Citi, JPMorgan and State Street back fintech startup Capitolis


2/2
© Reuters. FILE PHOTO: A woman walks past a Citibank logo displayed outside the Citibank Plaza in Hong Kong

2/2

By Anna Irrera

LONDON (Reuters) – JPMorgan Chase & Co (N:), Citigroup Inc (N:) and State Street Corp (N:) have invested $11 million in Capitolis, a New York-based technology startup that seeks to help banks use capital more efficiently, the companies said.

Capitolis, which was founded by Gil Mandelzis, a former senior executive at ICAP (LON:) and former Thomson Reuters Chief Executive Tom Glocer, will use the funding to grow its team and operations, the startup said. The company did not disclose its valuation.

Capitolis expects its team to grow to 90 people by the end of the year from 50 at start, Mandelzis said.

Founded in 2017, Capitolis has developed software to improve liquidity in capital markets by allowing banks to rapidly source capital needed for trades from other financial institutions with large balance sheets.

Regulations implemented following the 2008 financial crisis have increased the amount of capital banks must post as collateral for risky trades making it more costly for them to participate in some markets.

“Banks are constrained by the costs of capital, but there is a lot of capital in the world looking for returns,” Mandelzis said. “We are allowing the banks to tap into infinite sources of financing.”

Capitolis’ technology also allows banks to reduce the notional value of their derivatives portfolios by replacing multiple offsetting derivatives contracts with smaller residual trades. This frees up capital but is often done manually with spreadsheets and paperwork.

READ  China/US trade war: weaponising Wall Street

To date the company says it has eliminated $5 trillion in overall positions for more than 50 financial institutions including JPMorgan, Citi and State Street.

“We are happy to support them as they invest and build technology that helps free up capital creating greater efficiencies within the global markets industry,” Troy Rohrbaugh, Head of Global Markets at JPMorgan, said in a statement.

Capitolis’ existing investors include Spark Capital, Index Ventures and Sequoia Capital.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here