In 2019, FIA welcomed 20 start-ups from around the world to its fifth annual fintech showcase, the Innovators Pavilion, the event that takes place at FIA’s Futures and Options Expo in Chicago.
The Innovators Pavilion provides a unique opportunity for a select group of fintech startups to showcase their solutions for the derivatives industry and pitch their services directly to Expo attendees, including senior executives and decision-makers from exchanges, clearinghouses, banks, brokers and trading firms.
Since their participation, many of these startups have achieved notable milestones in their development, including additional funding rounds, expanded services, high-profile customer wins and outright acquisitions.
As FIA gears up for the 2024 Innovators Pavilion, MarketVoice highlights five of the dynamic firms from the 2019 Innovators Pavilion and the key milestones in their growth during the intervening years.
BMLL Technologies: Historical data and analytics platform
BMLL Technologies’ mission is to unlock the predictive power of pricing data and offer clients the insights they need to understand how markets behave and make more informed decisions.
The UK-based company, which was founded in 2014 and grew out of a research project at Cambridge University, provides historical Level 3, 2 and 1 global equities, ETFs and futures data from more than 100 trading venues. It also provides the analytics needed for order book simulation, execution applications, algo testing, and other functions that banks and trading firms typically build in-house.
The data captures every insert, modify, execute and delete order book message available at a T+1 basis at tick level granularity. The company says this picture of market quality, liquidity and order book dynamics empowers clients to understand how markets truly behave.
Over the last 18 months, BMLL has added more than 40 equities and futures datasets and five years of nanosecond unconflated OPRA options data to its offering. Over the same period, the company has built a US-based presence and increased its client roster, now counting banks and brokers, asset managers, global exchange groups, hedge funds, regulators and academics as clients.
In October 2024, BMLL secured $21 million in strategic investment, led by market maker Optiver, with participation from CTC Venture Capital and existing investors. In conjunction with the investment, Optiver said it is using BMLL’s historical Level 3, 2 and 1 data to power its algo development, execution analysis, surveillance, market validation and market structure insights.
The strategic investment follows BMLL's $26 million Series B investment from Nasdaq Ventures, FactSet, IQ Capital’s Growth Fund and Snowflake Ventures in 2022/2023. Prior to that, the company raised $36 million through Series A and seed funding rounds.
Cappitech: Helping clients comply with multi-jurisdiction transaction reporting obligations
Cappitech provides a scalable cloud-based data aggregation platform for regulatory reporting that allows companies to ingest data from both internal and external sources and manage reporting requirements in multiple jurisdictions through a single dashboard.
In 2021, the Tel-Aviv based company was acquired by IHS Markit, which had selected Cappitech’s platform two years prior as a key component of its SFTR (Securities Financing Transactions Regulation) service. IHS Markit was looking to capitalise on the established relationship and existing integration to expand its suite of regulatory reporting offerings to the financial industry.
A year later, S&P Global acquired IHS Markit and Cappitech became part of S&P Global Market Intelligence, along with Catena, a provider in regulatory reporting in Asia. Today, the S&P Global Market Intelligence Cappitech platform covers a wide range of regulatory regimes, fully automates the reporting process, and is used by more than 600 banks, brokers, asset managers, hedge funds and corporations globally.
Cappitech also takes a collaborative industry leadership role and has led initiatives such as the UK Securities Financing Transactions Regulation design partnership and the creation of working groups to prepare for upcoming regulatory changes.
Hivemind: Creating valuable datasets from unstructured sources
The founders of Hivemind originally worked at Winton Capital, a systematic hedge fund based in the UK. They started working on a project to solve internal data problems and came up with a novel way to combine machine and human intelligence. The project proved so successful that in 2018 they spun it out as a separate company with backing from Barclays and Fidelity International. Hivemind participated in the Innovators Pavilion a year later and won the competition's top Innovator of the Year award.
In 2022, hedge fund Two Sigman acquired Hivemind’s software platform, which combined automation and distributed human intelligence to distill semi and unstructured data sources into high-quality, machine-readable data sets. Hivemind’s software was integrated into Two Sigma’s data engineering platform to enhance its data preparation, data workflow, and machine learning capabilities, ultimately amplifying Two Sigma’s ability to ingest data quickly and utilise it more effectively for investment decision-making. Several former Hivemind data science and engineering team members also joined Two Sigma in London.
Raft Technologies: Global ultra-low latency wireless network
Raft Technologies, founded in 2013, delivers an ultrafast wireless transcontinental communications system that uses high-frequency radio signals to connect capital markets destinations in the US, Europe, and Asia Pacific.
The company says its system, which uses RF Skywaves on land or across oceans, can transmit market data and order messages between major trading centres much faster than fibre optic cable. It also claims to have an edge over microwave systems because it does not require line-of-sight transmission between relay stations.
The company has raised around $60 million to date with investors including 7Ridge, Scale-up VC and Varana Capital.
24 Exchange: Round-the-clock trading
Bermuda-domiciled 24 Exchange, the brainchild of electronic trading entrepreneur Dmitri Galinov, aims to offer trading in multiple asset classes on a 24-hour basis at dramatically reduced trading costs compared to traditional exchanges.
Galinov, whose experience includes building several successful off-exchange trading networks, including FastMatch, Direct Edge and Lava Trading, has worked with numerous banks and non-bank market makers since founding 24 Exchange in 2018 to provide liquidity for its products, which include FX non-deliverable forwards, crypto NDFs (meeting regulatory standards set by the Bermuda Monetary Authority), FX swaps and FX spot.
24 Exchange has also submitted an application to the US Securities and Exchange Commission for a licence to create a new national securities exchange. If approved, the new US equities exchange, 24X National Exchange, will be the first fully electronic exchange in the US to offer round-the-clock trading of securities.
In 2021, 24 Exchange announced that it had raised a $14.25 million funding round led by Point72 Ventures. A year later, it raised a further $7 million in a funding round led by Morgan Creek Digital, Aspire Financial, Blackwells Capital and several individual investors to support the expansion of the company's trading platform to additional asset classes.
