Building a data bridge

Ambre Soubiran, Chief Executive Officer of Kaiko, talks to Shanny Basar on learning about blockchain, bridging the data gap between digital and traditional assets and raising a funding round while pregnant.

Ambre Soubiran is a rare Chief Executive Officer who closed a $53m funding round for her company and had her second child at almost the same time. Soubiran has been leading Kaiko since she bought the French digital asset market data provider in 2016.

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In 2012 Soubiran became fascinated with blockchain after finding the Bitcoin white paper on an obscure blog she was reading about maths, money and finance. She said: “I was really interested in blockchain because it represented a paradigm shift in how we decentralise and manage information.”

Soubiran had been working at HSBC since 2008 and drew parallels between bitcoin software and how banks process transactions. “When Ethereum came along, which is Bitcoin on steroids, you could send computer code and program transactions and money,” she added.

When Soubiran left HSBC in 2016 she originally wanted to start an investment fund to invest in blockchain-related companies and called Pascal Gauthier, the original founder of Kaiko, whom she had previously met. Gauthier was about to take the role of President at Ledger, a Paris-based company that develops security products to protect users of crypto and blockchain applications, so Soubiran acquired Kaiko and became CEO.

“When I acquired Kaiko it was mostly the database and code that was continuously fetching data from crypto exchanges, but there were no employees and no clients,” she said. “We were lucky because when we started it was the ICO [initial coin offering] years in crypto and the beginning of quantitative models that needed data.”

She described the early days of selling data as really archaic, with Kaiko even sending USB sticks to clients by post, but the company has since grown to a robust institutional-grade infrastructure. This was illustrated in June this year when Deutsche Börse said it would make Kaiko’s consolidated crypto data feed directly accessible to its customers.

Alireza Dorfard, Head of Market Data + Services at Deutsche Börse, said in a statement: “The crypto market faces high volatility and price fluctuations. Therefore, many of our clients have a high demand for consolidated data from centralised as well as decentralised exchanges to develop useful crypto investment strategies.”

Soubiran continued that the current market environment, with high volatility and the downturn in prices, has led to increased inbound leads because Kaiko targets institutions who are regulated and need high quality, reliable data.

Kaiko collects tick-level trade data for more than 150,000 instruments from over 100 venues for both spot and derivatives markets, covering about 96% of the tick-level trading data, including a majority of blockchain protocols such as Ethereum or Avalanche. Soubiran said: “Our partnership with Deutsche Börse allows us to broaden our reach as they have a huge distribution network.”

In addition to market data, Kaiko’s product suite also includes portfolio solutions, rates & indices, pricing services, DeFi (decentralised finance) data, and research covering digital assets.

“We have data on billions of trades per day, and hundreds of thousands of crypto pairs, and the question is how we can add more value,” adds Soubiran. “We created analytics to highlight trading signals, trading optimisation and strategies but reference data is also critical.”

There is no close in the crypto market, which trades 24/7 every day, so Kaiko has built methodologies to provide reference rates to the industry. This increases the breadth and depth of the data Kaiko provides while staying in the data feed business.

“One thing we are not doing is entering the terminal business, although we power a lot of the big terminals out there,” added Soubiran. “We are going to stay focused on the data feed business.”

In addition to Deutsche Börse, institutional clients include ICE Global Network, Bloomberg, and some of the largest asset managers and investment banks in North America and Europe. Kaiko also provides data feeds for crypto market participants including Ledger, Paxos and the Pyth network, a Jump Trading initiative.

Growth ambitions

In June this year Kaiko raised $53m in a Series B funding round led by venture capitalist Eight Roads, with participation from Revaia and existing investors Alven, Point9, Anthemis, and Underscore.

Alston Zecha, Partner at Eight Roads, said in a statement: “Kaiko’s deep expertise from both traditional finance and crypto-native institutions helps them to bridge these two worlds better than any other firm in the digital asset industry. Their fast-expanding roster of Tier 1 clients is truly impressive, and we look forward to supporting their continuing global expansion.”

The funding will be used to grow operations globally as Kaiko already has offices in Paris, London, New York and Singapore.

“Given the current economic context we are very focused on extending our runway and making sure we are very cost conscious,” added Soubiran.

The firm plans to make about 20 more hires planned in the next quarter, which will increase staff to approximately 100 people by the end of this year.

