Tradeteq’s trading venue enables banks and financial institutions to connect, interact, and transact. The company’s AI-driven credit scoring, advanced analytics, and investment management engine provide risk transparency and the ability to make informed decisions. Streamlined securitization tools reduce complexity and make trade finance investments efficient, liquid, and transparent. Pulse 2.0 interviewed Tradeteq founder and CEO Christoph Gugelmann to learn more about the company.
Christoph Gugelmann’s Background
Gugelmann has a background in capital markets, and he has held senior management roles in sales and trading at Goldman Sachs, Morgan Stanley, and Bank of America. Gugelmann said:
“In the years that followed, I delved into commodity trading and asset management. This broad experience in the financial sector helped in developing the idea for Tradeteq, and creating the automated tech infrastructure for the distribution of trade finance instruments.”
Formation Of Tradeteq
How did the idea for the company come together? Gugelmann shared:
“The idea for the company came together after recognizing the significant gap in the trade finance market, as highlighted by the World Trade Organisation (WTO). It’s estimated that 80-90% of all trade requires some form of financing, yet only a subset of this need is met by a few large commercial banks. This discrepancy is largely due to the friction costs associated with distributing trade finance to capital markets. Unlike other forms of private debt, trade finance remains largely inaccessible to capital markets.”
“Tradeteq saw an opportunity to leverage automation and standardize securitization processes to eliminate these friction costs. We set up Tradeteq to help open the flow of liquidity from institutional investors to underserved Small and Medium-sized Enterprises (SMEs), ultimately aiding them in their working capital management.”
Favorite Memory
What has been Gugelmann’s favorite memory working for the company so far? Gugelmann reflected:
“Building Tradeteq was intense, and I can’t point to just a single favorite event. I get most excited when our customers tell us that we’ve made a clear, positive impact on their positions. The customer value proposition is at the center of our activities and is something we continuously drive for further improvements to.”
Core Products
What are the company’s core products and features? Gugelmann explained:
“Tradeteq offers a primary marketplace designed to bridge asset sellers of trade finance and other private debts with institutional investors. Through our platform, asset sellers are equipped with tools that streamline and expedite the process from listing a transaction to its execution. Tradeteq handles the entire transaction, ensuring a seamless experience for sellers.”
“On the other side, institutional investors benefit from our platform by having direct access to immediately executable investment programs. This not only simplifies their transaction process but also reduces costs, thanks to normalized transaction documents and real-time reporting capabilities.”
Challenges Faced
What challenges has Gugelmann faced in building the company? Gugelmann acknowledged:
“Trade finance distribution is a blue ocean opportunity. There is a vast amount of unmet financing demand on the corporate side and a corresponding investor demand for short-term instruments that are largely uncorrelated with other financial instruments while providing attractive returns.”
“The only constraint is to scale the infrastructure fast enough to meet this demand and bridge the gap between the financing demand and available investment opportunities.”
Evolution Of Tradeteq’s Technology
How has the company’s technology evolved since launching? Gugelmann noted:
“Since launching, the company’s technology has undergone significant evolution. Our platform was developed in close collaboration with leading financial institutions, ensuring it meets industry standards and addresses core needs. Beyond our core features, we’ve delved deep into less visible areas like data residency, data segregation, and acquiring necessary certifications. This attention to detail ensures our platform’s robustness and security. Furthermore, we are committed to continuous improvement and regularly refine our technology in alignment with the feedback and requirements of our customers.”
Significant Milestones
What have been some of the company’s most significant milestones? Gugelmann cited:
“Tradeteq introduced its workflow automation in 2019, engineered for security and global deployment. It added its Securitisation as a Service offering in 2020 to automate and streamline the securitization of assets into tradeable securities. Last year, we launched the Tradeteq Marketplace for primary issuance of private debt and real assets, currently standing at over 200 members.”
“All services so far have been based on matching one asset seller with one institutional investor. Challenging this, we recently introduced multi-seller investment offerings and a JPY 11 billion note program, where investors benefit from higher diversification from inception and a reduced execution workload. Multi-seller programs can also materially reduce the risk of under-utilization that has an immediate positive impact on investor yields.”
“The platform enabled the issuance of USD $3 billion worth of notes. More than 2 million trade finance & other private debt instruments have been financed within those note facilities. As of now, the marketplace has 200 members, including many leading financial institutions.”
Customer Success Stories
In regards to customer success stories, Gugelmann highlighted:
“The African Finance Corporation (AFC) is a pan-African, investment grade, multilateral development financial institution that is looking to address the trade finance infrastructure gap in Africa. Tradeteq assisted the AFC with its repackaging program and helped the AFC raise capital from institutional investors.”
Total Addressable Market
What total addressable market (TAM) size is the company pursuing? Gugelmann assessed:
“The USD $2.5 trillion gap of unmet trade finance demand represents a greenfield market. Asset sellers such as banks and alternative lending platforms cannot close this gap without cheap and scalable distribution infrastructure that Tradeteq is uniquely able to provide.”
Differentiation From The Competition
What differentiates the company from its competition? Gugelmann affirmed:
“Tradeteq is the only private debt marketplace that offers end-to-end integration from back-office systems of the asset sellers to the analytics system of investors. Tradeteq offers a full transaction life-cycle management, including an automated transaction service. Tradeteq only serves asset sellers and investors. This differentiates Tradeteq from platforms that combine lending and distribution activities. From the inception of the company, we wanted to avoid any such conflict.”
Future Company Goals
What are some of the company’s future company goals? Gugelmann concluded:
“Our goal is to make trade finance a capital market accessible product and therefore channel liquidity from institutional investors through banks and alternative lenders to underserved corporates all across the world.”
