For all the recent turmoil, the US stock market is extremely attractive to investors around the world simply because of its size and liquidity. However, it remains extremely difficult for investors in other regions around the world to trade stocks on US exchanges. The San Mateo-based startup called Alpaca is quietly taking advantage of the opportunity by allowing financial services companies to sell APIs to consumer user bases.
Today, Alpaca serves more than 5 million securities trading accounts and claims it has over 200 financial clients in 40 countries. Based on its traction, the Alpaca said Wednesday it raised $52 million in the Series C funding round to expand to more foreign markets, including the Middle East, Europe and Asia.
Investors in the round include new backers such as Derayah Financial, 850 Management, National Investments Company Kuwait, Unbound and Portage Ventures.
The San Mateo-based startup has just opened a new office in New York and is planning to use fresh cash to obtain more regulatory licenses in various regions, similar to the Bahamas that it already has in the US, Japan and its co-founder and CEO Yokakawa.
” [recent] Funding for us is extremely important. Because this is very important because it’s not a fixed US company or platform, but a catalyst for going to global infrastructure,” Yokokawa said.
Alpaca will also use its revenue to develop new products, add non-US products such as European and Asian stocks, supporting 24/5 trading of US stocks.
Series C is increasing the company’s total funding to $170 million.
Founded by a former investment banker in the US and Japan, Yokogawa Kawakawa, and the former CPO (CPO), Alpaca has begun selling software that financial services companies and Fintechs can connect to investment groups’ electricity trading and use for electricity trading.
“First, we had to create an infrastructure that worked globally. [in 2018] This will allow people outside the US to create platforms similar to Robinhood and Wealthfront that comply with local regulations and context. [ultimately]As you know, money and securities flow to the US if you want to access US products. That’s what we do. ”
The company has since expanded its offering stocks, ETFs, options, bonds and high-yield products to be included in the US dollar in IRA accounts. Alpaca recently partnered with Kraken to allow Crypto Exchange users to exchange US stocks and ETFs in some states.
Series C will take place approximately 18 months after Alpaca secured Series B expansion in October 2023. Since then, Yokomasa has tripled the revenue and assets of detained startups, and its trading volume has quadrupled. It has also become a completely self-transparent broker dealer with DTCC membership and the CEO has made it possible to handle all trade clearing and settlement processes in-house, including risk management and compliance.
Yokokawa sees interactive brokers as their closest competitors in terms of international presence and technical capabilities. However, he says the main difference is that interactive brokers were founded in 1978 and lead to technology developed based on their legacy systems.
“If a new bank wants to improve its products for its customers, it prefers to work with modern partners as it wants modern solutions. So, this is how we are currently gaining market share.
Alpaca currently employs around 200 people, most of whom work remotely from various locations around the world.
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