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Transactions

December 2012
New York, New York
secured a $53 million investment from
New York, New York


Background

Street Response Laboratories (SR Labs), a fast-growing provider of end-to-end low-latency market data and exchange-connectivity solutions, was founded in 2007 by Srinivasan Ramiah.  At the time of inception, electronic trading was driving an ‘arms race’ to develop solutions that minimized latency; Srinivasan acknowledged this need and set out to build a market leading software solution in a cost effective manner that could be scaled to support a global trading infrastructure.  Leveraging Intel’s annual multi-billion R&D spend on commodity chip technology, Srinivasan and his team developed a highly-optimized proprietary software code base that ran on Intel hardware instead of spending millions into proprietary hardware development. 

Five years later, SR Labs offered a solution that could compete on latency without the need for large, upfront spend on expensive hardware. Its market leading solutions attracted an impressive, growing list of clients that included Tier 1 Global Investment Banks, Multi-Billion Dollar Hedge Funds and Proprietary Trading firms, which used SR Lab’s solutions to access more than 150 different market data feeds and exchange gateways in North America, Europe and in the Asia Pacific region.



Overview

With a little less than two months before the end of 2012, SR Labs, after receiving strong interest from several financial sponsors, approached M&A to see if they thought a deal could be completed before year end.  In a matter of days, M&A organized a dedicated team to work closely with Management to rapidly develop materials that would highlight the strong position SR Labs held in the market, its rapid growth and the opportunity for continued success in the large and growing market for electronic trading technology.  Within a week, M&A contacted dozens of financial sponsors and arranged more than fifteen meetings with interested parties in the week before Thanksgiving.

After a full review of the significant interest following meetings with the company, careful consideration, and negotiation, SR Labs agreed to a deal with Insight Venture Partners, in which the existing shareholders would retain a significant stake in the recapitalized company.  Insight Venture Partners is a leading venture capital and private equity firm investing in on-premise and SaaS-based software, eCommerce, internet and data-services companies.

Both sides came to believe that Insight’s experience with investing in and guiding high-growth software companies alongside SR Labs leading position in the market, technology and client base would serve as a powerful platform for future growth in a large, growing and fragmented market.

M&A Role

Marlin & Associates managed the process, assisted in the negotiations and acted as exclusive strategic and financial advisor to SR Labs.

Press

SR Labs Secures $53 Million Investment from Insight Venture Partners

January 08, 2013

New York – SR Labs, a leading provider of high-performance electronic-trading solutions for the global  financial services industry, today announced the completion of a $53 million investment from Insight  Venture Partners.

SR Labs plans to use the capital to expand its sales and marketing operations, to accelerate its growth outside of North America, and to continue to fund product innovation.  To further those goals, SR Labs has opened a new development center in Pune, India, to support its customers in Asia Pacific and  Europe, where systematic trading is growing rapidly.

Srinivasan Ramiah, founder and CEO of SR Labs, said, “We are excited to have Insight as a partner.  As electronic trading is expanding beyond North America, we intend to expand our operations globally.  We will be leveraging Insight’s expertise in international markets to set up operations to better serve our customers in Europe, Asia and Latin America.”

Founded in 2007, SR Labs has grown rapidly, with 100% year-on-year profitable growth since inception.  SR Labs provides technology that enables the data-gathering and execution of electronic trading.  Its low-latency market data feed handlers and high-speed exchange gateways work across multiple asset classes. SR Labs’ clients include top investment banks, hedge funds, proprietary trading firms and providers of trading technology software.  The company has an impressive list of customers, including industry leaders such as Credit Suisse and JP Morgan.  

”We are excited about the high caliber of SR Labs’ products and the company’s dedication to serving its customers.  Our investment will enable SR Labs to continue to deliver best-in-class technology and support,” said Deven Parekh, managing director at Insight Venture Partners.  “We are especially encouraged that leading financial institutions increasingly are using cost-effective third-party technology, such as SR Labs, in their trading operations.  We believe this will continue to be a strong source of growth in this market.”

As part of the transaction, Deven Parekh, managing director, and Martin Angert, principal, from Insight Venture Partners will join the board of directors.

Marlin & Associates acted as exclusive strategic and financial advisor to SR Labs.

About SR Labs

Street Response Laboratories (SR Labs) provides low-latency market data and exchange-connectivity solutions for the financial industry.  SR Labs market data solution provides extensive feed coverage including all major North American,  European and Asian Exchanges.  Our flagship products, SMDS and SREX, are currently used by top-tier investment banks and hedge funds. 

About Insight Venture Partners

Insight Venture Partners is a leading venture capital and private equity firm investing in on-premise and SaaS-based software, eCommerce, internet and data-services companies.  Founded in 1995, Insight has raised more than $5 billion and made more than 150 investments worldwide.  Our mission is to find, fund and work successfully with visionary executives who are driving change in their industries.  We provide founders with practical, hands-on growth expertise to foster long-term success.  

About Marlin & Associates

Marlin & Associates Holding LLC is a boutique investment banking and strategic advisory firm specializing in acquisitions and divestitures of U.S. and international middle-market firms that provide technology, digital information and healthcare-related products, technology and services. The firm is headquartered in New York, NY and has additional offices in San Francisco, CA; Washington, DC; Toronto, Canada; and Hong Kong, China.

Marlin & Associates Securities LLC, a wholly-owned subsidiary of Marlin & Associates Holding LLC, is a broker-dealer registered with the Securities and Exchange Commission and is a FINRA/SIPC member firm. Investment banking and/or securities are offered through Marlin & Associates Securities LLC. Marlin & Associates' professionals have advised on more than 200 successfully completed transactions.

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