New York-based exchange, IEX Group recently shuttered its IEX Cloud business on August 31st. At the eleventh hour, two former IEX Cloud executives and a silent partner decided to acquire the assets of the business.
Acquiring the Assets of IEX Cloud
On May 31st, IEX Group announced to clients that they would need to find alternative data suppliers as the firm would be shutting down its cloud-based data marketplace, IEX Cloud, on August 31st. IEX Cloud is a platform where clients can access IEX proprietary equities data, and a set of third-party datasets via IEX APIs to power their own web-based apps.
However, a few weeks before the business was closed down, two former IEX Cloud executives, Tim Baker and Pedro Aguayo, and silent partner made a bid to acquire the assets of the business (terms of the final deal have not been disclosed). As part of this deal, the three executives acquired the platform’s infrastructure, including a copy of the code, and agreements with minimum number of content providers.
The firm’s temporary website (Blueskydataplatform.com) was up and running on September 3rd, with data being turned on in phases. Although the name of the new business has not been finalized, they have commitments from a few former IEX Cloud customers.
Next Steps
Since the launch as Blue Sky Data in early September, co-founder & CTO Pedro Aguayo has been systematically launching all the cloud services that make up the Blue Sky platform – recoding and optimizing it along the way. With some smart software tweaks, the system should scale more effectively and affordably than the previous IEX Cloud system. In addition, the Blue Sky system has more structure and modularity than previously.
On the content side of the business, Blue Sky Data now has their reference data and price feeds in place, with history. The team has conducted preliminary testing on 200,000 symbols across all global exchanges – a step that has gone successfully. The front-end registration system is also ready to be deployed. Day one Blue Sky’s APIs will mirror the original IEX Cloud APIs – so old clients will be supported practically out of the gate.
Besides the various technology and product initiatives the firm has undertaken, the team has also progressed on a number of administrative tasks necessary to launch a new company like establish a corporate structure, adopt a shareholder’s agreement, officially register the company, checked trademarks, bought the URL, and other tasks too numerous to recount.
Our Take
IEX Cloud was an interesting market data business, as it targeted FinTech firms that wanted to provide stock prices, charts, and other relevant data to their users, but who couldn’t afford the steep entry price that traditional market data firms required. Not only was IEX Cloud considerably more affordable, it was also much easier to implement than other real-time data vendors. The three founders of Blue Sky Data saw the market demand for such a system, and so decided to acquire the assets of IEX Cloud.
One of the big questions we have is how many of IEX Cloud’s former clients will Blue Sky be able to attract? It is likely that a number of IEX Cloud’s prior clients found other suppliers once they were informed that the exchange planned to shutter the business at the end of August. Will Blue Sky be able to make these clients an “offer they can’t refuse”? The other question we have is what other datasets, tools and capabilities will Blue Sky add to their platform to attract new market segments?
It will be interesting to watch Blue Sky Data as they transform the IEX Cloud assets into a commercially viable business. Clearly, we will be keeping tabs on the various developments at Blue Sky Data, and keeping you, our readers, informed.
For more news about alternative data, investment research, and investment related FinTech, click here to sign up for our free ResearchWatch Weekly newsletter, or click here to subscribe to our proprietary ResearchWatch news and commentary service.