WeMatch: Why We Invested

Capital markets: an overlooked area of fintech where innovation becomes mandatory

By Reginald de Wasseige, Investor at Augmentum Fintech

For the past couple of years, every segment of fintech has been impacted by technology, with opportunities for disruption and competitive advantage becoming far easier to leverage. Capital markets has been somewhat shielded however, with higher barriers to entry which has made disruption by new entrants and external providers less likely. As a result, innovation has lagged far behind, and the sector has overall attracted — relatively to other fintech verticals — little VC investment.

Over time however, financial institutions have come to realise that innovation is no longer an option, but an absolute imperative for them to survive and thrive in the future. In the current challenging environment, banks need to reduce their cost base and focus on freeing up capital, while maintaining service standards and competitive advantage. As a result, we see the landscape evolving rapidly as firms are seeking to accelerate the introduction of digital and automated services that will enable them to maintain pace and leadership in a competitive environment. This trend has most certainly been accelerated by Covid.

Fig. 1 Where Goldman Sachs, Citigroup and JP Morgan are investing in fintech. CB Insights

Collaboration is the way forward - the value is in the ecosystem enabling liquidity

The concept of partnerships between financial institutions and fintechs, and between financial institutions themselves has already taken off. Banks are demonstrating that they also have the collaboration gene. In capital markets (especially in the trading space), we see this as an absolute imperative to build a solid ecosystem especially as liquidity is the name of the game. Newcomers in the space that are able to drive volume (and therefore trading opportunities and liquidity) while improving trading efficiency will be tomorrow’s winners.

Announcing our investment in WeMatch, a web-based matching and negotiation tool across multiple asset classes

Enter WeMatch, who are shaking up the market, bringing various industry participants on one platform and applying robust technology to do so. WeMatch helps traders find liquidity, negotiate, trade, optimise and manage the lifecycle of their portfolios of assets and trade structures. Their platform helps financial institutions transition liquidity from a market that has traditionally been served via voice broking (ie. OTC market) to an orderly electronic service, improving productivity, de-risking the overall trading process while operating at a fraction of the costs of conventional Inter-Dealer Brokers (IDBs).

WeMatch serves 30+ of the world’s largest financial institutions on multiple asset classes, namely: interest rate swaps, securities financing and equity derivatives. They enable traders both in EMEA and the US, where they went live in late 2020.

The company has a very strong team in place, composed of seasoned industry professionals. We are delighted to be supporting Joseph Seroussi (Co-Founder & CEO), David Raccat (Co-Founder & Head of EMEA) and the wider team in their next phase of growth.

We are excited to join WeMatch’s $19.4 million Series B, led by DB1 Ventures, the corporate venture arm of Deutsche Börse, with participation of Illuminate Financial as well as existing investor JP Morgan.

Learn more about investing in fintech with Augmentum here.

Important Information
This financial promotion is issued by Augmentum Fintech Management Limited which is authorised and regulated by the Financial Conduct Authority under Firm Reference Number: 811734. Augmentum Fintech Management Limited is appointed as manager to Augmentum Fintech plc. This financial promotion is for information purposes only and nothing contained in this financial promotion constitutes investment advice. This financial promotion is intended for professional investors and for retail investors who have sufficient knowledge and experience of UK listed investment trust companies. If you as a retail investor are uncertain whether an investment is suitable for you, you should seek advice from a regulated financial adviser. The value of investments, and any income from them, can fall as well as rise and you may not get back the amount invested. Reference to “Augmentum” or “Augmentum Fintech” refers to “Augmentum Fintech Management Limited” unless otherwise stated. Reference to the “Company” refers to Augmentum Fintech plc. Reference to “we”, “our” and “The Augmentum Team” refers to employees, consultants or advisors of/to “Augmentum Fintech Management Limited”.

Augmentum Fintech is the UK’s only publicly listed investment company focusing on the European fintech sector.