AxeTrading completes Series A with World Bank investment

By Sunniva Kolostyak

Global fixed income trading software firm AxeTrading has closed a significant Series A funding round, led by the International Finance Corporation (IFC), part of the World Bank Group, alongside Sumscope and SixThirty.

The funding will enable AxeTrading to accelerate and broaden its existing technology roadmap and expand on the exchange technology platform, Mark Watters, Co-Founder and Director of AxeTrading, told IBS Intelligence.

In an interview, Watters explained that due to its fixed income execution management service AxeTrader, the software provider is uniquely positioned to empower banks, buy-side firms, agency brokers and trading venues to maximise strategies.

The platform runs on the latest Java-based technology platform, in particular the Kafka framework, to automate and integrate workflows in highly performance optimised fixed income trading desks.

“Innovations in AxeTrader are driven by both client insight and strategic features that will further set AxeTrading ahead of the competition. Specifically, AxeTrading will complete implementation of a new Kafka-based architecture that will among others enable AxeTrading to deliver a more advanced rules-engine for improved customer-controlled workflow automation, including hedging. New market integrations led by customer demand, new workflows and new APIs for wider integration are also on our roadmap,” Watters said.

The platform uses open architecture and interoperability to give traders seamless control of their workflow with aggregated liquidity, multiple pricing feeds, powerful client servicing and execution capability across voice and electronic trading.

“Some other platforms look to constrain and create a walled garden forcing users to be dependent on a limited range of options. We free them to make best use of their existing systems, diverse trading venues and the latest augmented data. The technology is robust, flexible and easy to deploy so as users evolve AxeTrading adapts. Clients profit from this efficient, modular and cost-effective system that adds value at every stage of the trade when others can’t. It is SaaS that can be deployed on-premise or in the cloud through AWS.”

The director noted that the Covid-19 crisis has in fact significantly accelerated a rapid growth in the uptake of fixed income electronic trading, which is AxeTrading’s core market. Moreover, the need to work from home has forced financial institutions to implement wider use of digital systems instead of traditional or voice-trading type workflows.

This, in turn, has translated into sharp increases in electronic trading volumes in fixed income.

Watters explained: “Some of the leading lights of the investment management community are embracing e-trading in their markets rather than using voice and other traditional trading mechanisms, mainly because they can just get more done that way in the current environment. As a result the dealers have also adapted; the kind of technologies that they’re using is changing.

“More automation is one way dealers are handling this increased electronic trading activity which is part of an ongoing, long-term trend. Ultimately, you’re going to need the right tools if you’re going to face this changing market structure. This is fuelling further demand for AxeTrading’s software and expertise around the globe, particularly in Europe and North America.”

Working with IFC as a strategic partner, AxeTrading will deliver scalable technology for dealers and trading venues to develop and accelerate the evolution of fixed income markets to broaden participation, which will provide liquidity and market transparency.

Andi Dervishi, Global Head of FinTech Investments at IFC, added: “We see a capital-markets future where most or all fixed income securities are traded electronically, enhancing price discovery, market transparency and liquidity. AxeTrading makes access to those markets feasible and simple for small and large participants alike. This matters even more in emerging markets, where participants tend to be small and young and unable to develop their own trading software and tools.”