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What VCs are looking for in fintech

Xignite

Upstart Business Journal fintechThe fintech industry has experienced tremendous growth in the past five years, largely fueled by venture capital investment. Fintech venture investment grew from less than $1 billion in 2010 to more than $14 billion over 12 months in 2015, according to venture capital research firm CB Insights.

We gathered insights from a group of noted fintech venture capitalists to discuss key trends that they expect to play out within the sector in 2016.

Consumer-focused firms will expand their ecosystem

Among the most recognized and successful direct-to-consumer sectors in fintech, a sizable number of marketplace lenders, payment companies and robo-advisory firms have attracted a major proportion of VC startup and later-stage funding. These industries have begun to mature somewhat and have had early winners emerge, such as marketplace lenders Prosper Marketplace, Inc. and Lending Club, online payment processors Stripe, and robo-advisors Wealthfront Inc. and Betterment LLC.

Investment within these areas was one of the hottest trends over the past 12 months, according to Michael Walsh, general partner of San Francisco-based Green Visor Capital.

“We believe these groups probably garnered more attention and investment over a short period of time than made sense, relative to other fintech opportunities. Looking ahead to 2016, while we remain positive on these groups long term, we do believe they may take a back seat to some other areas, such as security, info services, and back and middle office automation,” Walsh says. “We expect to see some consolidation over the short- to medium-term.”

While these main categories may come under pressure in 2016, David Jegen, partner at Boston-based F-Prime Capital, believes there will still be options within the space and expects to see derivative opportunities created expanding their ecosystem.

“For one, companies are extending this business model into new areas, like real estate and insurance, but you will also get some interesting second-order plays,” Jegen offers. “For example, a company like Even Financial is addressing the lead generation problem for these platforms, and a company like Orchard Platform is helping investors access lending platforms. During 2016 and beyond we expect to see startups serving that ecosystem in a broader sense.”

Blockchain technology still poised to dominate

Venture investment is expected to continue to flow to companies engaged in blockchain technologies during this year and beyond. Two important segments sure to attract investment are capital markets and insurance.

“Blockchain tech will be applied to capital markets to enable improved clearing and settlement of various asset classes. Enhanced distribution channels and better decisioning via the application of advanced data analytics will help the insurance industry,” states Pascal Bouvier, fintech expert, venture partner with Santander InnoVentures and past general partner with Route 66 Ventures.

Enterprise companies to focus on leveraging big data Enterprise companies in the financial services space are looking more to automation and data to address costs, improve processes and open new areas of business. Many are focused on improving and leveraging their ability to handle large data sets utilizing Artificial Intelligence, machine learning, natural language processing, micro-targeting and micro-analysis.

This focus will continue to attract venture investment in 2016, according to Karl Antle, partner at New York-based ValueStream Labs.

“One of our favorite spaces is enterprise tech, and we love data and analytics. Not just tools, but proprietary sources of data,” Antle offers. “One emerging segment we're keeping a close eye on is marketplace lending infrastructure. Everyone is servicing in house and there are very few data companies in the space. There are no third parties doing processing or clearing – the infrastructure behind the industry just doesn’t exist, which we view as a tremendous opportunity.”

Beyond 2016

Facing the twin headwinds of possible consolidation and questions of valuation, coupled with the likelihood of increased regulation it won’t be surprising if 2016 fails to match the growth achieved in years recent — especially that seen over the past 12 months.

As for Xignite, we envision a few things; the Asian fintech gold rush has officially started and some major players will pop up in this space; the robo-advisor platforms will manage 25 percent of retail investable assets within five years; and large financial services companies will finally begin to adapt to technological innovation and invest in the cloud.

This is an exciting time for VC firms in the fintech space as the industry is facing incredible speed of innovation and change for years to come.


