INSUBCONTINENT EXCLUSIVE:
Stock trading app Robinhood is valued at $7.6 billion, but it only operates in the U.S
Freshly funded fintech startup Alpaca does the dirty work so developers worldwide can launch their own competitors to that investing
brokerage apps on top for free
It has already crossed $1 billion in transactions within a year of launch.The potential to power the backend of a new generation of fintech
apps has attracted a $6 million Series A round for Alpaca led by Spark Capital
Instead of charging developers, Alpaca earns its money through payment for order flow, interest on cash deposits and margin lending, much
me.Alpaca co-founder and CEO Yoshi YokokawaHailing from Japan, Yokokawa followed his friends into the investment banking industry, where he
worked at Lehman Brothers until its collapse
Watching clients struggle to quickly integrate new technology revealed the lack of available developer tools
By 2017, he was pivoting the business and applying for FINRA approval
Alpaca launched in late 2018, letting developers paste in code to let their users buy and sell securities.Now international developers and
Alpaca works with clearing broker NTC, and then marks up margin trading while earning interest and payment for order flow
It also offers products like AlpacaForecast, with short-term predictions of stock prices, AlpacaRadar for detecting price swings and its
MarketStore financial database server.AlpacaForecastThe $6 million from Spark Capital, Social Leverage, Portag3, Fathom Capital and
Zillionize adds to $5.8 million in previous funding from investors, including Y Combinator
The startup plans to spend the cash on hiring to handle partnerships with bigger businesses, supporting its developer community and ensuring
compliance.One major question is whether fintech businesses that start to grow atop Alpaca and drive its revenues will try to declare
independence and later invest in their own technology stack
APIs, but other services as well that distract it from fostering a robust developer community, Yokokawa tells me
Alpaca focuses on providing great documentation, open-source contribution and SDKs in different languages that make it more
rather than a chore or something only done a few times a year
Lender SoFi and point-of-sale system Square both recently became broker dealers as well, and Yokokawa predicts more and more apps will push
up with all the new opportunities in financial services, from cash management and cryptocurrency that Robinhood already deals in, to
security token offerings and fractional investing
that Alpaca will one day power broader access to the U.S
stock market back in Japan, noting that if a modern nation still lags behind in fintech, the rest of the world surely fares even worse
