Credit Benchmark repurposing the Reuters FX sharing model for the credit markets

Reuters was ahead of its time. When I started to encounter ventures based on the data sharing model I thought about how Reuters invented this in the FX market well before the Internet.

So, it is not a surprise to see a bunch of ex Reuters guys at Credit Benchmark take this model into the credit markets. They recently closed a Series A with Index Ventures, which has made some of the best early stage bets in Fintech and the Credit Benchmark  team has built and exited earlier ventures in this market. So this one could be on the fast track.

This is not a consumer or SME play. Credit Benchmark aims to bring efficiency into the core institutional credit markets. The basic idea, like all good ideas, is simple. By sharing data on credit risk, banks get better data. As the aggregator, Credit Benchmark, could become the go-to data source and this is a market that pays good money for data.

The credit markets are big and complex. The devil is in the details; a good idea is just a starting point. So I decided to get input from somebody who knows those markets very well. Nick Morgan was one of the founders of the European credit derivatives market at JP Morgan and is now a partner at Lazuli Partners:

“Credit is the most complex and idiosyncratic of all financial risks; and yet it is the bedrock of all debt and derivative markets. A systematic technological approach to aggregating and syndicating disparate credit data is long overdue. The “Markit style” contributed data model is a simple and proven strategy, but as with credit risk itself, the devil is in the detail. The “value add” is not just in the data – it is in the subjective interpretation. This is the challenge for Credit Benchmark.”

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