NewSpring Holdings and QUODD featured in Water's Technology
March 09, 2023
This article was originally published by Waters Technology
Quodd’s recent acquisition of API data vendor Xignite will provide a springboard to launch the data vendor into new customer segments and markets.
The world of market data vendors is like a patchwork quilt: On one side, there may be only a few large patches of cloth taking up most of the space. But on the other, there may be hundreds of tiny swatches of fabric competing for space. For every Bloomberg or Refinitiv, there are dozens—if not more—of smaller vendors trying to stand out and break beyond their own niche.
One of these companies is Quodd, a New Jersey-based provider of data workstations and datafeeds. You may not have heard of Quodd (not to be confused with Quod Financial, the multi-asset OMS and EMS provider), but you’ve certainly heard of the people behind it: CEO Bob Ward was previously COO of SunGard Transaction Network and SunGard Wealth Management; board member Jim Ashton, general partner at Quodd’s financial backer NewSpring Holdings, was division CEO of SunGard Financial Systems and previously group CEO of its treasury, trading and risk group; while another board member is former Nasdaq CEO and chairman Bob Greifeld, who also served at SunGard earlier in his career.
For many years, Quodd competed as a low-cost data terminal provider against the likes of Thomson Financial (Thomson even sued the vendor at one point, claiming its workstation too closely resembled the Thomson One display) and Money.net, winning clients among stockbrokers, wealth managers. That changed at the end of 2018, when NewSpring-owned Financeware bought Quodd and combined the vendor with its VMS US mutual fund data business. Ward, who joined the company as chief revenue officer in 2018, took over as CEO in 2020, and the vendor launched its Universal Data pricing and reference data service, and the Universe+ pricing portal.
The next big step in the company’s growth strategy took place on February 15, when it acquired San Mateo, Calif.-based Xignite, a provider of API- based datasets, for an undisclosed sum. Xignite CEO Stephane Dubois will run product across the combined company.
One driver behind the acquisition was the ability to expand the breadth of data it could provide to clients.
“They have hundreds of APIs and thousands of data points that we didn’t have access to before,” especially historical data and commodities data, Ward says. “And they have a different set of clients, including some that serve more of the retail space, so it extends our reach to different segments of the market.”
But another reason is the ability to integrate Xignite’s technology to support Quodd’s aims of delivering data on demand.
“One of the strategic things about Xignite and Quodd coming together is technology. We have very similar tech stacks, and … we’ve both created very scalable infrastructures that can absorb additional content and clients,” Ward says. “The plan is to integrate the tech stacks and create a best-of- breed tech stack between the two companies. And both are cloud-enabled, so … we will leverage that and consolidate our cloud presence. The key is to get the technology in line to allow clients to select only the content they need at the frequency they need, and only pay for what they need.”
Not ‘if’ but ‘when’
Ward says the vendors already shared mutual clients, adding that in the few days since the acquisition, Quodd has already received interest from wealth management and bank trust departments, as well as a handful of hedge funds with back-office and research departments that could benefit from the vendor’s combined real-time and end-of-day data. As a result of the interest from this new market segment, Ward says he plans to hire dedicated sales and marketing resources to target potential hedge fund clients.
Another initiative that the acquisition could help accelerate is expansion into international markets, both by bringing more international content into its data products, and by selling products overseas. Xignite already has an office in China, and Quodd is starting to work with clients and partners to distribute its products into overseas markets.
“Expansion globally isn’t a matter of ‘if,’ but ‘when,’ based on demand for our products,” Ward says.
Partnerships with other third parties may also open up the possibility of further acquisitions in the future. “The way I always look at acquisitions is that you need datasets, and most acquisitions start with partnerships,” Ward says. “We look to partner with a lot of different data vendors, and
some of those partnerships may evolve to the stage where an acquisition makes sense.”
Ashton says he sees acquisitions as being an opportunistic way to accelerate existing growth efforts, and he sees NewSpring’s role as an investor as helping to accelerate growth—whether by providing funding for further acquisitions or helping to recruit talent.
Quodd’s management and board have plenty of experience integrating acquisitions from their days at SunGard, which itself grew into a fintech giant as the result of many acquisitions. However, Ashton says Quodd isn’t trying to recreate a mini-SunGard, but if the company does make further acquisitions, it will bring a “SunGard management DNA” to that process.