Closing a US$7 million funding round, bond marketplace OpenYield plans to boost its client base, drive global expansion and expand its product range. The round, led by Canapi Ventures and supported by Flow Traders and Clocktower Ventures, follows earlier fundraising participation from TD Bank and Fin Capital.
OpenYield aims to provide an equity-like marketplace for bonds, in line with the broad ‘equitisation’ that has been observed across fixed income markets in recent months. The firm aggregates different types of electronic liquidity and provides them to brokerages, advisory platforms and asset managers.
READ MORE: ‘Equitisation’ of bond market on its way
“The fundamental limiting factor in the market is on the liquidity provision side,” Jonathan Birnbaum, founder and CEO of OpenYield, told The DESK. “If investors go to brokerages or advisors to buy bonds, the product experiences are pretty awful. They’re constrained by these legacy back-end marketplaces. It can take minutes for trades to execute, there can be high minimums and fees, and it can be really clunky to integrate with them as new entrants to the market.”
Increased use of automated liquidity is altering this landscape, however. “It removes latency between knowing what the price is and possibly executing. It can happen in a continuous way,” Birnbaum explained.
With its latest funding round, the company plans to accelerate its onboarding process.
“The goal is to be connected everywhere bonds are traded,” Birnbaum stated. “it requires lots of partnerships with those who are building connectivities and pipes for participants.”
There are also intentions to bring in a more international client base, capitalising on growing demands from global players.
The company also plans to expand its product suite, for the first time since its launch in Q2.
“We’re rolling out our variant of the RFQ called request for order (RFO); whenever there are interested parties looking at a bond, we then ping all the algos to populate the orderbook,” Birnbaum shared.
On Flow Traders’ role in the investment round, Matt O’Neill, global head of business development, told The DESK, “OpenYield is passionate about revolutionising the way global retail investors of all types trade bonds. Flow Traders share the same passion and we are excited to deepen our partnership.”
