The biggest challenges the sell side faced during 2021 to which Avelacom responded were:
- Increased attractiveness of growth markets in Latin America, Asia-Pacific and the Middle East and Africa, providing new opportunities for market-making, trading and arbitrage.
- Fast adoption of crypto among institutional investors and the need to adapt IT infrastructure to interact with crypto exchanges without compromising performance and reliability.
- Constant technology investments in co-location and network infrastructure to improve operational redundancy and manage volatility successfully.
A standout achievement of 2021 has been Avelacom’s infrastructure development in emerging markets, backed by a joint study with Acuiti, which found that there is growing demand from latency-sensitive trading firms to enter new emerging markets in 2021. Avelacom continues to increase its points of presence and enhance its backbone across Asian, Latin American, Indian, Eastern European, Middle Eastern and African markets.
Avelacom’s offerings include low-latency connectivity, on-site colocation (in proximity to exchanges’ matching engines), hardware-as-a-service, direct market data feeds and order entry, and network management solutions. All are available across emerging markets, including Chinese and other Asian exchanges, Mumbai and the Gujarat International Finance Tec-City (Gift City), the Brazil Stock Exchange, the Saudi Stock Exchange (Tadawul), and capital markets in Poland, Russia, and South Africa.
Avelacom unveiled low-latency access solutions to crypto exchanges in 2018, reducing latencies to public clouds (including AWS and Alibaba) where crypto exchanges are hosted. Low-latency connectivity to public clouds was profitable for Avelacom in 2021 and was responsible for more than 40% of its revenue growth.
In 2021, Avelacom gained a number of new clients in crypto, including market-makers, hedge funds and prop trading firms that trade both traditional and crypto assets. These clients also include companies built by teams with traditional backgrounds that have moved into crypto, as well as retail traders who want to join the professional trading community.
Avelacom’s proprietary global network is known for having low latencies, with more than eight years of experience in building shorter paths between financial markets. Avelacom’s network connects more than 80 datacenters that host all major exchanges, ECNs and alternative trading venues, and is optimized for real-time market data delivery and order routing. The network makes use of sophisticated hardware optimized for low-latency, fiber, and ultra-high frequency radio technologies.
WHAT’S TO COME
- Further geographical expansion to the Southeast Asian markets, the Middle East and Latin America.
- Building new routes using ultra-high frequency radio technologies.
- Expanding market data offerings, including Level 2 and 3 market data feeds directly from exchanges.
During 2021, revenue grew by more than 40%, while 50% of that revenue was reinvested in network development, including deployment of new FPGA-enabled devices.
WHY THEY WON
Avelacom continues to be one of the industry’s go-to providers of connectivity and ancillary services, including low-latency connectivity, co-location and proximity hosting, hardware-as-a-service and network management solutions. The firm’s impressive 2021 revenue figures are testament to the fact that large numbers of capital markets firms rely on the Moscow-based network specialist, especially across the emerging markets where it continues to lead the way.