A group of investors led by Reuters has injected $45 million of capital into Pedestal Inc., the online trading platform.
Reuters and Pedestal have also cut a marketing and product development deal under which Reuters will provide information and analysis to Pedestal customers while marketing the Pedestal platform globally to its subscribers.
Reuters invested $35 million in Pedestal. Deutsche Bank and Battery Ventures each invested $5 million.
John Lewis, a spokesman for Pedestal, said the deal is more than just an investment. "This is a strategic investment in a long-term partnership. There are a lot of strategic reasons for us to get together," he said.
Mr. Lewis said the two companies' services are complementary. Reuters supplies news, information, data, and analytical tools on the mortgage-backed securities market, and Pedestal operates a trading platform.
Though Pedestal's platform now handles trading of whole loans (both residential and some commercial/multifamily), servicing rights, and mortgage-backed securities, the company plans soon to offer trading of asset-backed securities and collateralized mortgage obligations.
Mr. Lewis added that his company is strong in the U.S. mortgage market and Reuters has a strong presence overseas.
"We can help them expand their reach in the U.S. market, and they can help us expand internationally," he said.
A spokesman for Reuters said, "Our vision is to make financial markets work on the Internet, and this fits very neatly for the fixed-income market for mortgage-related products."
He added that Pedestal could link up with Radianz, a joint venture started last week between Reuters and Equant. Radianz is an extranet, or private network, accessible to authorized users via the Internet, which links companies in large financial markets.
The deal is Pedestal's third round of venture capital funding. It raised $5 million in April 1999 and $10 million in November from Battery Ventures.