Capital Markets Financial Technology Company Derivative Path Secures $35 Million

By Dan Anderson ● June 29, 2020
  • Derivative Path, a leading capital markets financial technology and services company, announced that it raised $35 million in growth equity funding from FTV Capital

Derivative Path — a leading capital markets financial technology and services company — announced that it raised $35 million in growth equity funding from FTV Capital. The investment DPI’s first outside institutional round and will be used to expand its product offerings and help accelerate the company’s client-centric growth with financial institutions, end users, and buy-side clients using DPI’s interest rate derivatives and foreign exchange platform.

Launched in May 2013, DPI was founded by a team of capital markets sales, trading, technology, and market risk professionals that also provided the company’s initial funding. Originally founded as a leading-edge trading platform for regional banks, the company has added new capabilities to its platforms including automated hedge accounting and comprehensive interest rate derivative product coverage and expanded into new asset classes like FX. And Derivative Path’s platform has become the system-of-record for interest rate and FX hedges for many of the leading regional banks in the U.S. and this investment will help DPI enhance its offerings while continuing to provide best-in-class client service and support.

Derivative Path’s cloud-based trading technology, DerivativeEDGE is a state-of-the-art derivative trading platform that facilitates effortless interest rate and FX hedge activity management. And the system was designed as a complete end-to-end solution where users have front-, middle-, and back-office functionality in one platform, eliminating the inefficiencies of working with disparate systems to manage various aspects of operational and pre/post-trade workflows. And the platform — which has been used by over 130 banks and institutional clients — also comes complete with automated Dodd-Frank compliance, integrated real-time market data, automated swap data reporting, and cleared trade affirmation.

What does Derivative Path do? Derivative Path is a San Francisco Bay Area-based FinTech company with additional offices in New York City and Chicago. And the company provides a technology-led solution to assist financial institutions, buy-side, and commercial end-users in executing and managing their over-the-counter interest rate derivative and foreign exchange transactions.

The Derivative Path team is comprised of derivative industry veterans — who have held senior positions with some of the world’s largest capital markets firms such as Wells Fargo, ABN AMRO, Société Générale, Bank of America, Barclays, AIG, and JPMorgan Chase.

Along with the investment, FTV Capital’s Robert Anderson and Brent Fierro will join Derivative Path’s board of directors.

Key Quotes:

“Seven years ago, we were very fortunate to be able to put together a team of founding principals who were experts in their respective disciplines, had a clear vision of where our industry was going and recognized the important role technology would play to help market participants manage their trading businesses. Since then, we have continued to grow our team with professionals with deep expertise equipped to tackle and solve the problems our industry faces. Despite all we have accomplished in the last several years, this is just the beginning. This transaction with FTV Capital is validation that Derivative Path and its technology are poised to continue to grow market share and drive innovation in the industry. We look forward to partnering with FTV Capital to further support our clients and lead the market through product innovation.”

– Pradeep Bhatia, co-founder and co-CEO at Derivative Path

“Financial institutions and corporates continue to increase their adoption of interest rate and FX derivatives to more effectively manage balance sheet and operational risks. Through a unique combination of expertise, technology and service, the seasoned team at Derivative Path continues to democratize the usage of derivatives for operational use cases, such as back-to-back lending, balance sheet hedging, supply-chain FX exposure, and more. The company’s purpose-built technology platform combined with top-tier service has led to happy, successful customers and an impressive growth trajectory. We are proud to announce this partnership and look forward to supporting DPI’s next chapter of innovation.”

– Robert Anderson, partner at FTV Capital