Facing platform shutdown, former IEX Cloud head buys its assets in 11th-hour bid

On August 12, Tim Baker, former head of IEX Cloud, told his former colleague, Pedro Aguayo, that he thought it was a shame that IEX, a New York-based upstart exchange, had decided to shutter its cloud-based data marketplace and development center.

The business accounted for less than 2% of IEX Group revenue and had run at a loss since its inception. On May 31, IEX alerted clients that they had three months to find alternatives, as it planned to retire all IEX Cloud products on August 31.

“Well, you know there’s a possibility of buying the assets,” Baker recalls Aguayo saying. He explained that a potential buyer had kicked the tires on the idea, as they could see merit and money in the platform, but they largely operated outside of financial services and didn’t feel they were the right fit.

“Well, why don’t we buy the platform?” Baker said.

So, they did.

Baker, Aguayo—who is IEX Cloud’s head of product and technology—and a silent partner joined forces to bring together a lightning-fast acquisition of the business’s assets, with the goal of replicating IEX’s offering as closely as possible. Terms of the deal are not being disclosed.

Starting from scratch

Because the trio is buying assets, and not a business, they are starting from scratch—zero revenue and a blank subscriber list, though Baker says the new service has already secured a small number of client commitments. What they do get is all the platform’s infrastructure, a copy of the code, and agreements with the minimum number of content providers needed to be able to turn a new platform on. The new website is planned to be up and running on Tuesday, September 3 for registrations, while the data will be turned on in phases.

IEX Cloud is a cloud-based marketplace for IEX’s proprietary equities data from its IEX exchange, along with third-party datasets. Its aim is to allow clients, primarily fintechs and individual day traders, to spin up instances in the cloud where they can develop and run their own applications, consuming data via IEX’s APIs.

However, not being tied to a single exchange opens up avenues for growth that were previously unreachable. In the short term, Baker emphasizes that he wants to make as few changes as possible to the platform and service, but in the long term, the group will consider new markets such as start-up hedge funds, institutional flows, and partnerships with other exchanges.

“The industry has been talking about moving to the cloud for years, about allowing people to slice and dice the data and just pay for what they need instead of signing these big contracts. And IEX Cloud was a pioneer doing that,” Baker says.

Baker became head of IEX Cloud in February 2020, spending just over a year and a half there. At the time, it had a small but growing list of institutional clients, and it had counted private browser DuckDuckGo as a client, which used IEX Cloud to power its price charts.

“It’s a very innovative platform, and it enables innovation as well. Because anybody who wants to build a website will not be able to afford even the most basic market data contract. But what they can do is they can sign up to Blue-Sky API, and it might only cost them $50 a month just to get going,” he says.

He stops short of calling IEX Cloud’s model—which will be renamed, for now, Blue-Sky API—“disruptive,” but he does hope its new life continues adding to what he calls “a very new way of doing data.”

Users can register for BlueSkyAPI.com on its landing page starting September 3, though Baker, who runs his own consultancy under the name Blue Sky Thinking, says this moniker will not be the company’s final name.

Baker also plans to continue his duties at Expero, where he is managing director and financial services practice lead.