as the alternative data industry hots up.

SpaceKnow currently provides a realtime index of Chinese manufacturing activity derived from scanning thousands of industrial sites across the country, and a separate gauge of African economic growth as estimated by light intensity seen from space.

Other satellite companies scan crops for signs of their fertility, or car parks for clues on a retailer’s revenues, using an AI field known as “deep learning” – a technique Facebook uses for its photo recognition function – to turn raw images into numbers that can be fed into automated trading algorithms.

SpaceKnow’s fund-raising, led by German venture capital firm BlueYard, will help it develop “an indexing artificial intelligence that will scan, understand and describe every square inch of the Earth surface daily using satellite imagery”, the company said in a statement.

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