“It’s really interesting to look across the landscape and see the different fintech companies out there and what they’re doing,” Clay says. “And believe me, everybody’s looking to see who’s out there in these spaces. I think the appetite for a partnering, or acquiring these impactful fintech companies, is very high right now.”

Why Do Startups Get Acquired?

Clay founded a trading startup called LiveVol, which was a very specialized company focused on U.S.-based derivatives, data and analytics. Four years ago, her startup was acquired by Cboe. Among the reasons for that merger were high demands on the customers’ side.

“We couldn’t keep up with client demand to the extent we would want to because the clients were asking so much of us in terms of our technical deliveries and our products,” Clay explains.

Due to the specifics of the business, the demands of LiveVol’s clients with the API delivery were huge. Clay spent a lot of time doing R&D on which technology stack was going to be able to deliver the data with the latency that her clients were comfortable with. Talking about the capital markets and the derivatives markets in particular, a ton of data has to be examined. There are problems that can hardly be solved without any partnerships.

However, if a fintech company isn’t alone in this battle both parties can benefit from cooperation through keeping their focus sharp.

“We’ve made a huge investment in our infrastructure and our technology to be able to deliver the data on the API with much greater speed than we ever have before,” Clay says. “It is a huge focus of ours.”

The Bottom Line

Any fintech company should know what value it brings to the customers. And if it wants to be acquired, it may need to understand what value it can bring to a larger organization. Especially in the fintech world, the speed of delivery and adaptation to changing technology matters a lot. So partnerships with larger organizations can be a solution to growing customer demands.

Catherine Clay has been in the finance industry for 25 years. She began as a derivatives trader in 1994, trading equity and index options. Following her 12-year trading career, she founded a fintech company called LiveVol, which Cboe acquired in August 2015. LiveVol started as an equity and index options technology and services provider, and expanded into other asset classes. In her current role at Cboe, Clay runs a group called Information Solutions, which includes derived data and analytics, index calculation services and execution platforms.

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