Markets Media Feature: Beacon Platform Gains Traction
From a business idea hashed out over beers, to a $20 million capital raise.
Beacon Platform has come a long way in seven years, since one-time Goldman Sachs colleagues Kirat Singh and Mark Higgins met at Connolly’s Pub in midtown Manhattan in 2013 to brainstorm how capital markets firms can harness and deploy quantitative-trading technology most effectively.
Specifically, the idea was for a next-gen, cloud-based technology platform that would enable asset managers, banks and hedge funds to securely build, test and deploy analytics at enterprise scale. This would provide firms of all sizes the same tech firepower as the largest institutions, which in turn would create a stronger and more innovative financial ecosystem.
In January, Beacon closed a Series B funding round, proceeds from which will go toward expanding operations and product development, spanning the firm’s platform to its suite of financial analytics and data models to its trading and risk management application solutions.
“Our vision is to create an ecosystem where Beacon provides the backbone, and clients and vendors can share solutions,” Singh, Beacon’s CEO, said. “Just like Apple created an AppStore and the iPhone as a common delivery platform and transformed what’s possible in the mobile industry.”
Beacon’s co-founders have deep Wall Street / fintech backgrounds. At Goldman, Singh enhanced and extended SecDB, the core framework for the bank’s proprietary trading engine; at JP Morgan, his team designed and built a risk and trading system for FX and commodities. Higgins, Beacon’s COO, co-headed quantitative research for JP Morgan’s investment bank and ran FX and rates strategies teams at Goldman.
Singh and Higgins noticed something lacking on the technology landscape as far back as the late 1990s, when they worked together on the trading desk at Goldman and had regular dealings with third-party software providers and their products.
“Most vendors in capital markets were black boxes and siloed, so institutions ended up with a patchwork of solutions. Our vision was to create an open, transparent platform to provide integrated solutions,” Singh said. “In today’s world, financial institutions can leverage the ecosystem of open source and cloud infrastructure as a service. Beacon accelerates this transition and enables collaboration and innovation across business lines.”
Since launching in 2015, Beacon has landed Global Atlantic Financial Group and Pimco as enterprise clients, as well as Commonwealth Bank of Australia, SMBC Capital Markets and Shell New Energies. Pimco and Barclays are among Beacon’s institutional investors.
Singh said Beacon is seeing a network effect, where firms’ presence on the technology platform boosts the value proposition for new customers. “We are focused on growing this ecosystem,” he said. “Whether you are buy side or sell side, you can use Beacon to be operationally more efficient, to understand your risk better, and to enable your quants to focus on business problems.”
In a crowded and competitive space, Beacon Platform has emphasized differentiation from the outset. “Beacon is the only vendor on the market that gives clients underlying source code, a developer platform, and infrastructure services, so they can own the full technology stack,” Singh said. “Beacon’s software has been designed to provide a significant uplift in developer productivity and reduce time-to-value.”
Beacon’s open-source model obviates companies’ need to build and maintain their own platforms, effectively ‘future-proofing’ their technology. Higgins noted that developers, quants, and data scientists are typically good at solving the business problems in front of them, but less adept at the enterprise technology skills needed to make those solutions scale and evolve with the business for years into the future.
“How do you organize data at scale, and how do you build technology to last for decades?” Higgins said. “Commercial developer teams typically aren’t as familiar with enterprise technology. Beacon is designed to give technology tools to commercial developer teams so they can solve problems for their business quickly, and solve them in a maintainable and scalable way.”
As for its own future, Beacon is accelerating its expansion, with the help of the recent funding round, which was led by Centana Growth Partners. “The Series B funding will help us further realize our vision and scale it industry-wide,” Singh said. “We will continue to make it easy for our clients to use different cloud vendors, we will extend our suite of cross-asset financial instruments and markets, and we will give our clients even more tools to self-service their Beacon environments.”