The 'unsexy' secures $250m backing – Financial startups take note

Yes, you’ve never probably never heard of the Markit Group. But today it announced a $250m investment by General Atlantic valuing the 6/7 year old company headquartered in London at $3.3 billion. This makes it possibly one of the two or three most successful UK start-ups ever (if you stretch the startup thing to seven years of course, which is an ongoing debate).

I thought it might be worth while highlighing this company, as a contrast to our usual programming. Yes, so it deals with trying to create quality data in the burgeoning credit derivatives market. This is not the realtime web or augmented reality. It’s not that sexy, huh kids.

But let’s remind ourselves what this is all about. The same principles apply with any (tech) company. The company clearly executed well and Markit is now part of the day-to-day plumbing in the of the financial markets. Founders Lance Uggla, Kevin Gould and Rony Grushka built a great platform and monetised the data so they fully deserve this success.

The company was not VC backed, but by customers (banks) paying cash for a service. Despite the market it played in being ‘boring’ for some, it’s a market that literally makes money go round.

Interestingly Sean Park of Nauiokas Park blogs about them today as representing..

“the cognitive, cultural and expertise chasm that exists between ‘Wall Street’ and ‘the Valley’ (or the ‘City’ and the ‘Roundabout’ to use the less good UK-centric metaphor.) They might as well be on different planets.”

I guess what he means is, too many VCs and PE funds chasing ‘sexy’ startups rather than ones that actually, er, work. Many will think he has a point.

But from the looks of things, there aren’t that many VCs chasing anything right now…

My view is that you can’t really compare the consumer mobile/web market with products which serve the financial markets. Consumer apps do need the oxygen of PR and buzz to get traction. Financial startups can walk into a bank and get a million dollar contract without even a press release.

But there it is definitely worth pointing out that there ought to be more financial startups coming out of Europe – ones that deal with improving the way financial markets works – and I’m not talking about shoring up the old broken system.