ORIGIN: 2017 Year-to-date Progress Update
In recent weeks we’ve explored a diverse collection of topics, ranging from the history of modern banking to the cutting edge complexities of Blockchain and cryptocurrencies. If there is one theme that binds together all of our commentary, it’s progress.
This week, we’re pausing to reflect on our own progress as a company. We’ve had users testing the system from August last year, but we officially launched our proof of concept on 9th January 2017. After 5 months of testing, feedback, and iteration, Origin went live to the world on 1st June 2017. It’s been a busy, productive and immensely rewarding year so far for everyone here. Rob and I have learned a lot about running a capital markets technology business, and we want to share our learnings with you by opening up some of our internal data. In doing so, we hope to inspire confidence and support for our mission to bring issuers and dealers closer together.
Let’s start with the most important numbers: so far in 2017, our dealers and issuers have transacted a total volume of $2.9 billion of issuance, across 75 trades with an average ticket size of $38.7 million. The year got off to brisk start as issuers and dealers looked to get out and get ahead of their yearly funding needs. March was a real high point, with $920 million of issuance across 18 trades, and we’ve seen solid flows since then.
We’re also proud of the growth and diversity of clients using our product: we started the year with 28 clients (6 dealers and 22 borrowers) and have grown 50% since then – we are now doing business with 42 institutions across 9 dealers and 33 borrowers. The pipeline is healthy, and we hope to be reporting even greater numbers by the end of the year.
Beyond the number of institutions, what’s really exciting is that we have over 200 individual users on the platform, a sign that entire global teams are engaging with our offering. One of our dealers has 24 people globally on board, across DCM, Syndicate, Structuring and Sales. All too often, banking software can seem ugly, onerous and a chore to use, but we’ve heard that Origin’s clean design and robust feature-set makes it a powerful tool for teams to coordinate with each other, especially across time zones and geographies. In fact, we have users in 24 different cities, from Tokyo to Washington DC via Tromso and Panama City, reflecting the truly global nature of the market. And anecdotally, we’ve heard that dealers have won trades because their teams were so much faster to react and better able to coordinate issuer and investor needs across the world.
And of course, what is most important is that all our users are actually doing business: our top 4 dealers are doing at least 15% of their business with Origin issuers, and for our top 2 dealers, roughly 20% of their business come from Origin issuers. The heterogeneity of trades being executed via the platform is also exciting. We’ve seen transactions across 16 different currencies, and not just the usual suspects. US Dollar, Euro and Japanese Yen trades sit side by side with Brazilian Real, Turkish Lira, even Kazakhstani Tenge. And most importantly, we are seeing dealers and issuers meeting to do trades with each other for the very first time. So we’re not only saving time and cost, but we’re helping our clients grow their business.
Our issuers have posted 193 funding curves on our platform, and they include sovereigns, agencies, supranationals, financials and corporates – the whole gamut of capital markets issuers. Whilst issuers are not permitted to view each other’s funding targets, we have built an Origin “market average” that they can use for benchmarking purposes. As we add more issuers, we will make this feature more granular by including funding curves sliced and diced by ratings, sectors and geographies. Having global visibility and accessible “benchmark” primary curves will help streamline new issue pricing and secondary market price discovery for lower rated issuers in markets where “risk-free” government issuance is absent.
Looking forward, the growth outlook is good. Having been focused on Europe so far, we are now starting to see clients reach out to us from the Middle East, Africa, Asia and even the Americas. Asia, and China in particular, represent an exciting growth opportunity for us, as the bond markets there mature and many issuers look to increase their international borrowing. We’ll be hitting the road in second half of this year, and in 2018 we hope to achieve similar traction in the Far East as we’ve seen in EMEA. We continue to be driven by our ambition to create the first truly global primary marketplace.
I hope that sharing these numbers has been of some interest and use. Regardless of our journey as a company, these data indicate a healthy marketplace that continues to function in turbulent times. Rob and I would like to take this opportunity to thank everyone who has helped us to get this far along the road – our team, investors, advisors and most importantly, our clients.
We remain at the service of issuers and dealers everywhere. If you would like to learn more about what we do and how we can work together, please do not hesitate to get in touch.