Blockchain market data provider Kaiko has raised €5 million in seed-round funding to scale their product offerings, expand their team, and open an office in New York. According to an announcement shared with Finance Magnates, investors in the seed round include Anthemis Group, Point Nine Capital, and CoinShares.
“All of us at Kaiko have observed the power of independent, reliable and accountable market data to empower decision-makers and level information asymmetries,” said Ambre Soubiran, the company’s chief executive officer, to Finance Magnates. “We are thrilled to be working with Point Nine and Anthemis to continue to expand our data offerings in the new digital economy.”
Kaiko describes itself as “a market data provider in the blockchain-based digital assets space” that operates with the goal of “providing institutional investors and market participants with enterprise-grade data infrastructure.” Kaiko claims that its products have been designed for “enterprise-level clients who require both low-latency and high-availability access to clean trade and order book data,” and that they “[enable] investors to make informed decisions across 80+ exchanges.”
Institutional demand has influenced Kaiko’s plans for development
CoinShares’ investing lead and cryptocurrency analyst Meltem Demirors, who testified before the US House of Representatives during a hearing on cryptocurrencies this July, said that CoinShares relies on data the Kaiko provides on a daily basis: “CoinShares’ proprietary investments are strategic and support the needs of our growing businesses,” she said in a statement.
2/ i was given the opportunity to testify during the @FSCDems hearing, and was incredibly impressed by the nuanced understanding of bitcoin on display from our congressmen and women.
you can find the hearing recording and written testimony here: https://t.co/BX7ktMZftD
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— Meltem Demirors (@Melt_Dem) July 19, 2019
“Over the last two years, access to clean and reliable market data has been critical to support our capital markets and asset management businesses. Kaiko’s highly skilled team provides us with solid data services that we use every day as paying clients.”
Soubiran said that Kaiko has experienced growing demand for their services from institutional investors, which has had an important influence on the company’s future plans: “institutional interest guides our development approach, and has led to our investment in products that are at the quality that traditional financial market participants expect,” she explained.
As part of these future plans, the company will present an aggregated order book data product that allows investors to leverage level II data in trading decisions at Invest:Asia in Singapore this week.
In crypto, good data is more precious than gold
Access to reliable data has become more important than ever as the cryptocurrency industry has worked to come to grips with the revelation of widespread market manipulation that came in Bitwise Asset Management’s presentation to the US Securities and Exchange Commission (SEC) earlier this year.
The presentation provided evidence showing that the vast majority of Bitcoin trading volume was fake, and that some of the industry’s most relied-upon market data providers–including CoinMarketCap–were not doing an adequate job of flagging down suspiciously high trading activity on certain exchanges.
SEC Chairman Jay Clayton said on Monday that unabated concerns around market manipulation could contribute to the possible denial of several Bitcoin ETF applications that are currently making their way through the Commission.
“An even harder question given that they trade on largely unregulated exchanges is how can we be sure that those prices aren’t subject to significant manipulation?,” he said to CNBC on Monday. “People needed to answer these hard questions for us to be comfortable that this was the appropriate kind of product.”