Derivative Path, Inc.

About Derivative Path, Inc.

Derivative Path, Inc., founded in 2013, provides a technology-driven solution for capital markets, aimed at financial institutions, corporate end-users, and buy-side firms. The company was established by a team of experienced capital markets professionals, including Pradeep Bhatia and Steve Hawk, who identified a market opportunity following the implementation of the Dodd-Frank Act. This regulation created a need for technology support among smaller banks that were underserved by larger financial players. The founders, with extensive backgrounds at firms like Wells Fargo, ABN AMRO, and Societe Generale, leveraged their experience to build a platform that addresses the complexities of derivatives trading and regulatory compliance.

The company's core offering is DerivativeEDGE®, a cloud-based Software as a Service (SaaS) platform that provides end-to-end management of over-the-counter derivatives. This platform integrates front, middle, and back-office functionalities, which eliminates the need for multiple disparate systems. Clients use the platform for managing interest rate, foreign exchange (FX), and commodity derivatives, as well as international payments. Derivative Path generates revenue through a combination of its technology platform and advisory services, catering to a client base that includes regional and community banks, credit unions, private equity firms, and asset managers. The business model focuses on making derivatives trading more accessible and efficient for these institutions.

The DerivativeEDGE® platform encompasses the entire lifecycle of a derivatives transaction. Its features include real-time pricing and analytics, trade structuring for a variety of derivative products like swaps and options, automated hedge accounting, and regulatory compliance tools. For instance, the platform automates swap data reporting and helps users manage pre- and post-trade Dodd-Frank requirements. It also provides functionalities for international payments, offering real-time currency conversions and nostro account management. A significant milestone for the company was securing a $35 million growth equity investment from FTV Capital in June 2020, its first institutional funding round, which has fueled the expansion of its product offerings and client base. In March 2021, Derivative Path acquired Monetics, a debt management platform, to integrate loan and derivatives management for its clients.