Stephane Dubois is the CEO and founder of Xignite. He founded Xignite as a wealth management software company but pivoted the company when he could not find any easy market data APIs to power his solution. Now, Xignite provides financial market data APIS to more than 1000 clients in 55 countries — many of them fintech startups in their own right. Before starting Xignite, Dubois was vice president of product management for Advent Software and product manager at Oracle. He has an MBA from the MIT Sloan School.

RECENT NEWS

Xignite, Inc., a provider of market data distribution and management solutions for financial services and technology companies, announced today it has enhanced the data coverage for its’ interbanks and interest rates APIs in preparation for the required transition from the London Interbank Offered Rate (LIBOR) benchmark interest rate at the end of 2021.

Used in financial products such as adjustable-rate mortgages, consumer loans, credit cards and derivatives, LIBOR has been the world's most widely used benchmark for short-term rates. But after the 2008 financial crisis the U.S. Federal Reserve recommended a new benchmark interest rate to replace the outdated and problematic LIBOR. In the U.S market the new benchmark is Secured Overnight Funding Rate (SOFR), which is based on transactions in the U.S. Treasury repurchase, or repo, market, where banks and investors borrow or lend Treasuries overnight. Other countries are introducing their own local-currency-denominated alternative reference rates for short-term lending.

Xignite banking, and Fintech customers that build apps for capital markets, investment management, financing, and foreign currency exchange purposes, require interbank and interest rates data to manage exchange and interest rate risk. Xignite enhanced its Interbanks and Rates APIs with SOFR earlier this year and has now added four of the alternative overnight risk-free rates (RFRs) recommended to replace LIBOR for currencies in respective markets. The new rates include Euro Short-Term Rate (ESTR), Swiss Reference Rates (SARON), Sterling Overnight Index Average (SONIA), and Tokyo Overnight Average Rate (TONAR). These additional rates are available now at no additional cost to customers.

“Our rates and InterBanks APIs were the first REST APIs ever released to serve the needs of the lending and banking industries. They uniquely aggregate rates that are used by dozens of firms globally in critical business processes,” said Vijay Choudhary, Vice President of Product Management for Xignite “Given the major shift the industry is experiencing regarding reference rates, it was critical for us to support those new rates to give our clients the data they need to run their businesses,” added Choudhary.

Xignite’s Interbanks API offers real-time and historical interbank and deposit rates for currencies in 40 countries. Xignite’s Interest Rates API provides interest rate data for over 600 global treasury, money market and private capital market instruments and benchmarks. The new alternative T+1 (24hr+ delayed) rates include:

  •         Europe: Euro Short-Term Rate (ESTR) is an interest rate benchmark that reflects the overnight borrowing costs of banks within the eurozone. The rate is calculated and published by the European Central Bank.
  •         Switzerland: Swiss Reference Rates (SARON) represents the overnight interest rate of the secured money market for Swiss francs (CHF). The rate is calculated and published by SIX.
  •         United Kingdom: Sterling Overnight Index Average (SONIA) is the effective overnight interest rate paid by banks for unsecured transactions in the British sterling.
  •         Japan: Tokyo Overnight Average Rate (TONAR) is an unsecured interbank overnight interest rate and reference rate for the Japanese yen. The rate is calculated and published by the Bank of Japan.

About Xignite

Xignite has been disrupting the financial and market data industry from its Silicon Valley headquarters since 2006, when it introduced the first commercial REST API. Since then, Xignite has been continually refining its technology to help fintech and financial institutions get the most value from their data. Today, more than 700 clients access over 500 cloud-native APIs and leverage a suite of specialized microservices to build efficient and cost-effective enterprise data management solutions. Visit http://www.xignite.com or follow on Twitter @xignite.

06/09/2021

Xignite, Inc., a provider of cloud-based market data distribution and management solutions for financial services and technology companies, today introduced XigniteGlobalCorporateActions, a new advanced API providing detailed corporate actions data for events such as stock splits, dividends, mergers, and spinoffs. The COVID-19 pandemic has led to a dramatic increase in corporate actions, annual meetings canceled, dividend payouts suspensions, and an accelerated company mergers and acquisitions rate. Knowing when a company plans to offer a split or undertake an acquisition is critical for buy-side and sell-side firms.

