Markit Group is fast becoming a giant in the world of financial information. Starting as a joint venture between Lance Uggla and his former employer Toronto Dominion Bank (TD) in 2001, the original business focused on the creation of an independent source of data for prices in the growing credit derivatives market.
TD stipulated that more investment banks were needed to support the idea and invest in order to spin out the new venture. Uggla’s proposition to 12 blue-chip banks: provide the fledgling Markit with the requisite data and technology, and each bank would receive an option that could be exercised by investing after 12 months.
The 12 banks took up their options. Uggla and his team “worked [their] butts off for 12 months”. When the decision came for the banks to invest in 2003, they all funded. This raised £25m, paid off TD’s debt and gave Uggla a whole new set of shareholders, with 67 per cent of the equity. It also provided Markit with the platform for its electrifying growth.
Based on accounts filed at Companies House (and on which we based this year’s Hot 100), Markit Group has logged an average growth rate of 234 per cent over the past four years, with latest turnover at £53m. Uggla is anticipating similar growth for 2008. “When you reach the right scale in this industry,” he says, “margins can be about 40 to 50 per cent. But you have to reach that scale – that is the challenge.”