A startup fixed-income platform called Bondcube has filed for liquidation just three months after its launch, a sign that entrepreneurs are finding it difficult to ease bond trading.
The London-based company was 30 percent owned by Deutsche Boerse AG, which provided two rounds of investment. It went live for fixed-income trading in the U.S. and Europe in April.
“Although Bondcube succeeded to launch its platform, over recent months sufficient business prospects failed to materialize and as a result the long-term financial viability of the business deteriorated,” Deutsche Boerse said in a statement. “In these circumstances, the shareholders decided not to provide further funding to Bondcube.”
Technology companies are trying to step into a gap in the market created by requirements on banks to hold more capital. Rule changes have restricted the banks’ ability to trade on their own account and have also made it more expensive -- and therefore less profitable -- for the firms to hold bonds in the expectation that clients will want to buy them.
Paul Reynolds, Bondcube’s chief executive officer, couldn’t immediately be reached for comment.
Bondcube competed with the likes of MarketAxess Holdings Inc. and Electronifie Inc., which operate their own electronic bond venues. Bloomberg LP, the parent of this news organization, also has a platform.
Bondcube’s liquidation was earlier reported by Markets Media.