Boerse invests in Trumid platform

German exchange operator Deutsche Boerse Group has made a $10m investment in Trumid, a New York-based financial technology start-up that runs an electronic corporate bondtrading platform, the companies announced on Monday.

Trumid, which is backed by venture capitalist Peter Thiel and investor George Soros, will collaborate with Deutsche Boerse to develop products and services for the European market.

Deutsche Boerse’s investment is an add-on to $28m raised by Trumid earlier in 2017 from investors including Chinese financial firm CreditEase.

Founded in 2014, Trumid is one of a spate of electronic bond-trading platforms that have been set up in recent years to help ease a liquidity crunch in fixed-income markets.

Stricter capital requirements imposed in the wake of the 2008 financial crisis have made it more expensive for banks to act as market makers in corporate bonds, making it harder for asset managers to trade.

Trumid, which acquired competitor Electronifie earlier in 2017, hopes to facilitate trading by enabling asset managers and brokers to transact directly and anonymously with one another on its platform. The company plans to expand into Europe to extend its offering to its 350 institutional clients.

“There are imminent catalysts for the increased adoption of electronic trading in Europe,” Mike Sobel, Trumid’s president, said. To enter the European market in partnership with Deutsche Boerse was a great opportunity, he said.

This is not the first time that Deutsche Boerse has taken an equity stake in a fixed-income trading start-up, having backed London-based Bondcube in 2014. Bondcube filed for liquidation in July 2015, three months after its launch.

Trumid had proved it could “create a new transparent, electronic and efficient credit and bond market place in the US”, Deutsche Boerse board member Hauke Stars said.