BMLL, the independent provider of harmonised, historical Level 3 data and analytics across global equity and futures markets, has secured a Series B investment of USD 26 million. The funding round was led by Nasdaq Ventures, FactSet and IQ Capital’s Growth Fund, and supported by ACF Investors and other new and existing investors.
BMLL provides historical Level 3 data and analytics to capital markets clients, including banks, brokers, asset managers, hedge funds and global exchanges, as well as regulators and academic research institutions. BMLL’s order book data and analytics are used by clients to derive predictive insights, back-test trading and investment strategies and gain an understanding of how markets behave.
The funding will support the company’s plans for growth, explains Paul Humphrey, CEO of BMLL. “We’re going to grow our content, we’re going to grow our customer base and we’re going to grow our presence, most notably by opening an office in New York” he says.
Regarding content, Humphrey explains that the plan is to go deeper into existing asset classes rather than branch out into new ones. “Right now, we’re historical specialists in equities, ETFs and futures. We’ve done well by sticking to our rails and not deviating from that. By becoming golden in our coverage of those asset classes, across USA, Europe and Asia, the partnership opportunities and use cases just explode.”
This wide range of use cases is fuelling a growing demand for Level 3 data, suggests Humphrey. “Sell side firms use our data to carry out detailed order book analysis in order to optimise algo performance and improve client execution outcomes, as well as managing execution risk and reporting more effectively. The buy side can identify new sources of alpha and trading signals, and improve execution analytics and reporting by integrating our data and analytics into their trading workflows. And exchanges and trading venues have been a fantastically successful client segment for us, because they’re constantly looking to optimise their liquidity provision and execution quality, and we help by providing them with insights into market structure dynamics. Regulators and academic institutions also increasingly need Level 3 data, and we’re proud to have the Financial Conduct Authority (FCA) and New York University’s quant team as customers.”
The FCA is using the BMLL Data Lab and BMLL Data Feed to access granular data to examine the behaviour of each individual order, including order fill probability, order resting time and order queue dynamics, to better understand how firms are interpreting and benefiting from regulatory guidelines. NYU’s Quant Team uses the BMLL Data Lab to carry out research on the futures market at the university’s Mathematics in Finance Program.
The Series B Investment comes at a time of rapid growth for BMLL. As well as expanding into the futures markets, the company has signed up a number of new clients and recently launched BMLLVantage, a no-code data and analytics visual application giving access to full depth order book data for EU and US equities and ETFs.
One investor that has been with BMLL since the company’s earliest stages is IQ Capital, a deeptech venture capital firm. “As a deeptech fund, we look for markets that need to be changed, markets that have reached some sort of impasse, where new technology is needed,” says Kerry Baldwin, Co-Founder & Managing Partner at IQ Capital. “When we first backed BMLL with their bold vision, it was to go into Level 3 data as deeply as we could, with the most accurate source of data. Because if you get that piece right, you can always move up, whereas you can’t start with Level 1 or Level 2 and move down. And the tier one names that have been brought into this round of funding validate the fact that now is the time for Level 3 data.”
Humphrey elaborates on the power of Level 3 data and concludes with an interesting analogy. “Level 3 data contains every trading intention – everything anyone has tried to do – and people are able to mine that. Looking back at my early days of being a trader, we’d all be on phones, yelling across the desk, and a trade happens. The second I’ve traded, the question I’d always get asked from across the dealing room is ‘how are you left?’ Level 3 data tells me how every trade was left, across 65 venues, across every single stock and futures contract, over seven years, and it’s all immediately accessible. That’s pretty mind-blowing.”
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