Alpaca Secures $52M in Series C Funding to Expand API Brokerage Platform into New Markets
The U.S. stock market continues to attract global investors, thanks to its impressive size and liquidity. However, trading stocks on U.S. exchanges can pose challenges for international investors. A San Mateo-based startup, Alpaca, has recognized this gap and is leveraging it by providing an API that enables financial services firms to offer trading services to their customers.
Alpaca’s Growth and Funding Success
As of now, Alpaca boasts over 5 million brokerage accounts and has partnered with more than 200 financial clients across 40 countries. Recently, the company announced it has raised $52 million in a Series C funding round aimed at expanding into new international markets, including the Middle East, Europe, and Asia.
Investors in the Series C Funding Round
The funding round saw participation from a mix of new and returning investors, such as:
- Derayah Financial
- 850 Management
- National Investments Company Kuwait
- Unbound
- Portage Ventures
Expanding Global Presence
Alpaca recently opened a new office in New York and plans to utilize the funds to acquire additional regulatory licenses similar to those it holds in the U.S., Japan, and the Bahamas. Co-founder and CEO Yoshi Yokokawa emphasized the significance of this funding, stating, “This is really a catalyst to build a global infrastructure, transitioning from a U.S.-only platform.”
Product Development and Market Strategy
With the fresh capital, Alpaca aims to:
- Develop new products
- Add international offerings such as European and Asian equities
- Support 24/5 trading of U.S. stocks
This latest funding round increases Alpaca’s total funding to $170 million.
Founders and Company Vision
Founded by Yoshi Yokokawa, a former investment banker, and Hitoshi Harada (CPO), Alpaca initially focused on providing software that financial services firms and fintech companies could use to facilitate trading. Yokokawa mentioned, “We needed to create a globally functioning infrastructure that would enable platforms similar to Robinhood or Wealthfront for international markets.”
Innovative Offerings and Partnerships
Since its inception, Alpaca has expanded its offerings to include:
- Stocks
- ETFs
- Options
- Fixed income
- High-yield products in USD for IRA accounts
Recently, Alpaca partnered with Kraken to allow users to trade U.S. stocks and ETFs in select states.
Performance and Competitive Landscape
The Series C funding comes approximately 18 months after Alpaca’s Series B extension in October 2023. Since then, the company has reported:
- Revenue and assets under custody have tripled
- Trading volume has quadrupled
Alpaca has also become a fully self-clearing broker-dealer with DTCC membership, which allows it to manage trade clearing and settlement processes in-house.
Market Positioning and Competitors
Yokokawa identifies Interactive Brokers as a key competitor, particularly regarding its international reach and technology. However, he believes Alpaca’s modern solutions resonate more with new banks looking to enhance their offerings for customers.
Currently, Alpaca employs around 200 people, many of whom work remotely from diverse locations worldwide. For more information about Alpaca and its services, visit their official website.
