Forefront Communications

Waters Technology: Goldman Leads $38 Million Funding Round for Visible Alpha


Mark Dowd

Mark Dowd

One of the world’s largest trading banks has led a significant funding round for Visible Alpha, netting the research platform provider $38 million in fresh capital as it plans to expand its international presence.

Along with Goldman Sachs, Santander, Macquarie Group, Bank of America, Morgan Stanley, UBS, Royal Bank of Canada, Wells Fargo, Citi, Jefferies and Exane BNP Paribas, as well as existing investors, participated in the funding round.

Visible Alpha operates a platform designed to facilitate the exchange of research, which is being radically changed under the revised Markets in Financial Instruments Directive (Mifid II). Since January 3, when the rules came into effect, firms have been obliged to separate the costs of research from execution commissions, a process known as unbundling.

The firm currently serves over 100 buy-side firms with combined assets under management of over $16 billion, with over 450 research providers providing content, it says.

The investment will be used to further develop the platform, according to Mike Stepanovich, president of enterprise services at Visible Alpha, as well as to further integrate Alpha Exchange. Visible Alpha acquired the firm in November 2017.

The capital boost will also be used to expand Visible Alpha’s presence in Europe, as well as extend into Asia-Pacific, he adds.

“We’ll continue to invest by adding new services that will set us apart from other Mifid II providers that came in this year, and don’t have that same injection of capital,” he says. “I think we’re one of the few firms offering an end-to-end service, and we’ll use the money to complete the integration of the acquisition, in addition to looking to expand our operations more throughout Europe, which we started in 2017, and you’re likely to see us extend into Asia at some point during 2018 as well.”

Mifid II’s unbundling rules have given rise to a number of research-specific platforms designed to help firms comply with the new provisions. While the company is focused on integrating Alpha Exchange and expanding in line with its strategic objectives, Stepanovich adds that it is also keeping an eye on potential new acquisitions in the future.

“We’re in a natural cycle right now—Mifid II was announced and there was a massive explosion of fintech investment and companies. Now that it’s here you’re going to see a lot of consolidation. I think we’ll look to be smart throughout the year, and it’s not a key focus right now—our focus is to absorb the Alpha Exchange acquisition and seamlessly integrate into our platform, and we’ll be heads-down on that. But come the middle of the year, and looking toward the following year, we’ll always be opportunistic if it looks like there’s something that could plug into the broader platform and help differentiate ourselves.”

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