DRW VC Portfolio Company Spotlight: Jeff Bolke, Eventus

1. How did Eventus come to be and has the original aim of the company changed since its origin?

Our Founder and CEO, Travis Schwab, previously served as the CEO of broker-dealer RGM Securities (which has since been acquired by DRW in 2017). At the time, RGM Securities accounted for as much as 5% of U.S. equities trading volume. In that role, Travis couldn’t find a solution to help the firm from a trade surveillance and market risk standpoint given the intense level of activity in the market. Other products in the space were all operating without the ability to monitor in real time or handle scale. Recognizing that there was a gap in the market, he set out to address this across asset classes and with the capability to handle extremely high levels of activity – from volume, to frequency, to vast amounts of data. That product became the Eventus Validus platform, initially used in equities, but more recently adopted globally across asset classes including futures, options, digital asset markets, fixed income and FX.

At Eventus, our client base has expanded significantly over the years and comprises many larger, more global firms, including broker-dealers, a large percentage of FCMs, more than 20 digital asset and other exchanges, prop trading firms, buy-side institutions, and energy and commodity trading firms. Over the past 3-5 years, we have become the market leader in trade surveillance for the digital asset markets.

2. What makes Eventus a global leader in multi-asset class trade surveillance?

We have been able to scale successfully since our inception. Since our Series B funding round (in which DRW Venture Capital participated) last September, we now have more than 100 employees in 10 countries, with growing sales teams in North America, EMEA and APAC. We are known for high-touch service and the breadth of expertise throughout the organization, particularly with experienced market practitioners and regulatory experts who can monitor industry developments and collaborate with our clients on how best to meet their compliance challenges.

Clients appreciate the ability to leverage our full breadth of built-in tools and procedures while also having the versatility to make Validus their own and tailor it to their evolving situations. Our technology creates efficiencies for compliance teams that need to do more with less. Validus lowers the total cost of ownership (TCO) by escalating the most actionable alerts, ending problematic cycles of false positives, and increasing productivity and scalability. This reduces response times and avoids time-wasting chases.

We’re incredibly proud to have earned more than 25 global and regional awards and honors for best-in-class technology, service, and expertise in just the past four years. These include recent wins in a variety of prestigious industry awards such as the 2022 Waters Rankings Award for Best Market Surveillance Provider and our third win in four years of Risk.net’s Risk Technology Award for Trade Surveillance Product of the Year. We’ve also started to make our mark in key regions, with five awards specifically for our work in the Asia-Pacific region, two for Europe and one for Canada.

3. Can you explain Validus and how the platform is different from other offerings?

Validus provides trade surveillance and risk monitoring, along with anti-money laundering (AML) and transaction monitoring across asset classes. The platform is scalable and easy to operate, running as a service in the cloud that monitors, tracks and analyzes trade flows and financial risk. Validus employs robotic process automation (RPA), including machine learning (ML), to ensure that only the most actionable alerts are escalated for further investigation through anomaly detection and pattern analysis. It’s the only platform that provides the ability to cast such a wide net while escalating only the most actionable alerts, in real time or T+1. Because Validus is built to handle alert remediation for billions of messages a day, around the clock, we offer exhaustive coverage across trading flows and scalability to handle any increased capacity needs.

We uniquely combine RPA advanced analytics – providing transparency and flexibility to dynamically deploy and adapt them – with procedural automation, preserving supportable information clients can use for regulatory and supervisory review, as well as pattern and practice analysis. Other platforms employing ML don’t include this procedural foundation, which is key to helping users answer regulators’ inquiries in a supportable, easy-to-understand fashion.

Validus has hundreds of ready-to-use trade surveillance and risk-monitoring procedures and a sandbox environment that enables clients to test and quickly deploy new procedures and calibrations. These tools can identify all types of market manipulation strategies, addressing even the most complex market abuse behaviors. Because it can be run as a service in the cloud, Validus requires no infrastructure or technology support from clients. Another way we make things easier for our clients is that our development team writes to their architecture, rather than having them write to the platform.

Those clients needing an algo monitoring tool can use one platform – Validus – for that as well as trade surveillance, further increasing their efficiencies.

Another factor distinguishing Eventus from competitors is our ability to ingest any data type in any format, streamlining onboarding and reducing time to market for clients. We offer native API access, maximizing flexibility and interoperability and giving clients the ability to tap into more than 70 ready-to-use technology integrations.

Our clients get the unique benefit of an off-the-shelf solution that’s also fully customizable – giving them the best of the build and buy worlds but without the need to invest in infrastructure, upgrades or technology support.

4. How has the digital assets space informed your growth strategy?

We recognized early on that digital assets represented an exciting opportunity for growth, and we wanted to be an early player that would set the standard for trade surveillance in a market that so far had very few tools to apply. Our expertise in financial markets of all kinds and our insights into what regulators want to see in their mission of investor protection provided us with a strong foundation to meet the needs of crypto exchanges and intermediaries in markets throughout the world as demand for the asset class would grow. We put significant work into ensuring that Validus could handle the massive data flow, 24/7 as that would be a must for crypto exchanges operating without the market downtime you would see in other asset classes.

Validus meets the rigorous security requirements of these markets and now surveils billions of messages a day, up to 8 decimal places, in real-time, around the clock.

We’ve been able to distinguish ourselves as a leader in this space, and our multi-asset class experience has been a strong selling point for exchanges that may want to expand into other asset classes, and for more traditional financial institutions looking to enter the digital asset space.

Eventus has become the go-to provider of trade surveillance for marquee crypto exchanges, including FTX.COM and FTX US, Coinbase, Gemini, ErisX (now part of Cboe Global Markets), BitMEX, Bitbuy (Canada) and seven digital asset exchanges in APAC, one of which is Hong Kong-based OSL Digital Securities.

5. What can we expect from Eventus over the next year?

We’re constantly enhancing Validus, with input from clients and an eye on regulatory developments globally. There will be further growth both on the staff and client side in our three primary regions - North America, EMEA and APAC. We expect to add even more new positions as we continue to broaden our reach and areas of expertise.

Among the new features of Validus will be new cross-venue, cross-product surveillance insights and analytics, expanding our behavioral statistics to help our clients identify patterns and anomalies. Users will also benefit from new case management and expanded RPA automation features.

We’re undertaking a complete refresh and overhaul of the user interface and workflow, ensuring client operations gain maximum efficiencies and focus on the most high-priority, pressing items and alerts.