THE FUTURE OF TRADING
AlgoTrader’s is empowering banks and other financial institutions around the world. With its new crypto-solution WIRESWARM, the scaleup is taking another step towards the future of trading.
The future of trading is tokenised. Andy Flury makes the argument that banks and traders are increasingly realising the benefits of using cryptocurrency and the blockchain technology powering it. If they haven’t already launched projects trying to leverage the technology, then they are either working on it or thinking about doing so. Flury is convinced that this is only the beginning. “We believe that a few years from now, every type of asset will be tokenised,” he says. “Be it company shares, real estate or even art. When that happens, the difference between traditional assets and crypto assets will have vanished.” Flury should know. As the founder and CEO of WealthTech scaleup AlgoTrader, he has spent the past decade at the forefront of the trading tech revolution. Now, with AlgoTrader having raised a $3.8m Series A round and launched WIRESWARM, a new crypto finance focused advanced digital asset order- and execution management platform, Flury is doing his bit to bring about the future of finance.
He already noticed where the wind was blowing in the second half of the noughties when he clocked up time at Siemens as a project leader in the tech company’s Swiss branch. Particularly, his job saw him building solutions for the Swiss intelligence agency. “They were kind of dealing with big data before the term big data was even established,” Flury remembers. Having been involved with several trading-related projects throughout his career, he realised that a lot of the solutions used by the Swiss agency could be adapted to the financial markets. “This sparked the idea of building an automated trading system that eventually led to the development of AlgoTrader,” Flury continues. Yet, it wasn’t until he started working for Linard Capital AG, the Swiss hedge fund, in 2009 that he started setting things in motion to realise the idea. “Back then, we were looking for a software that would allow us to do development, back testing and live trading of quantitative trading strategies,” Flury recalls. “We surveyed the market, we looked at available vendors and nothing existed that met our complex requirements. So we decided to create our own bespoke platform. That’s how it started.”
In 2014, he and a group of engineers spun out the project from Linard Capital AG and launched AlgoTrader as an independent startup. “We were a small team of just three people and now we’re about 35,” he says. That team, small as it was, created the foundation for the scaleup. Today, AlgoTrader provides an algorithmic trading software solution for trading firms like banks, hedge funds, prop trading firms, crypto trading companies and other brokers. It allows automation of complex quantitative trading strategies in traditional assets and supports equities, derivatives, forex, but also cryptocurrencies and digital assets.“ It basically provides everything a typical trading firm needs on a daily basis to run their operation,” Flury says. “It’s an end-to-end solution from analysis, research, backtesting, live trading, reporting, reconciliation and so forth.” Today, AlgoTrader has about 60 customers around the globe.
Part of the company’s success can be attributed to AlgoTrader continuous commitment to keep innovating. “The financial markets are extremely complex these days,” Flury says. “Every asset class and every market has its own unique challenges. In addition, every trading company has a unique methodology and, therefore, very unique requirements. So providing a system that covers all these different aspects whilst being user friendly, you know is very complicated. That’s far from a trivial exercise.” That means adding and removing features, refactoring key parts of the system to make it as optimal as possible. “For example, we refactored a lot of the parts in the areas of low latency processing or the entire persistence framework,” he continues. This commitment to innovation enabled AlgoTrader and its new crypto finance product WIRESWARM to attract customers around the world, including several crypto-trading companies such as one of the first two regulated crypto banks globally. “That was a huge milestone,” Flury says.
In turn, signing up clients like these led the scaleup to introduce its latest product: WIRESWARM. “Over the last few months, it has become apparent that our system arbitrator is actually a perfect fit for banks,” he argues, suggesting that WIRESWARM provides a great solution for banks looking to trade and store digital assets.
However, when banks approached AlgoTrader, which could provide the solution they were looking for, they were sometimes confused by the name as they were not looking for an Algo-trading solution but for a digital asset trading one. “So we figured that it was better to have a dedicated offering for that, for that market,” Flury says.
The result was WIRESWARM. “AlgoTrader is mostly targeting the buy-side so hedge funds, prop shops [and] family offices while WIRESWARM is the new crypto finance product targeting the sell side, in particular targeting banks,” Flury explains.
To do that, WIRESWARM contains all of the key features that banks need to minimise risks, accelerate time-to-market and reduce costs and increase revenues at the same time as they are also meeting stringent regulatory requirements within the digital asset space. This includes access to most of the liquid and regulated trading venues like crypto exchanges. It also provides access to execution algorithms and the ability to execute large orders in a market where crypto liquidity is very fragmented. “So if you want to execute a big order, you can’t just send that to a single exchange. You need to split that and send it to multiple exchanges,” says Flury. “And that’s what our execution algorithms do. We have things like a smart order router that will automatically route and order to the venue with the best liquidity and best price at that time.”
The clients and investors that have tried WIRESWARM following the soft launch earlier in 2020 have enjoyed the service. While Flury notes that it is too early to draw any conclusions about how successful WIRESWARM will be, he is feeling bullish nonetheless. “We are very confident that we’re solving one of the most relevant problems within the emerging digital asset trading industry,” he says, adding that all insights AlgoTrader has gained since onboarding its first crypto and digital asset clients in 2017 have been incorporated into WIRESWARM. “Together with our investors, we are convinced that with WIRESWARM we’ve built one of the most powerful digital asset trading and execution platforms in the market,” he says. Another reason for Flury to feel confident is the fact that AlgoTrader closed a $3.8m Series A investment round at the tail end of 2019. The capital injection was led by an undisclosed global tier 1 bank.
Venture capital firms investiere, BlockChain Valley Ventures and NeueCapital Partners also participated in the raise. “We’re primarily using the new capital for the launch of the new product WIRESWARM and also for the expansion of our global sales team,” Flury says. “We now have main offices in Zurich with a sales office in New York, and a sales office in Singapore.”
And that’s not the only exciting prospect on the horizon for AlgoTrader. “You can’t conquer the market on your own so we strongly believe in partnerships,” says Flury. “So we’ll be announcing additional partnerships throughout the next few months.” As we said, this is only the beginning.
WIRESWARM’s institutional-grade infrastructure provides a robust mission-critical gateway for trading and execution of digital assets. It enables banks, brokers, OTC desks and market makers to connect to and interact seamlessly with the world’s most liquid and regulated digital asset and cryptocurrency trading and execution venues.
For more information on WIRESWARM go to wireswarm.net