Xignite is out to democratize access to financial data, which has exploded in the past decade with the onset of real-time, 24-hour trading. It is doing so by making that data more accessible via cloud computing and has just raised $10 million in a second round of funding, it announced today.
Financial experts once accessed the data exclusively from terminals such as Bloomberg machines or trading computers. But now wider swaths of people want to access data in real-time from the web and mobile apps.
The problem is that financial data has exploded in volume. The financial markets generate 100 times more data than they did just five years ago.
Converting that data so that it can be delivered to the right places is an expensive mess. The data are more plentiful because of high-frequency trading, the rise of regional exchanges all around the globe, and an ever-expanding pool of financial instruments.
The result is huge infrastructure costs for companies that need to receive, reformat, or filter the firehose of data coming from various stock markets.
Xignite’s offering will make financial markets more transparent, as more consumers and businesses will be able to access market data and understand it immediately.
“This is the democratization of data,” said Joel York (pictured below), chief marketing officer and general manager of direct sales for Xignite, in an interview.
StarVest Partners led the round. Also participating were John Steffens of Spring Mountain Capital and former vice chairman of Merrill Lynch; Altos Ventures; Startup Ventures; and Peter Caswell.
Xignite hopes to transform the way that financial services firms, buy, sell, and consume the core market data required to run their businesses, said Deborah Farrington, general partner at StarVest Partners.
Xignite directly accesses data in the exchanges and filters it as needed for a wide variety of clients, who can then access it from the web or mobile devices. Apps that access financial data are multiplying like weeds, but there’s no easy way to feed the data directly from the stock markets to the apps themselves.
“There’s a change in the way people get their information,” York said. “The question is, how you get the data to the devices?”
The Xignite market data cloud platform makes the data available via the cloud, or web-connected data centers, as if it were a utility selling electricity. Businesses can buy the data online in an automated process and plug applications into the cloud within minutes. They simply plug into Xignite’s applications programming interfaces (APIs) and access data in a variety of forms. Xignite sells subscriptions to the data for as low as $600 a year and as high as $100,000 a year, depending on the data. The data are delivered in 5 milliseconds to 50 milliseconds.
The alternative to this kind of platform costs a lot of money. Businesses have to invest in custom computing infrastructure to take the firehose of data that is sold by the exchanges, then they have to do the programming necessary to access the data and present it to users in an understandable format. Rivals include Thomson Reuters, Bloomberg, and custom financial houses. Xignite believes it can cut costs 90 percent compared to custom coding options, and it can produce results in two days, compared to six months for custom coding.
Xignite can also lower costs for big banks and other financial companies. Businesses can put their market data onto the XigniteOnDemand private label platform. That way, they can get their data in the hands of almost anyone around the globe. Participants include CME Group, BGCantor, Pearson and Nasdaq OMX.
Stephane Dubois, chief executive of Xignite, worked on an idea for a business for a while and then switched to the current manifestation of Xignite in 2005. The company previously raised a $5 million round. Demand really took off around 2008, York said.
Now it has 900 clients in 47 countries. Those clients access a piece of data more than 5 billion times per month. Customers include Citi, GE, Wells Fargo, ING, BNY Mellon, Natixis, Forbes.com, SeekingAlpha, ExxonMobil, Starbucks, Netsuite, and Barrick Gold.
Xignite has 30 employees and hopes to double that number in the next year or two.