BIDS Trading: Trading up in Calgary
It’s a 4.5-hour direct flight from Calgary to New York City, but BIDS Trading gets there in a split second – in milliseconds, actually.
Founded in 2007, BIDS is headquartered in New York, but the company’s origins – and its technical team – are in Calgary. BIDS is a registered broker-dealer and operates the BIDS Alternative Trading System, which brings counterparties together to anonymously trade large blocks of shares. Last year, BIDS announced $41 million in revenue and just months ago the company was acquired by one of the world’s largest market operators, Cboe Global Markets.
The proof of concept behind BIDS was created by six Canadians – five of them from Calgary – who had worked together at another fintech company, building trading systems and stock exchanges for different companies in Saudi Arabia, Africa and Eastern Europe. Eventually, the concept they developed would be funded by a dozen of the world’s largest banks and financial institutions.
Brett Vasconcellos, Chief Technology Officer, BIDS Trading
HOW IT WORKS
BIDS specializes in “block trading”, a purchase and sale of a large number of equities. How large? Typically, at least 10,000 shares or worth at least $200,000. The BIDS Alternative Trading System (ATS) lets parties anonymously trade large blocks of shares outside of the displayed markets so that the security’s price isn’t overly affected.
BIDS technologists have invented a new trading paradigm: conditional orders. This allows someone who wants to trade something to shop around for what they're trying to buy or sell in multiple places at the same time. BIDS defined and patented this workflow and the idea has subsequently been adopted by many trading systems in the US and is connected to 458 firms globally.
Behind the scenes are some mind-boggling technical innovations that allow the system to conduct half of a millisecond trading, over millions of transactions a day (the average daily volume in March 2021 was 89.6 million shares).
“At first, we thought that our system would be used by humans so we were aiming for about one second to perform a trade,” said Brett Vasconcellos, the company’s CTO. “Over the years, we’ve driven that number down through some ingenious technical development work and are now a thousand times faster.”
NOT YOUR AVERAGE START-UP
The story of BIDS isn’t that of your average start-up. First of all, it wasn’t birthed by youngsters in a garage. It was started by career veterans who disrupted the marketplace thanks to their experience. The technology undergirding BIDS is the result of many careers’ worth of time and knowledge – and a sense of steadiness, which characterizes the team to this day.
“When I joined BIDS in 2009, I felt like the new guy for a few years. We’ve since added more people to the tech team in both Calgary and NYC,” said Vasconcellos. “Most of the team has been with the company since the beginning. Part of my role is figuring out how to continue to build our bench strength as we grow into new markets. The developers and tech team love what they do, and we haven’t had to contend with losing people to attrition.”
A survivor of the dot-com boom in Silicon Valley, Vasconcellos knows from experience about the area’s high turnover rates as talented young engineers and other technical graduates jump from job to job to job – even such famously great-to-work-at titans as Apple and Google have median tenures of about a year. That kind of restlessness can make it difficult to run a young company when you factor in knowledge loss, onboarding, and productivity.
So far, Calgarians have demonstrated a different set of values. BIDS enjoys an exceptionally low turnover, which is essential for on-the-job learning and training developers undergo before becoming fully productive.
“We’ve found Calgary to be a great place to build our technology business, not just because of the quality of our people but because of their dedication to making us successful.”
“I feel really fortunate that we are able to recruit, retain and develop fantastic employees, whose low turnover has allowed us to build a really cohesive collaborative team.”
BIDS is always keeping an eye out for the right talent to join their team. A software development background is necessary, of course, but so is the ability to break down hard problems and work as part of a close-knit group.
“I'd hire someone straight out of university who’s the right fit; 20 years of experience writing Java isn’t necessary. Experience doesn’t matter as much as critical thinking and passion.”
BIDS Trading
GLOBAL TALENT STREAM
Securing high-tech talent can be a struggle in Calgary as there is such great demand (by reputable estimates, there are currently 2,000 open tech positions). So, many local employers, including BIDS, are taking part in Employment and Social Development Canada’s Global Talent Stream (GTS) program.
This program fast-tracks the visa process for certain in-demand professionals – including software designers, computer and information systems managers, and computer engineers – from around the globe in exchange for promising to train Canadians in these fields. The visas are valid for long enough to make permanent residency a possibility.
One of BIDS’ more recent hires, for example, is a Russian engineer who is a couple of years out of university and, according to Vasconcellos, is “passionate and dedicated and wants to prove himself.” Perhaps unexpectedly, Vasconcellos has found it easier to recruit globally than from within Canada, even though Calgary is a relative newcomer to international tech circles.
