TransFICC secures strategic investment from Illuminate Financial and Main Incubator to address fragmentation in fixed income markets

12 October 2017

TransFICC, the specialist provider of low-latency connectivity for fixed income and derivative markets, has secured €1 million in early stage investment from capital markets specialists, Illuminate Financial and Frankfurt based early stage investor in FinTech, Main Incubator. TransFICC provides banks and asset managers with an alternative to maintaining connectivity to multiple e-Trading venues, offering a unified low-latency, robust and scalable API.

TransFICC enables financial institutions to access their required eTrading venues, while streamlining technology requirements and reducing operational costs. Its co-location or cloud-based hosting technology also supports microsecond timestamping of data, helping to provide an audit trail for best execution requirements.

Market fragmentation is a growing concern for bond market participants, as the number of electronic venues and trading protocols continues to rise. As of January 2017, the number of trading platforms for fixed income trading stood at 128 1 -, with approximately 220 different API formats resulting from a wide variety of trade execution protocols including auction, click-to-trade, CLOB, RFQs and work-up sessions – each of which require separate connectivity.

As a subsidiary of Commerzbank, Main Incubator invests in FinTech firms that provide solutions for the banking and capital markets sectors. TransFICC was founded by a former LMAX, ICAP and Reuters executive, Steve Toland in 2016, in partnership with former LMAX software developers, Judd Gaddie and Tom McKee.

Earlier this year TransFICC joined The FinLab accelerator programme in Singapore, established by United Overseas Bank Limited, a Singapore-based bank with a global network over 500 offices in 19 countries, and SGInnovate, a private-limited company wholly owned by the Singapore Government, which works with deeply-technical products that have research-originated IP at the core of their company.

Both Illuminate Financial’s Mark Whitcroft and Main Incubator’s Christoph Osburg will become nonexecutive board directors.

Steve Toland, Founder, TransFICC comments: “Banks and the buy-side have already shown significant interest in how TransFICC enables organisations to quickly and easily connect with the highly fragmented Fixed Income and Derivatives markets. We look forward to working with our investors, leveraging their knowledge of capital markets and extensive industry connections, to acquire new clients and connect to further trading venues.”

Mark Whitcroft, Founding Partner, Illuminate Financial comments: “The TransFICC team have clearly identified an opportunity to help banks and money managers trim trading connectivity costs, while building a more comprehensive picture of market liquidity, via a single API. As MIFID II continues to push bond trading towards more transparent electronic venues and pressure on ROE builds, tools that can deliver low-latency connectivity while simplifying the trading lifecycle will be well positioned for market growth.” 

Christoph Osburg, Investment Manager, Main Incubator, comments: “TransFICC Ltd., our first investment abroad, has developed a simple, fast and flexible API software solution for the Fixed Income and Derivatives Markets. Due to the implementation of several interfaces of various electronic trading platforms in only one API, TransFICC gives banks and traders the opportunity to achieve efficient electronic trading connectivity based on modern technology infrastructure, and to secure significant potential savings in comparison to existing solutions. That´s obviously a very interesting and useful tool for anyone involved in Fixed Income trading."