Capitolis, which makes technology for capital markets players such as investment and merchant banks, has closed on a $90 million Series C funding round led by Andreessen Horowitz (a16z).
The financing included participation from existing backers Index Ventures, Sequoia Capital, S Capital, Spark Capital, SVB Capital, Citi, J.P. Morgan and State Street, and brings Capitolis’ total funding to date to $170 million. SVB Capital and Spark Capital co-led a $40 million Series B for the company in November 2019.
Capitolis CEO and founder Gil Mandelzis said the startup's mission since its 2017 inception has been to “fundamentally re-imagine how the capital markets operate" after the last financial crisis and the "bold steps taken by regulators" in its aftermath.
The company says that its advanced workflow technology and proprietary algorithms allows banks, hedge funds and asset managers to eliminate, move or create trading positions by collaborating with other financial institutions. That results in freed up capital, open credit lines and access to capital from a bigger pool of sources, the company claims.
Ultimately, Capitolis' network software is designed to help financial institutions optimize their balance sheets and reduce risk.
Seventy-five financial institutions currently use the Capitolis platform. The company says it grew its revenue run rate by "sixfold" in 2020. Since 2019, Capitolis has experienced a 230% increase in the number of users of its platform. To date, the startup says it has optimized $9 trillion in terms of gross notional balances.
Alex Rampell, partner at a16z, said that his firm believes that what sets Capitolis apart from other financial services players “is the sheer scale of management’s ambition and the substantial talent, technology and capital milestones they have achieved.”
The New York-based company says it plans to use its new capital toward product development and to boost its customer support and sales staff. It plans to increase its headcount from 90 today to over 150 by year’s end.
Capitolis currently covers foreign exchange products and equity swaps. It says it could expand into others if there is client demand.
This article was updated post-publication with additional information from the company