Kaiko has raised three rounds of funding and Soubiran said she has been pitching the same vision since back in the early days when she thought tokenisation and the transformation of finance would happen in two or three years. She compared progress to that of mobile apps which took 10 years from the first pitches to adoption.

“It is a question of how much time it will take to get there, rather than if we get there,” added Soubiran. “However, we have seen giant steps in terms of institutionalisation of the crypto space.”

For example, she said there is not a single bank today without a digital asset team – which signals adoption, understanding and willingness. The next phase of the adoption curve is more mainstream application-based usage. “The first block of bitcoin was in 2009 so the technology is not that old,” she says.

M&A deals

Soubiran is also keeping an eye on using the funds for more potential M&A deals. Over the past year, Kaiko has announced the acquisition of Kesitys, a provider of quantitative decision tools for risk optimisation, and in June also agreed to buy Napoleon Index from CoinShares, the European digital asset investment firm.

The latter facilitated the launch of Kaiko Indices, which has been licensed under the Benchmarks Regulation by Autorité des marchés financiers (AMF), the French financial regulator. Kaiko Indices is led by Alexandre Ruggeri, who previously managed IHS Markit’s equity index initiative, and also worked in index development at STOXX

“I have made two acquisitions this year that have significantly accelerated our product roadmap and talent acquisition as we inherited absolutely brilliant colleagues,” added Soubiran. “In the current context, some companies have brilliant team members but maybe less capacity to raise funds for growth.”

Soubiran said she is still very much at the beginning of where she wants to take Kaiko as a business of enabling financial applications and being the trusted third party for data. Kaiko has the ability to read from blocks and contextualise information for any industry. The other way round, Kaiko can take any information and bring that on a chain to be used in smart contracts and execute code in a disintermediated fashion.

“Once  you disintermediate a system, the quality of the code and the data you input becomes increasingly critical assets,” Soubiran added.

Her ambition is that in a decade Kaiko will be a big, publicly listed company that is enabling all blockchain-based financial contracts, regardless of the industry.

Soubiran says, “The plan is for Kaiko to be a trusted third party that is the bridge for data between blockchain and traditional financial systems.”

Career

Since childhood Soubiran has always been very interested in technology, computer science and maths. As a result, she went into finance because back then in France, if you studied maths, that was the obvious thing to do.

“I chose derivatives trading which was exotic and innovative but during this time, I stayed interested in disruptive technologies,” she says.

While in banking, Soubiran was stuck on the trading floor from 7am to late at night. She described the startup world as equally intense, but in a very different way, because if you need to take a break, you can just work harder at a different time of the day.

“What I like about my current life is having control and flexibility over when you work hard, how you work hard and most importantly, who you work with, which for me is the biggest luxury,” she adds..

Most startups today have a strong focus on balancing mental health and family according to Soubiran, and at Kaiko about half of the employees have children. Her advice to women who want to work in crypto is to put in the effort and learn about the technology. Soubiran took some online courses, MOOCs, on computer science and she said there are a lot of resources that will help you spend a few hours a day focused on understanding blockchain.

“They should give it a try and interact with smart contracts, interact with a blockchain, and see how that feels,” she added. “Once you’ve done a bit of academia and actual practice, it’s not that hard.”

She also feels that the crypto space is largely more open and diverse as blockchain was spun out of a mindset of empowering individuals leading to more tolerance and respect with regards to gender, nationality or religion. “There are a bunch of outliers in crypto and everybody is fine with that,” Soubiran says.

She continued that she doesn’t only look at diversity through the spectrum of gender. Kaiko has around 60 people and 14 nationalities and she is very proud that everybody speaks English, which she said is pretty rare for a French startup based in Paris.

“There are a few people that don’t speak French and you are not supposed to speak French in front of people who don’t understand what you say,” she added. “All these things are important for inclusion so that everybody feels part of the company,”

Kaiko’s executive team is 50% women, which Soubiran said was absolutely not about trying to meet a quota, but just because incredible candidates came her way.”

“I believe the company is nothing more than the sum of all the parts so building the company is really thanks to everybody working hard,” Soubiran says. “My dream is that we are the kind of company that every single recruiter wants to poach from because everybody is so good, but also where nobody wants to leave. That will be real success.”

©Markets Media Europe 2022

 

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