Alternative trading system IEX Group, which is famous for its efforts to combat abusive high-frequency trading (HFT), has raised another US$75 million in capital, as it aims to build an alternative stock exchange.
New York-based IEX says t it has closed a US$75 million round of funding led by Spark Capital, which includes various private equity investors and institutional investors, such as Franklin Resources Inc. The firm says that the financing will be used to pursue registration as a national exchange in the U.S., and to “explore other opportunities to leverage IEX’s unique brand, capabilities and market position.”
“Our intention from day one was to challenge the status quo by building a market that prioritizes the needs of traditional investors and issuer companies,” said IEX Group chief executive officer and co-founder, Brad Katsuyama. “We are encouraged by our recent growth, which has been driven by both investors and their brokers. This additional capital enables us to build and operate a world-class stock exchange.”
IEX reports that it has tripled its daily trading volume this year, and in recent weeks, volume has exceeded 100 million shares per day.
As part of this latest round of financing, Spark Capital’s general partner, Alex Finkelstein, will join IEX’s board. “The best way to truly improve the way that the financial markets work is by giving investors and brokers an opportunity to vote with their trades for a fairer marketplace,” said Finkelstein. “We believe in IEX’s vision of next-generation capital markets, and we’re confident that the IEX team will successfully change the way that Wall Street operates for the better.”
Other participants in this latest round of funding include Bain Capital Ventures, MassMutual Ventures, Cleveland Capital Management, TDF Ventures, and high-profile entrepreneurs, Jim Clark and Steve Wynn. Its existing investor groups also includes The Capital Group, Brandes Investment Partners, Greenlight Capital, Senator Investment Group, Pershing Square Capital, Maverick Capital, Scoggin Capital Management, Belfer Management, Kistler Associates and Third Point Partners.