As a thesis-driven and operating-centric venture capital firm, we at Jump Capital look to invest in areas with strong macro trends where we can leverage our deep industry knowledge and operating experience to accelerate the growth of companies we believe can become dominant players in their markets. One area we’ve spent significant time exploring is risk management systems within capital markets. Our recent investment in Eventus Systems, an emerging leader in trade surveillance and risk management technology, exemplifies the type of company and leadership team we are excited to partner with.

Fitting the investment thesis

Broadly, we believe compliance technology is a market ripe for new and better solutions. Currently, large financial institutions spend close to 10% of their operating costs on compliance, and still pay billions of dollars in regulatory fines, with companies such as J.P. Morgan and HSBC each having been subject to individual fines of over $1 billion.

For companies operating in the capital markets, it’s particularly critical to effectively manage regulatory and market risks. A central element to managing these risks is market surveillance, or the monitoring, analysis, and reporting of trading activity in order to safeguard compliance with applicable regulations and prevent manipulative or illegal trading practices. The importance of trade surveillance is underscored by the fact that approximately $1 billion per year is spent on trade surveillance technology vendors, with this number consistently growing >15% YoY.

At Jump Capital, we are deeply ingrained in the capital markets space and are investors in nearly a dozen capital markets companies. From this experience, we have seen first-hand the significant pain points that are experienced in managing trade surveillance and market risk, as well as the benefits that can be gained from working with Eventus.

The Eventus team also exemplifies the founder/market fit we seek to invest in at Jump. Eventus CEO Travis Schwab and his team have been working in this space for many years and have an extraordinarily deep understanding of capital markets and the needs of their customers. This level of expertise can only be gained through years of first-hand experience, and uniquely positions the company to understand and solve the complex and specialized needs of their customers.

Exceptional operating results

Eventus’ market-leading and award-winning solution has enabled the company to become a default choice for large established firms seeking a better trade surveillance vendor, as well as for new exchanges and trading firms across the global equities, equity options, futures, fixed income, and FX markets. Eventus has already become a dominant player in crypto market surveillance, as it is used by many of the largest players in this space.

Eventus has emerged as a clear next-generation market leader by offering a trade surveillance platform that is highly flexible and scalable, and utilizes AI and intuitive workflows for efficient monitoring, alerting, and investigations. When talking with Eventus’ customers, it is clear that Eventus has created a risk and compliance solution that customers actually love. One customer summarized this well when he said: “The usability is superb, and the AI is amazing. I’ve used several other solutions, but once you use Eventus, I can’t imagine how you would choose anything else.”

The path forward

We’re thrilled to be investors in Eventus and looking forward to helping them accelerate their growth and further extend their leadership in the trade surveillance and risk management space. In the coming years, we look forward to helping them scale their team, continue to expand into new geographic markets, and roll-out additional products and features to meet the ever-expanding risk management needs of their clients.

Keep an eye out for future posts and investments in the broader compliance sector as we continue to see many unique opportunities to solve these complex and growing needs.