A lot of the startups you tend to hear about in the fintech world are building solutions for consumers and businesses. Today, a startup that aims to build technology to serve the biggest users of financial services – the big banks themselves and the way they move money – is announcing a massive funding round. to double that chance.
Capitolisis building new technology to address the way money moves in capital markets to increase speed and also simplify the way banks transact with each other, has raised 110 million dollars, a Series D that the US/Israeli company says values it at $1.6 billion. This latest round brings the total amount raised by the startup to $280 million.
Capitolis has worked with over 100 major banks and they say they have traded over $60 billion in ‘options’ from over 30 investors and optimized over $13 trillion in trades through their compression and upscaling” – all numbers are up from last year, When was the last time it raised funds?.
More directly, its technology was put to work under a well-timed scenario: last week they announced that their compression technology is being used by “a large network of global banks” to reduce their exposure to the Russian ruble – a move that involves a global move to sanctions on Russia and its financial institutions after the unprovoked attacks on Ukraine.
Building the tool to reduce risk in rubles was a first for the startup, and it was a tool built specifically after being approached for implementation by these banks.
“Capitolis has been able to mitigate these major risks and promote financial soundness and stability for the benefit of the entire capital markets system,” it said.
That urgent and high-profile aspect of Capitolis’ work underscores the startup’s position in the market and shows why it has attracted funding from investors of such caliber.
Canapi Ventures, 9Yards Capital, and SVB Capital (all prolific fintech investors) are leading the round, with a16z, Index Ventures, Sequoia Capital, S Capital, Spark Capital, Citi, State Street – to name a few. The press publishes a lot. More recently, as for the investigations it is undertaking into Russian oligarchs and the elusive, global movement of their money – and JP Morgan is involved as well.
Notably, with this grant, Jeffrey Goldstein, former Secretary of the Treasury Department of Homeland and Advisor to the Secretary of the Treasury of the United States; and George Osborne, former Prime Minister of the United Kingdom of the Exchequer, also join the board of Capitolis. (The two of them are senior advisors at Canapi and founding partners at 9Yards, respectively.)
The Russian ruble example highlights the challenge that Capitolis has identified and is addressing, and it is one that is somewhat endemic to any legacy financial service.
Capital markets focus on huge sums of money handled through foreign exchange, stock swaps and other large capital transactions typical of large banks; but at the end of the day, a lot of the systems the big banks use to do these transactions are based on legacy infrastructure, with money moving across multiple transaction points that can create delays and That causes costs.
Indeed, the issue is significant enough that when Russia’s withdrawal from the SWIFT financial network was first discussed, many assumed that in practice it would not be real quick.
While that may be the case, Capitolis’ solution highlights how you can take a new, different approach to starting the process and making it progress faster. It describes its solution as one that “allows banks, investors, and institutional customers to expand their reach through a collaboration platform and portal that connects opportunities with the business model.” democratize institutional capital, safely removing barriers that can constrain growth in the market.”
Democratization is the key word here, and it’s an interesting approach, building on other developments we’ve seen in the world of decentralized finance. Capitolis’ solution is based on proprietary algorithms whereby it allows institutions such as banks, hedge funds and asset managers to remove, move or create trading positions by collaborating on That position with other financial institutions, therefore, means a larger amount of capital and a larger line of credit.
“We are now moving into the next phase of Capitolis growth as we grow exponentially year on year and bring increasing innovation to capital markets.” Gil Mandelzis, CEO of Capitolis, in a statement. “BILLIONIn the years since its launch, the capital markets business has traded $60 billion+ options from over 30 investors. Capitolis has optimized over $13 trillion in transactions through compression & upscaling, serving over 100 financial institutions. Our vision is becoming a reality and we look forward to charging our market super in the coming months and years.” Of note: Mandelzis co-founded the company with Tom Glocer (a former Thomson Reuters executive who is now a director at Morgan Stanley and also invests in and co-support other fintech startups).
“We are excited to partner with Gil, Tom and the entire Capitolis team as they build the next generation of technology infrastructure to help support secure growth,” said Dan Beldy of Canapi Ventures. capital market efficiency”. “At Canapi Ventures, we focus on great leadership teams and category-defining innovations that help create a healthier, stronger, and more inclusive financial ecosystem. We look forward to partnering with the Capitolis team as they continue to grow and create a company of great value and impact. ”
Osborne added, in its own statement: “At 9Yards Capital, we are impressed by Capitolis and the innovation the company is bringing to ensure our financial system is safer and capital markets are more secure. Ours is more efficient.”