The investment arm of the World Bank has backed a Wall Street startup working to cut a major risk for banks’ trading desks.
The International Finance Corp., a member of the World Bank Group, is investing $3 million into LMRKTS LLC, a New York startup founding in 2012 by ex-traders to help banks to slash their financial exposure to each other, according to the companies.
The project, which focuses on currency trading for emerging-market banks, is part of a recent surge of investment into startups aiming to offer tools, using data mining and other new “quant” techniques, to help manage the cost and complexity of trading. That cost has hampered banks’ trading revenue since the financial crisis.
But unlike the Silicon Valley venture-capital money pouring into consumer-facing “fintech” startups, most of the funding for these firms is coming from bankers or other parts of the existing financial system.
The World Bank’s IFC often backs startups that it believes can help emerging markets develop their financial systems, including their exchanges, banks, and capital markets.Read full article