Building a technology company for the future of finance

Evgeny Gaevoy
Jul 7, 2020 · 4 min read
Wintermute Trading crypto market makers rasies series A to make crypto markets more liquid and efficient
Wintermute team in our London office

It’s a pretty exciting day for us today as we are announcing our Series A Round. I am thrilled to work with a top Silicon Valley VC Lightspeed and Jeremy specifically on this deal and I am grateful to Blockchain.com, who was the first institutional investor to support us in many ways.

What I am even more excited about today is the company we are building and what’s there to come. Over the course of my 10+ year career in traditional finance before starting Wintermute, I have had several personal dreams and goals:

  • Become a meaningful part of disruption in traditional finance
  • Build a technology company, not a financial services company
  • Build a company where employees feel ownership and truly belong

It feels good being on the right trajectory to achieve all three!

Disrupting Traditional Finance

Truth be told, I joined the financial sectors after reading Michael Lewis’s “Liar’s Poker” and being super puzzled about how one can get disillusioned with making tons of money. Not being prepared for applying to Goldman Sachs I chose a much better option — a firm called Optiver specialising in high frequency trading (HFT) which, back then, was a concept that pretty much nobody including myself had heard about.

At the time, algorithmic high-frequency trading firms — arguably the first fintech companies — were the future of finance. Low profile, with advanced technology, filled with smart and insightful traders and informal culture (further reinforced by Dutch no-bullshit values and humble attitudes), these companies were silently disrupting trading desks of the big banks. Those early days Optiver culture was something I was very keen to reproduce when I started Wintermute.

Although, I’ve never been part of “legacy finance”, I’ve seen enough of it being an industry insider. The more I saw, the more evident all the inefficiencies became. This was in tern translated into Wintermute’s unconditional support for DeFi advancement.

I wasn’t one of these brilliant people who bought Bitcoin for a dollar or even 100 dollars. I started reading about blockchain as a technology in 2015, but it wasn’t until early 2017 that I bought my first 0.1 BTC and decided to pursue a business in crypto. Similar to how I saw HFT as the cutting edge in 2006, today it is blockchain and all the financial innovations that it implies. Crypto has to overcome several barriers before it becomes mainstream enough to replace significant parts of “legacy finance”. Illiquidity and inefficient markets are in my view one of the biggest obstacles on that journey. Wintermute is solving that liquidity problem thus accelerating the development of the whole ecosystem.

Technology, not Financial Services Company

It was always a very deliberate decision for Wintermute to be a technology company first and foremost, not a financial services company or a trading company in the sense most people would know. For me, a young technology company has specific characteristics,

  • Working on a longer-term value creation rather than focusing exclusively on short-term returns,
  • Building products as opposed to services,
  • Scaling at low marginal costs, with technology and people, not access to capital, as its core competitive advantage.

Arguably, crypto garnering a reputation of the Wild West with all kinds of shady individuals, legal (and illegal) entities with the general, reckless “to-the-moon” sentiment was not the most obvious choice for that type of company and I still remember puzzled look on people’s faces when I kept saying we are not going to do an ICO. Nevertheless we got going, managing to escape the many distractions and lures of the evolving landscape around us, keeping the focus on the long term target that grew less and less distant every month.

Yet another question was on how to structure the company. I’ve had to answer why we are not a hedge fund way more times than I thought made sense. I guess there is still this perception in the market that finance is about capital and not technology, but I believe this view is extremely outdated. Lightspeed was looking beyond the clichés, at our vision, our business model and business fundamentals, and I am excited that they also see what we see. A technology company with a long-term value creation mission.

Ownership and Belonging

This is the most important point of the three. I’ve always had a very clear vision of what kind of people I’d like to share this journey with: sharp, thoughtful, ambitious yet humble, independent yet strong team players. And however selfish that was, I couldn’t resist adding a bit of my inner nerd to it, starting with the corporate name, following with superhero references in software components’ names and definitely not forgetting board and computer games as the preferred past time with a weird touch of end-of-year karaoke.

I’ve also always had an idea of what manager I want to be and what managers I’d like to promote. I’d like to think that one of (very) few social talents I have is to see non-obvious potential in people and help them leverage and embrace that potential. I would much rather hire a complete misfit with a bright spark inside than a “safe choice” candidate that ticks all the regular/boring boxes, but joins us for all wrong reasons. This is diversity in the most radical meaning of the word to me. At Wintermute, we embrace the differences in people around us and long to see not only the company overall but also all the people who are building it to grow and prosper individually.

***

Official Press Release is here

A great post by Jeremy, the Lightspeed partner behind this is here

A great article by Frank Chaparro on the Block is here

Medium is an open platform where 170 million readers come to find insightful and dynamic thinking. Here, expert and undiscovered voices alike dive into the heart of any topic and bring new ideas to the surface. Learn more

Follow the writers, publications, and topics that matter to you, and you’ll see them on your homepage and in your inbox. Explore

If you have a story to tell, knowledge to share, or a perspective to offer — welcome home. It’s easy and free to post your thinking on any topic. Write on Medium