Encouraging economic signals in the past week—namely the Dow Jones Industrial Average’s run of record highs and better-than-expected job figures from the US Bureau of Labor Statistics—suggest that the markets continue to strengthen, and with them, the opportunities available both to established service providers and entrepreneurial startups.
Over recent months, IMD has reported on a raft of startups looking to carve out a niche as markets improve and firms start to seek out content and tools that can help generate growth—even if it means spending more money to assemble a portfolio of vendor products—rather than simply looking for ways to cut costs.
And if firms want to kill two birds with one stone, they could do worse than take a look at one of the startups in this edition of IMD—Cordatum, a startup consultancy set up by vendor and interdealer broker data veterans Philip Winstone and Justin Corp to help companies whose primary business isn’t selling data to identify and commercialize the value of the data they generate. As well as packaging data for companies—and in some cases, acting as the licensing body for hard-to-find data sources—Cordatum will also help firms identify and source niche datasets, allowing them to outsource the headache of finding data and focus instead on getting value from using the data.
Then, if a company needs advice on corporate or business development, or is so successful in its new-found data strategy that it decides to put itself on the market for a little M&A, it could turn to another startup—Financial Technology Consulting Limited, set up by former Hawkpoint M&A veteran Alexis Thieriet.
But with any startup, there’s always a risk of failure—as real-time fixed income and derivatives evaluated pricing startup Benchmark Solutions can attest, having quietly erased evidence of its existence last week. Hardly a typical startup, it had backing from Warburg Pincus, which put Benchmark together under Jim Toffey, who, as co-founder of Tradeweb, knows plenty about startups with big ambitions. It also combined the assets of existing businesses—Julius Finance, a provider of valuation models, and BQuotes, a technology vendor that created price displays by parsing quotes from emails between brokers and clients, which was acquired by Moody’s in 2008, then sold to Warburg Pincus in 2009. From there, Benchmark spent about 18 months flying under the radar while integrating its assets, building additional tools, and incubating the result before eventually launching in July 2011.
Benchmark lasted just over 18 months more—winning an IMD Award last year for Most Innovative Market Data Project (Vendor) along the way—before its demise, though some sources saw the writing on the wall when senior execs began surfacing at new employers.
Also surfacing in a new role is industry veteran Jeff Wells, who has left NuPont, his product management and marketing consultancy—where he assembled a roster of data industry marketing vets—to join BATS Global Markets to lead initiatives such as its submission to provide the Securities and Exchange Commission-mandated Consolidated Audit Trail. Certainly there are few who appreciate the challenges of handling huge volumes of market data as much as Wells.
However, 30 others also filed intents to bid last week, including regulator FINRA, exchanges such as Nasdaq, NYSE Technologies and the London Stock Exchange’s MillenniumIT business, vendors such as Thomson Reuters, SunGard, IBM, Cinnober and First Derivatives, and outsourced development providers such as HCL, Infosys and Wipro, as well as a few lesser-known names and startups, such as StrataQu and TradeDynamix, about whom no information is publicly available, and one company that not long ago started out as a California startup, and has more recently been active in efforts to make exchange data more freely available—Google.
With all the startup exciting activity going on right now, I wonder when we’ll see a Google for the market data world?
Bill Murphy, CTO of Blackstone, once again joins the podcast to discuss the private equity firm's new offices, designed to house its innovations team.Subscribe to Weekly Wrap emails