It was encouraging this week to see VC interest in high-performance data management technology for financial markets, a segment often overlooked by fintech funds. TickSmith has announced a C$2 million investment from Illuminate Financial Management LLP, a venture capital firm with a specific focus on capital markets financial technology, giving it some clout as it seeks to compete with the likes of First Derivatives’ Kx Systems, OneMarketData’s OneTick and McObject’s XtremeData, among others.
TickSmith says the money will be used to further commercialise its flagship TickVault big data framework for exchanges, banks and buy-side firms internationally. The company counts CME Group – whose data distribution platform it powers – and National Bank of Canada among its clients.
According to Mark Beeston, managing partner at Illuminate Financial Management, “consolidating high-quality data and making it easily accessible is crucial throughout the whole trade lifecycle.” Describing TickSmith as “at the forefront of this trend,” he says: “With an experienced leadership team, a fully developed product offering and increasingly global client base – the firm strongly aligns with our investment strategy.” Illuminate will take a seat on the board as part of the deal.
Francis Wenzel, CEO and co-founder Co-Founder, TickSmith, adds that “Illuminate Financial are well positioned to help us further develop our flagship product, TickVault, as we continue to build an international client base.”
Specifically, TickSmith says the investment will help “meet demand from exchanges, banks and buy-side institutions to use big data technology to centralise and monetise large volumes of capital markets data.” It says firms are facing ever-increasing data volumes from market sources, and are being forced to deal with growing data points by regulators.
TickSmith cites market data sources like the Options Price Reporting Authority (Opra), which saw an increase to 10.5 million quote and trade messages per second in 2017 from 1.4 million in 2010. It also points to regulators’ growing requirements for firms to store and access vast amounts of transaction, trade and quote data.
The company says TickVault can help firms meet the new post-trade reporting and risk requirements of emerging regulations like MiFID II and the Fundamental Review of the Trading Book (FRTB), by providing access to this information via a single feed for internal compliance and risk management teams.
TickSmith describes TickVault as a “financial data lake platform for capital markets.” The system is used to consolidate internal and external data sources, and then offer access to that data via API. Downstream applications range from local data distribution, MiFID II compliance and reporting, back-testing of trading algorithms, market surveillance, risk management, and machine learning-based analytics.
The platform uses an automated environment that reduces the time required for low-value, high-effort tasks like data preparation and data cleaning. This supports highly adaptable and robust regulatory reporting capabilities as well as allowing quick integration of existing and new data science tools.
TickSmith was founded by four industry veterans of the financial services data and technology marketplace, with experience from firms such as Morgan Stanley, Desjardins, IBM and FIS, the former SunGard.