Overview
Trumid is a fintech company that offers efficient access to modern credit trading via a combination of data, technology, and innovation in its product designs.
The company, headquartered in New York City, United States, was founded on Jun 4, 2014, by Ronnie Mateo, the Founder and Chief Executive Officer (CEO) who has over 20 years of experience in the credit market.
In November 2014, this organization was granted a license as a broker-dealer listed with the US Securities and Exchange Commission, the so-called SEC. It is also a member of the Financial Industry Regulatory Authority, known as FINRA.
Company Profile
| Company Name | Trumid Financial LLC |
| Headquarter | New York, United States |
| Website | https://www.trumid.com |
| Industry | Fintech |
| Founded | 2014 |
| Founder & CEO | Ronnie Mateo |
| Lead | T. Rowe Price, Dragoneer Investment Group |
| Key People | Michael Sobel- President, Daniel Siracuse- Chief Financial Officer & Chief Operating Officer, Jason Quinn- Chief Product Officer, Mutisya Ndunda- Head of Platform AI and Data Strategy, Anthony Schiavo- Chief Technology Officer, Lauren Burd- Head of Client: Jason Quinn. |
| Company Revenue (Est) | $13.5M Per Year |
| Key Competitors | Liquidnet, Tradeweb, MarketAxess |
| Investor(s) | BlackRock |
What is Trumid? A Brief History
Trumid is a platform created to build efficiency, liquidity, and transparency in all trading performance. The company designs and launches its automatic trading stage for the US corporate bonds and treasury securities.
The company is a subsidiary that is wholly owned by the parent company named Trumid Holdings, LLC, where it firmly invests in global professionals to assure the company operates, complies, and capitalizes the entire enterprise’s value through all of its subsidiaries according to their financial strategy.
How Does Trumid Work and What Does it Offer?
Trumid optimizes data and amplifies the validated system’s supremacy that creates a seamless workflow for all traders via its ground-breaking product ecosystems.
This fintech company has gathered enormous and various market traders on a larger scale, let alone the conventional trading implementation. For example, it has implemented its Market Center 2.0, stipulating traders an uninterrupted approach to liquidity.
On the business’s platform, more than 22,000 corporate bonds are open for traders to search for their demand. A user can place a bid or ask anonymously at an affordable price they deem fair. Indeed, the company will match the bid with any similar interest from interested contributors looking for a comparable price.
When there is a match, a data room will appear for the seller and buyer to negotiate their bond anonymously or openly under their names. Once both parties are good to go with an agreeable price, a trade execution will happen.
Trumid Business Model
Trumid’s business model thrives in its advanced technology to leverage data aggregation and intuitive product chains that offer the best experience to all sorts of credit trading. Below are the three leading business models invented by the company:
Data Science
The company uses data science as market intelligence for their products like:
- Data Center: This is a prevailing data visualization tool undergone Market Center 2.0
- Fair Value Model Price (FVMP): Bond pricing model based on real demand and simultaneous market data that are supremely accurate and objective.
- Likelihood to Trade (LTS): This model enhances machine learning integration to promote prospective liquidity, allowing users to control the bonds that are most likely to trade.
Revolution Technology
The venture syndicates profound corporate bond proficiency with data, high-end technology know-how, and UX principle to bring fixed-income trading a reality. One thing is for sure; the underlying concept is flexible, secure, and scalable.
Likewise, it has introduced Trubot from Eflector™ to drive anonymous and attributed negotiations. Not to mention that Trubot can transform details into natural language processing; this is unbelievable.
Automated Spotting
A trading world is mind-blowing because it spreads products within a split second. The institution’s electronic platform settles risky rates with Automated Spotting feature. Users can decide to spot now, spot later, or hedge treasuries on each trade they make.
Trumid Market Center 2.0 As The Unique Selling Propositions
Market Center 2.0 interface equips the agenda that includes protocol flexibility for credit traders to watch, match, negotiate and trade as much as they aspire.
First off, users might want to watch “what” and “who” they see the potential in, such as bonds, sectors, tickets, or even tags. At this point, they may have a look at main rivals too. This marketplace also uses IOI-based protocols to seizure and match the axes throughout their massive market networks.
Next, when a match manifests, a swarm activates among the unidentified members, leading to strong click-to-trade liquidity on sequential cycles. In addition, the attributed protocol traders will allow direct connection between traders to trade and negotiate anonymously or openly.
After all, the anonymous and attributed protocols facilitate superior execution and assist you in achieving the best trades deal ever.
How Does Trumid Make Money?
Trumid’s market center makes money by bringing trading proficiency and market intelligence for all credit professionals to broaden liquidity in corporate bond markets.
