A Custom Metadata type is similar to Custom Settings. However, there are a few distinct factors that make it even more attractive.

• When you deploy 'Custom Metadata', the associated data you created against it is also deployed to the target organization.
• Deploying Custom settings only deploys the metadata, you will have to manually upload data into the custom setting post deployment.
• With Custom Metadata, you can issue unlimited SOQL queries against them. 
• Moreover, custom metadata fields are manageable, meaning that you can upgrade them from the developer organization.
• This feature is particularly useful for AppExchange applications which previously used Custom Objects / Custom Settings to store preferences and settings.