Broadway Technology’s new office looks out over a wide lawn that stretches to the shore of Lake Austin, close by the Pennybacker Bridge.
It’s an idyllic setting for a company that builds software that helps drive the blistering pace of some of the world’s financial markets.
The 50-person company, which also has a “co-headquarters” office in New York, develops and sells software and services to some of the giants of global finance.
Goldman Sachs Group Inc., one of the most astute players on Wall Street, is a key customer. So is Paris-based BNP Paribas, a major international bank and investment company.
Broadway’s customer list “is like a who’s-who of finance,” CEO Tyler Moeller said.
After eight years in business, the company has a strong beachhead in financial trading software, but it wants to expand rapidly with new products and services while adding to its market in Europe and, eventually, Asia.
In December, the company announced a round of strategic investment that included Goldman and BNP to support its growth plans. It expects to double its workforce during the next 18 months and triple the size of its 30-employee Austin office.
“There is a huge amount of innovation that we want to do,” said Chief Operating Officer Jonathan Fieldman. “And this investment is going to fuel that. This is a $30 billion industry that we have targeted, and 50 people isn’t quite enough.”
So how did a small software company come to sell crucial software to some of the giants of finance?
The roots of Broadway go back to Austin’s Trilogy Software Inc. and one of its subsidiaries, carOrder.com, which expanded aggressively in the late 1990s before flaming out in 2001. Moeller and Joshua Walsky, a co-founder and chief technology officer of Broadway, joined carOrder out of college and helped build a software system that could handle high-volume car sales online. The business strategy didn’t work out — Detroit hated it — but the software was good.
After carOrder closed, Moeller headed to New York in the summer of 2001 to join a few friends who had formed a small firm to do computer-based trading in U.S. Treasury securities. The job required substantial software development and Moeller signed on as both a trader and software developer. Walsky followed him several months later.
“We were very small,” Moeller recalled recently. “There were four of us, and we needed to come up with ideas fast and get them into the market fast. I quickly realized that a lot of the software we had done (for carOrder) was incredibly applicable to the finance space.”
They needed software that could plow through massive amounts of financial data and find trades at lightning speed, while routing orders, tracking trading positions, calculating profit and loss, and working well with more specialized trading applications programs.
They credit their software training — Moeller studied at MIT and Walsky at Cornell — along with their carOrder and trading experiences for giving them the insight they needed to build software that worked for trading operations.
They traded Treasury securities successfully for two years. But things changed in 2003 when a big new client required their full-time attention as software developers. That’s when they started Broadway.
The client was Countrywide Securities, a branch of the former Countrywide Financial, which wanted a new computerized trading operation set up and supported by new software in six months. Moeller and Walsky set to work, using the software they had already developed as a foundation. They met the deadline, and Countrywide’s trading desk went into operation in early 2004.
Then came an even bigger job in 2005. Paris-based BNP wanted to dramatically expand its global foreign exchange trading operation, and it needed extensive new software to do it.
“We were so small, we couldn’t build a new FX (foreign exchange) system” from scratch, Moeller said. “We had to take the components on our existing system and change them and make that more generic (to handle different types of investments) That is what we do today.”
Walsky spent most of two years living in Paris and London to make sure the implementation of the new system went well.
The BNP project helped lead to Goldman Sachs.
“Goldman wouldn’t have bought it if we hadn’t had a great reputation.” Moeller said. “Once we did that deal (with Goldman), we no longer had to prove ourselves in winning sales.”About the time of the Goldman deal, Moeller and Walsky knew they would have to expand their programming operations outside Manhattan to attract the top-tier programmers.
That included people they had worked with at Trilogy — and they knew that the biggest pool of those people was in Austin.
“We needed more people, and we were building for global deployments,” Moeller said. “We looked around and said, New York is a tough place to hire really good technology people. You don’t have a lot of entrepreneurial people. It is not the same spirit that you have down here.”
The company has been profitable throughout its eight years of operation, but the recent investment helped it expand faster.
That expansion includes new product lines covering other financial products, including derivatives such as credit default swaps; new markets; and expanded customer support.
For a company that deals with global finances, Broadway keeps its own private. Officials say that the company is profitable and that revenue has grown by nearly 50 percent a year over the past four years.
Industry analyst Adam Honoré with the Aite Group consulting firm said he likes Broadway’s team and its capabilities, but he cautions that it plays in a relatively small universe.
“We estimate that there are only 140 firms doing high-frequency trading globally, so it is not that big.”
The analyst said Broadway has the potential to expand into related financial fields with more customers.
“As long as they continue adding those pieces of business, they will be fine,” Honoré said.
For Moeller and Walsky, the key to growing a software business is part of what they learned at Trilogy — hire talented, highly motivated people who can move fast and innovate quickly.
“People are the single-most important asset you can have, more than anything else,” Moeller said. “You can solve any problem you have if you have the right group of people.”