Corporate action processing is one of the “last frontiers of pain” for investment management, and one of the most manual and complex parts of back-office operations. The lack of uniformity and standards makes it difficult to identify and interpret information correctly. Obtaining accurate and timely information is challenging, and errors can result in painful financial losses. The XigniteGlobalCorporateActions is the first cloud-based REST API to eliminate the pains and complexity caused by legacy data feed and files. The API provides a single-source data stream with consistent information gathered from more than 190 exchanges and over 30,000 U.S. mutual funds.

The recent split of TSLA and AAPL stock on the same day illustrates the complex and far-reaching impact of corporate actions. If a firm does not do this correctly, it will show on historical charts, and their customers will notice. Xignite’s Data Quality team cross-validates our corporate actions data across sources and proactively detects and fixes any missing information. This prevents missing issues such as the TSLA and AAPL splits.

“The industry is facing a ‘perfect storm’”, says Vijay Choudhary, Vice President of Product Management for Xignite. “On one hand you have a massive wave of corporate actions fueled by the pandemic and the rising markets, and on the other you have millions of new retail investors eyeballing their investment applications all day long. One bad corporate action can send your customer service department into a tailspin,” added Choudhary. Additional detail on the Corporate Actions API endpoints:

GetDistributions - Returns cash and stock dividends as declared by the company for a requested security and date range.

GetDistributionsByExchange - Returns cash and stock dividends as declared by the company for a requested exchange and date.

GetEventSummaries - Provides a high-level overview of events for a requested security and date range.

GetMergers - Returns merger events for a given identifier and date range.

GetSpinoffs - Returns spinoff events for a given identifier and date range.

GetSplits - Returns the stock split history for a security for a specified date range.

GetTakeovers - Returns takeover events for a given identifier and date range.

Xignite

Xignite has been disrupting the financial and market data industry from its Silicon Valley headquarters since 2006 when it introduced the first commercial REST API. Since then, Xignite has been continually refining its technology to help fintech and financial institutions get the most value from their data. Today, more than 700 clients access over 500 cloud-native APIs and leverage specialized microservices-delivered modules to build efficient and cost-effective enterprise data management solutions. Visit http://www.xignite.com or follow on Twitter @xignite

05/18/2021

In the foreign metal market and the world of international rates, currencies play the crucial role of acting as the medium of exchange in the transactions that take place.

Currencies like the United States dollar, the Euro, or the British Pound are commonly used around the world in order to get a metal rate. Some companies that offer precious metal live and historical rates have exposed their APIs (Application Programming Interfaces) to allow developers to integrate current and historical metal rates, currency conversion, or other capabilities into their applications.

In order to know about precious metals live and historical rates, there’s a lot of APIs available online, and if you want to try one, Barchart is going to be one of your first options. But if you take a look at what else is in the market, you’ll find alternatives so many great alternatives:

Xignite Market Data Cloud Platform

Xignite Market Data as a Service was one of the first market data services built to run in AWS and they are one of the few vendors that is an AWS Advanced Technology Partner with a Financial Services Competency.

With more than a decade of cloud expertise in building, scaling and operating cloud-based market data technology, it is no surprise that leading financial services and capital markets firms rely on this company to empower their journey to the cloud. Their Metals API Service offers real-time prices and quotes for metals including Gold, Silver, Palladium, Platinum and other base metals. In addition to real-time precious metals prices, the service provides daily London Fixing prices as well as historical precious metal prices and metal news. 

Xignite Cloud APIs are sourced from leading providers such as FactSet and Morningstar as well as Xignite’s own curated, high-quality data.

Read the article Top 3 Alternatives for Barchart Precious Metals Rates

02/25/2021