This electronic platform also authorizes a wide range of trading practices, and it gives excessive accessibilities to all related parties who want to invest in this business.
The enterprise has all it takes to get the work done to sustain its client demand. More importantly, its seamless workflows are one of the greatest forces for their monetary terms to prosper.
For instance, the company always comes up with distinctive schemes to incorporate all kinds of enterprises into their platform rapidly and effortlessly, including:
- FIX APIs or “Financial Information Exchange” is a framework that’s specifically designed for the electronic transfer of financial data. This method works for drop copy, order management, completely headless integration, and comprehensive market data.
- FDC3, also known as “Financial Desktop Connectivity and Collaboration Consortium,” builds provisions for consistent cooperation through FDC3 supported desktop applications in the finance industry.
According to PrivCo, Trumid’s post-money valuation is approximately worth $1B to $10B as of Aug 11, 2020. The truth is it has raised a total funding of $402.3M over 6 rounds. In brief, it is funded by 19 investors, and TPG and BlackRock are their most recent investors. In Aug 2020, it extended the latest funding from a Series E round.
Trumid SWOT Analysis
Strengths
Trumid has been recognized as a major player as a professional broker-dealer enterprise. The company chooses an Alternative Trading System (ATS) as their working method. Every trade occupied by the ATS will be anonymous and then shall be implemented, completed, and overseen by the State Street Global Markets, LLC (SSGM).
Besides, with corporate bonds service contribution, the ATS openly associates its potential sellers and buyers throughout an attributed trading procedure launched in 2019. Here are the company’s superlative tributes outshining their peers.
Fair Value Model Price (FVMP)
The Trumid Fair Value Model Price (FVMP) is an automated numerical price model that integrates actual market data to deliver accurate, statistical, and independent bond prices by using the art of mathematics. The model involuntarily stockpiles absolute levels with bid offers, confidence levels, and confidence intervals, recommending a concrete figure to the price of any particular bond.
FVMP has been restlessly used, in which it formulates the core algorithm, exposing it to perpetual inspection by many experts in the industry. This model compares published information from competitors, which provides highly accurate credits and fair market insight regarding corporate bonds.
Likelihood to Trade Score (LTS)
Trumid’s Likelihood to Trade Score (LTS) enhances machine learning to filter users’ watch lists. This model levels up the bonds with the highest hypothetical liquidity on the manifesto to the primary lists for traders. Therefore, traders surely don’t have to wait forever for liquidity.
The mechanics of LTS guide traders to pay attention to the bonds emphasized at their top watch list. Simply put, the active sorting of bonds under the platform will improve bond execution and generate superior execution rates by focusing on users’ responsiveness to the bonds with the supreme LTS.
The LTS is exceptional for its ability to obtain direct data from the dark pool to process the immediate liquidity of any bond. At the sector level, the LTS pinpoints both sector activity and general market reaction.
Weaknesses
The fact this corporation exhibits the new trade price to the market for the next trading cycle makes the public partially recall that this is an old-fashioned way of trading, in which pricing was such secrecy.
The dirty part is when the operators could transact at a lower price without informing counterparties in real-time. Plus, they could take advantage of people in the network and flip the bond to other participants who agree to pay at a fair market price.
In this case, relationships and information streams are overriding. The bond market price tends to be manipulated because there’s no persistent clearing price informed to participants in an unbiased manner.
Threats
Besides the need to keep up with or even outstep its key competitors like Liquidnet, Tradeweb, MarketAxess, the company is prone to another threat caused by its agent and clients don’t perform their obligations.
Threats happen because, in an agreement with its agents, the company will be responsible for any losses made by the error of the platform. Hence, the business will be oblique for this unfortunate consequence.
Furthermore, the company’s maximum coverage for these engagements is still not yet specified. This loophole would implicate future claims against the company that has not yet appeared. However, the company has so far not faced such issues yet.
Opportunities
Overall market share of Trumid is huge because of its constant product developments alongside evolving technology that produces corresponding supplies to complete client demands.
Approximately $761M worth of bonds is traded on the platform daily, $17B monthly, or a 325% increase yearly. Almost 500 companies have entered its business online platform to trade, ranging from the largest banks to debt traders everywhere, performing deals at $6M on average.
What’s more, this fintech’s anonymous and attributed trading protocols together have encountered a great number of user engagements, representing almost thousands of active users on the program.
This data showcases that the company will be able to assemble numerous opportunities, including building major collaborations with gigantic companies, exposing strategic industrial relationships, and expanding access to more liquidity for its clients worldwide.
All these good sakes will make this venture more valuable and leave a remarkable footprint in the trading network of emerging markets.