Opening Cross: Teenage Takeover!
That startup was the early SuperDerivatives, which Intercontinental Exchange just announced it will buy for $350 million. Like SuperDerivatives, ICE was only founded 14 years ago, yet has surpassed rivals with much grander legacies, culminating in last year’s acquisition of NYSE Euronext. I wish I could say that 14 years ago I immediately recognized where SuperDerivatives was headed. And that I’d bought stock in the company—and in ICE. Or, for that matter, another company still in its early teens, Markit, which recently completed an IPO on Nasdaq.
To be fair, the experience behind these companies belies their adolescent ages: SuperDerivatives’ CEO David Gershon spent years on Wall Street and in London trading foreign exchange options, during which time he realized that the market didn’t know how to accurately price derivatives. Eureka! From this gap in the market SuperDerivatives was born.
Meanwhile, ICE CEO Jeffrey Sprecher has many years’ experience of derivatives and commodities, having served as president of power plant developer Western Power Group before buying the Continental Power Exchange in 1997 and forming ICE in 2000. And Markit CEO Lance Uggla spent 15 years in sales and trading roles at CIBC and TD Securities struggling with entity data management issues before creating Markit and growing it to the provider of market, reference and index data that it is today.
Not to belabor the point (see also last week’s online-only column about how “old dogs” can teach the rest of us some “new tricks” of their own), but it’s this experience that (a) gives people the understanding of an industry to the extent that they can identify its weaknesses and shortfalls, and (b) gives them the knowledge and heft to pull off taking a startup to a success story. Take, for example, SR Labs, a relatively small provider of low-latency market data platform and feed handler technologies that nevertheless last year raised $53 million in funding from private equity firm Insight Venture Partners (IMD, Jan. 10, 2013) and more recently acquired the Wombat data platform and feed handler business from ICE-owned NYSE Technologies (IMD, June 18): When CEO Srinivasan Ramiah decided to become chairman and split his time between India and New York, the company sought out an experienced industry CEO to take his place, and appointed Richard Korhammer, an industry veteran best known for founding trading technology and data provider Lava Trading to run the newly expanded business. And let’s not forget the experience of one Michael Bloomberg, who last week officially returned to the helm of the company he founded.
Indeed, there seems to be a growing appetite for investment and expansion in the data industry, perhaps reflecting more favorable economic conditions tthat are more conducive to growth—both of companies themselves and their benefactors’ investments. For example, Swedish startup newswire Finwire recently sold a 20 percent stake in its business to a private equity firm to fund plans to expand its business beyond Sweden into other Nordic countries and Europe.
Of course, these are the success stories. For each of these, there are surely many expensive failures (such as Warburg Pincus-backed real-time fixed income pricing startup Benchmark Solutions) as well as initiatives that don’t make it this far—especially those lacking the years of experience described above. After all, what could possibly go wrong with giving “teenagers” enormous amounts of cash? Who’ll be the Justin Bieber of market data?
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
This Week: What is going on?
Is it weird that Euronext bought Substantive? It’s weird, right? Plus WFIC, tick sizes, Microsoft and BlackRock want more datacenters for some reason, and, of course, AI. What does it all mean?
Waters Wavelength Ep. 288: Media’s changing landscape
Wei-Shen and Tony discuss ways to improve the podcast going forward.
Fidelity’s quantum exploration unites theory and proof
The asset manager and Amazon have teamed to put a quantum twist on machine learning.
GenAI could connect ‘constellation’ of vital information technologies
At WFIC, Six Group’s Marion Leslie highlighted the opportunities and risks that the technology holds.
Why can’t we be friends?
The ABA vs most every regulator. LSEG vs BBG. AI vs SaaS. Buy vs build. Lots of drama in the capital markets.
DORA will change the buy vs. build debate… maybe
Waters Wrap: With DORA’s deadline looming, trading firms are having to reassess their long-term tech strategies. Anthony wonders if that means more building and less buying.
JSE rolls out exchange data to cloud Marketplace, built with DataBP
The move—part of a broader cloud migration at the exchange—allows financial firms to connect and subscribe to JSE news, market data, and analytics via the cloud.
The SEC needs a hand with artificial intelligence
The SEC wants to take a tough stance on AI, but it has a talent problem… or a marketing problem. Or both…