Investing apps help anyone access the stock market to make trades. Alpaca, a San Mateo-based startup, offers stock and crypto brokerage trading services via API that enables investing fintech companies and others to embed this functionality into their apps. Today, the startup announced it has secured $15 million in the form of a convertible note from Japanese financial firm, SBI Group.
The strategic investment, which brings the Y Combinator-backed startup‘s total raised to $120 million since its inception in 2015, will allow Alpaca to speed up its expansion in Asia, CEO of Alpaca Yoshi Yokokawa told TechCrunch.
The startup’s B2B2C model serves more than 5 million end-users via over 100 corporation partners in 30 countries, including Saudi Arabia, Indonesia, Thailand, and India, Yokokawa said, adding that nearly 20% of its clients are based in Asia, primarily Southeast Asia. Alpaca currently has two clients in Japan — SBI and Woodstock– but expects a few more users from Japan after the strategic investment from SBI, which has more than $2.6 billion in assets under management in venture capital and private equity investment.
“SBI Group has the biggest network amongst financial institutions in Japan and has been expanding to Southeast Asia recently,” Yokokawa said.
Thailand-based digital bank Dime and Singaporean investment app Syfe use Alpaca’s brokerage platform to offer U.S. stock trading services to their end users, Yokokawa noted. On top of that, the outfit recently received a broker-dealer license from Japan’s Financial Services Agency. The permit allows Alpaca to offer U.S. stock trading services to enterprises’ end users in Japan.
Alpaca plans to launch new products and services for the U.S. business, such as options, bonds, mutual bonds, and individual retirement account accounts, Yokokawa said.
Since its last funding, a $50 million Series B in 2021, the company’s revenue has increased by 15 times, and the number of investing apps on its platform has grown four times to around 150, Yokokawa said. He declined to provide the baseline of the revenue, which the company generates via a variety of methods, including transactions from trading fees, foreign exchange fees, SaaS recurring, and more. The number of staff has reduced to 150 from 175 people last year to operate the company efficiently, Yokokawka told TechCrunch.
When asked about its crypto API that Alpaca launched in October 2021, two months after its Series B round, its crypto business still does not produce significant revenue. Still, the company expects the crypto API would grow as the crypto market recovers, the CEO said. Alpaca’s crypto API enables businesses and developers to trade crypto and stocks and build apps that offer crypto and stock investing services in one API.
Alpaca has built a community for developers. The CEO said tens of thousands of monthly active developers can try out Aplaca’s product for free, writing sample code to interact with its brokerage platform via API.
Its previous backers include Portage Ventures, Spark Capital, Tribe Capital, Social Leverage, Horizons Ventures, Unbound, Elefund, Positive Sum and Y Combinator.