Vela Trading Technologies has been on an acquisition binge since rebranding from its former incarnations as SR Labs and Wombat Financial Software – at least, if you can call two a binge. Less than a month after buying OptionsCity, the fintech company that provided electronic options and futures trading, Vela has announced it will acquire Object Trading, a global direct market access provider located in London.
According to Vela’s CEO, Jennifer Nayar, Vela is very strong in the market data space but not as much in direct market access, and the Object Trading acquisition helps Vela to be a “much more full-service provider” to its clients, giving it the DMA piece of the puzzle as well as pre-trade risk and analytics capabilities and post trade reporting.
Object Trading was founded in 2000 by Steve Woodyatt and Bernard Orenstein. The acquisition is subject to regulatory approval and is expected to close in early Q3 2017, according to Vela.
The acquisition also helps the company’s clients reduce costs and comply with the newest regulatory requirements.
The OptionsCity acquisition gave Vela a front-end trading screen capability to trade futures and options and the infrastructure to leverage cloud technology, Nayar said, so the company can “tick all the boxes” – covering all asset classes.
In the current atmosphere in which global banks are being challenged by the costs of regulatory compliance, in particular with MiFID II, Vela is capitalizing on the current trend of banks outsourcing certain services so they can stick to their core competencies and core business.
“The ROI [return on investment] argument is very strong to move to an as-a-service model,” Nayar said.
Vela is not necessarily looking at other acquisitions at the moment, but it is concentrating on moving into the fixed income and foreign exchange space, she added, where there is a lot of demand.
The acquisitions also help Vela expand its reach globally, and OptionsCity’s products can now broaden into other asset classes powered by Vela’s market data, Nayar said. OptionsCity’s CEO, Hazem Dawani, will remain with Vela’s executive team as chief product officer.
The rebranding as Vela in June of last year enabled the acquisitions, she said, by sending a clear message to the marketplace on who they are as a company. Vela’s earliest incarnation was as Wombat Financial Software, founded in 1997. Wombat was later acquired by NYSE Technologies, and NYSE Technologies was acquired by SR Labs in 2014.
“Rebranding makes acquisitions easier for the street to understand,” Nayar said. “It was easier than folding [the acquisitions] into SR Labs and Wombat, and it gives our employees a common sense of identity and connects the dots of all the applications and systems in the whole trading ecosystem.”