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Anyone who has worked in the financial services sector will at least be aware of Bloomberg Terminal, a research, data and analytics platform used to garner real-time insights on the financial markets. Bloomberg Terminal has emerged as something of an industry standard, used by more than 300,000 people at just about every major financial and investment-related corporation globally — but it costs north of $20,000 per user each year to license, a fee that is prohibitively high for many organizations.
This is something that OpenBB is setting out to tackle, by democratizing an industry that has been “dominated by monopolistic and proprietary incumbents” for the past four decades — and it’s doing so with an entirely open source approach.
After launching initially last year as an open source investment research terminal called Gamestonk Terminal, the founding team of Didier Lopes, Artem Veremey, and James Maslek were approached by OSS Capital with a view toward making an investment to build a commercial company on top of the terminal. And so OpenBB is formally launching this week with $8.5 million in funding from OSS Capital, with contributions from notable angel investors including early Google backer Ram Shriram, entrepreneur and investor Naval Ravikant, and Elad Gil.
Open for business
The newly-named OpenBB Terminal is very much an alpha-stage product, one that’s aimed at the more technically minded. It’s pitched as a “Python-based integrated environment for investment research,” allowing any trader to access data science and machine learning smarts to unpack raw, unrefined data.
In its initial guise, OpenBB is deployed via a command line interface (CLI), though plans are afoot to build a proper GUI for regular users. The platform gleans its investment data via publicly available sources, or those that require an API key — these include Alpha Vantage, Financial Modeling Prep, Finnhub, Reddit, Twitter, Coinbase, the SEC, and many more.
OpenBB leans on machine learning across myriad use-cases. For example, it can look at Apple’s share price over the past week, and then grab news headlines via one of Finnhub’s APIs and derive sentiment from the headline using natural language processing (NLP), and then correlate the impact of news on Apple’s share price.
Elsewhere, OpenBB can also leverage deep learning to predict stock price movement using historical data, though in reality the model can be applied to just about anything, including economic data, crypto, and more — and the company is planning to double down on these predictive smarts.
“The idea in the future is that we don’t rely just on the past historical data to train the model, but we use further data available in our platform,” Lopes told VentureBeat. “For example, building powerful models that use share price, news, sentiment on social media, insider trading….. anything, really.”
While Bloomberg Terminal is the industry standard for countless financial organizations, there are other alternatives on the market such as Refinitiv Eikon and Factset. But OpenBB hopes that its open source credentials, and foundations in Python, will stand it in good stead to win the hearts and minds of many — flexibility, ultimately, is the name of the game.
“By being open source, affordable, and highly customizable due to the usage of Python, we differentiate from these platforms as well tailor to the specific needs of small-to-medium-sized institutions,” Lopes said. “The advantage we have over competitors is our open source nature when it comes to incorporating external data sources.”
Indeed, being open source means that the broader community can add their own flavors to the OpenBB mix — by way of example, one contributor who was interested in the foreign currency exchange market (Forex) added an Oanda integration to the project.
Given that the entire source code is available for anyone to modify, companies can create their own version of the terminal with customizations that suit their own niche use-cases. If they want to remove all the clutter and work purely with one type of asset, they can create a sort of light-weight version of the terminal with a much narrower focus on Forex, or cryptocurrency, for example.
But who is the actual intended end-user, exactly? In truth, it could be anyone from regional investment banks and hedge funds, to venture capitalists, family offices, and mutual funds. But the product isn’t quite at that stage yet — that is where the initial seed capital enters the fray. It’s all about building the product into something that could serve a potentially large market.
“In the long-term, we would also be able to target companies like Morgan Stanley, JP Morgan, Blackrock, Vanguard, UBS, Goldman Sachs, Deutsche Bank, and similar,” Lopes explained. “[But] we fully understand that this is not possible right now.”
There is no escaping the pervasiveness of Bloomberg Terminal, and it’s clear that it’s not going to be knocked off its perch any time soon — but that isn’t the direct goal of OpenBB.
“Being a product that has been around for more than 40 years, it [Bloomberg Terminal] has become a staple for many of the larger institutions,” Lopes conceded. “OpenBB realizes that it can’t directly compete with this industry standard. One of the big caveats of the Bloomberg Terminal is that the costs are relatively high for a small-to-medium sized institution, which is an area which we can capitalize on.”
OpenBB is also looking to differentiate in areas such as portfolio optimization and attribution (reports), and tailor itself more to the needs of smaller institutions. Moreover, it also aims to target different asset classes that may not be as covered so well on alternative platforms — this may include cryptocurrencies, NFTs, fintech lending services, and so on.
“Digital assets is a niche area that isn’t covered extensively — for example, providing insights on movements within this industry, but also more advanced areas like valuation of loans to a farmer in Africa,” Lopes said. “These are topics that we can quite easily differentiate when we notice there is a lot of interest in this area. That is one of our advantages by being open source and developing in Python.”
And then there is academia too, an arena that OpenBB could cater well to — teachers could use the terminal to explain market movements to students using real data, or PhD students could develop their thesis to build products or features that can be accessed by anyone around the world. And this could all work to OpenBB’s benefit too.
“Given our product being free and open source, we can much easily reach academia, which allows us to stay at the vanguard of innovation since students and researchers can develop new features to further strengthen OpenBB Terminal capabilities,” Lopes said.
For now, OpenBB Terminal will be an entirely free proposition, but with a fully-fledged commercial business now behind it and $8.5 million in the bank, there will be a concerted push to monetize it. Some of the ideas currently under consideration include building a “slick 21st century UI,” as well as developing a SaaS model, where OpenBB serves up the computational power to run machine learning models on vast amounts of data.
Additionally, OpenBB is also exploring ways to build bridges between data sources and investors. For example, an investor probably wouldn’t want to pay for raw data from a particular source, but if OpenBB Terminal could extract insights from that data using machine learning or data science techniques and deliver it with context — this is something that an individual or organization may wish to pay for.
It is still early days for OpenBB, but the early traction it gained last year in its initial form suggests there is a real demand for what it’s promising — and that is why OSS Capital is betting on Lopes and Co.
“The investment research industry has been dominated by monopolistic and proprietary incumbents since the 1980s, and it has taken until now for someone to develop an open source, democratized platform for the current and next generation of market makers, traders and equities professionals,” OSS Capital founder Joseph Jacks said. “OpenBB is the right idea, at the right time.”
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