Deutsche Börse to invest in 'financial technology' start-ups

Illuminate Financial Management bags big-name investors for early stage fintech investment fund

With the "financial technology" start-up sector hotting up, Deutsche Börse and financial information services provider Markit have announced plans to invest in an investment fund targeting the sector.

The German stock market operator and Markit are investing an undisclosed amount in Illuminate Financial Management's Fintech Opportunities Fund, in a funding round they are co-leading.

"The new fund focuses on fintech companies in areas such as compliance, regulation and connectivity, among others, which fits into Deutsche Börse's growth strategy to extend its service portfolio," said Andreas Preuss, deputy CEO of Deutsche Börse.

He added: "Partnering with Illuminate allows us to engage and leverage early stage opportunities that will influence the changing market landscape."

Major organisations such as Deutsche Börse are keen to invest in early-stage fintech companies as the combination of cloud computing, open source and the internet is starting to break open the sector. While well-known relative newcomers, such as Metro Bank and PayPal, are starting to take on the established big banks, there are also a plethora of new companies looking to challenge the status quo in all areas of financial services.

Bitcoin and Blockchain, the technology that underlies the bitcoin concept, have also highlighted the potential for technology to severely disrupt the financial services industry.

Illuminate was founded by financial services industry veteran Mark Beeston in February 2014 after four years at ICAP where he was CEO for the organisation's post-trade risk business. In that role, he was responsible for industry platforms, such as Reset, ReMatch and TriOptima. His career began at Deutsche Bank where his roles included chief operating officer for Global Credit Trading.

Illuminate has already either invested or is advising in a number of start-ups in the sector, including:

• Duco, an artificial intelligence start-up that claims it can match hundreds of thousands of trades within seconds;
• OpenGamma, a real-time market-risk management and analytics platform provider;
• Enso, a provider of analytics tools to hedge funds;
• Droit, which develops messaging-based trading decision engines based on Java; and,
• CloudMargin, a cloud-based buy-side services provider.