“International recruits see how close Calgary is to Banff and the Rockies and they get really excited by all the recreational possibilities. Once here, they’re blown away by our welcoming culture – they really see this as a land of opportunity.”
Vasconcellos notes that housing in the city is relatively affordable by global standards and that the quality of life is astounding to many newcomers. He also observes that the more people who relocate to Calgary – whether from abroad or from another province – the stronger the tech community and the deeper the talent pool will become.
A THRIVING TECH COMMUNITY
Vasconcellos moved to Calgary 12 years ago, and since then has watched as the city’s tech ecosystem has grown and changed.
“Finding interesting startups to work for or meeting angels and investors is so much easier now,” he said. He points to Rainforest and Startup Calgary as having provided BIDS with valuable networking opportunities. The best part of the community, though, is that the degree of separation between you and the precise person you want or need to speak to is remarkably small.
“We all know each other and, if we don’t, we're happy to help out with introductions and connections. We are a very supportive community.”
THE CALGARY ADVANTAGE
“I have a lot of university friends in Silicon Valley who have built tech companies,” said Vasconcellos, an MIT graduate who regularly counsels Calgarian entrepreneurs contemplating a move south. He concedes that there’s a great pool of talent in northern California, but notes that it’s concentrated within a cut-throat culture where employee-employer loyalty has traditionally been low and typical work days can be brutally long.
Calgary offers its similarly skilled high-tech workers a much different situation. Vasconcellos observes that, compared to the Valley, the culture in Calgary is more aligned to collaboration and working together toward a common goal, and less about outcompeting coworkers for a promotion.
“When the dot-com bubble burst, I moved to Whistler (to ski) and then I stayed,” he said. “I immediately noticed a big difference. Here, you get to know the neighbors. We talk about kids and biking and skiing, not what we do for a living or where we went to school. Life here is more balanced.”
It's also worth noting that, while housing in the Valley is at a premium – in March 2021, the median home price in San Jose was US$1.2 million – the average home in Calgary is currently CAN$505,452. Good public schools can be found in nearly every community, healthcare is reasonably priced and there are endless opportunities for world-class recreation.
Vasconcellos points out that another of Calgary’s big selling points is that, if the job that people come to the city for isn’t quite right for them, there are plenty of opportunities in town because so many companies of all sizes and at all stages of growth are currently looking for talented people.
The BIDS CTO also observes that the business landscape in Calgary is changing in exciting ways. While the last couple of years have been difficult for many people and companies, this hardship has also created opportunity: freeing up office space and talent, forcing companies to innovate and adapt and spurring investors to diversify. Ten years ago, he says, the technology community was small and niche and siloed – but, over the last few years, community builders have been connecting people and building support networks for start-ups, entrepreneurs, leaders and technologists of every kind. The city’s tech “unicorns” – Benevity and Solium Capital – have built further momentum. This is all fertile ground for nurturing the next generation of technology businesses in Calgary.
FINTECH CENTRAL
As one of Canada’s wealthiest, youngest, and most educated cities, Calgary is also one of the country’s most important global financial centres. Already in 2016, the financial services sector – which includes not just fintech but also banking, insurance and accounting and associated software companies – employed more than 30,000 Calgarians and made up more than 20 per cent of the city’s GDP. With a growth projection of 11 per cent year-over-year, the financial services sector’s digital transformation spend is projected to be CAN$1.5 billion in Alberta by 2024.
Recognizing that the sector will be one of the driving forces in the digital economy far into the future, the Alberta provincial government committed in its 2021 Budget to establishing a “concierge office” that will help fintech companies get started in the province. The province will also support a multi-year research project at the University of Calgary designed to reduce regulatory burdens on emerging fintech products and services.
WHAT’S NEXT
BIDS currently trades equities in the United States and Europe – and next year will expand into Canada.
“We’ve been here in Calgary since the beginning,” said Vasconcellos. “It will be nice to finally trade Canadian equities. It’s been a long time coming.” The company is setting its sights on farther-flung geographies, including Australia and Japan, as well as on Exchange Traded Funds (ETFs) and possibly derivatives.
The Calgary team is currently 20 people strong, but Vasconcellos anticipates steady growth on the heels of BIDS’ 2021 acquisition by Chicago’s Cboe Global Markets, which operates securities and derivatives exchanges around the world and is a long-time BIDS partner in one of the largest block trading platforms in Europe. “We’ll be at 30 people within the next few years. Our new ownership isn’t willing to settle for profitability – they want to take some risks and be aggressive in terms of expansion.”
Are you ready to make moves in Calgary’s tech scene, working with forward-thinking companies like BIDS Trading? Head to our Live Tech Love Life careers page and see what opportunities might be out there for you.