OpenGamma Raises $6M Financing, Preps Launch

UK-based open-source analytics and risk management software provider OpenGamma is preparing to launch its platform around the end of the first quarter of this year, and to expand its commercial operations using funds raised in a Series B round of financing completed last month.

The start-up vendor raised a total of $6 million from New York City-based venture capital firm FirstMark Capital and existing investor Accel Partners, according to a Form-D filing with the Securities and Exchange Commission. As a result of the funding, Lawrence Lenihan, founder and managing director of FirstMark Capital, has joined OpenGamma’s board of directors.

The vendor currently employs 12 staff, and OpenGamma founder and chief executive Kirk Wylie says he will use the additional funds to double that number over 2011, mainly with new hires in sales and marketing. As OpenGamma prepares to roll out general availability of its platform in late Q1 or early Q2, it will also use the capital to establish a New York presence that will include pre- and post-sales operations and support, Wylie adds.

The OpenGamma Platform includes an analytics engine, analytics library, market data management, a time-series database for market data, as well as a batch risk data warehouse, which front-office and risk application developers at banks and hedge funds can use to build bespoke risk and analytics applications. “Every component of the OpenGamma platform is customizable, replaceable and independently usable,” Wylie says.

To support calculation of VWAP, yield curves and historical Value at Risk, the platform currently integrates with Bloomberg’s Server API, Thomson Reuters’ Enterprise Platform for Real Time (formerly the Reuters Market Data System) and Activ Financial’s API, and OpenGamma is in the process of connecting to data from Interactive Data. The platform also includes time-series tick storage to enable batch risk calculations and strategy back-testing.

The vendor has installed a beta version of the platform at an unnamed UK-based hedge fund, and will later this month install it for beta testing at a broker-dealer in Connecticut, whose treasury trading desk is looking to build an automated trading infrastructure to support increasing trading volumes, and is planning to use the OpenGamma Platform as the basis for a custom market-making front-end.

Wylie says the platform may appeal most to second- and third-tier banks and quantitative hedge funds, as well as banks consolidating trading desks. For example, if a bank is merging its swaps and bonds desks, which use third-party and proprietary trading platforms, respectively, the bank can run OpenGamma on top of the two systems to provide the newly merged desk with an aggregated view of exposure and risk, Wylie says.

In addition, having an underlying open-source library in place across multiple systems means that firms can be more agile in reassigning IT and development staff between departments as they realign or consolidate businesses, as people will be able to be immediately productive without having to learn new proprietary languages, Wylie says.