The prospect of a bear market may have retail investors frowning at their 401(k)s, but some of the firms powering Wall Street’s big banks and retail brokerage firms thrive when volatility and trading volumes climb.
Five companies with a growing behind-the-scenes presence in finance and enterprise software are on this year’s Fintech 50 list, recognizing America’s most innovative and influential fintech startups. Digital broker-dealer DriveWealth and identity verification firm Persona are both making their debuts on the list. Addepar, Carta and Trumid have all been selected for at least three years running and continue to grow while disrupting and digitizing portfolio management, capital tables and corporate debt trading, respectively.
Based on the Jersey City waterfront, an area dubbed “Wall Street West” because some financial institutions have moved back-office operations there over the last several decades, DriveWealth has been a big second-hand beneficiary of the pandemic retail investing boom. Its embedded software fulfills trades and allows users of apps like Block’s Cash App and MoneyLion to buy fractional shares of stocks. In February, DriveWealth acquired Crypto-Systems to begin applying its technology to crypto trading. In May, it poached Terry Angelos, Visa’s top crypto executive, to succeed founder Bob Cortright as its CEO.
As stock trading and other functions have moved online and onto smartphones, more startups have rushed into the crowded, but growing, identity verification and fraud prevention niche. Since launching four years ago, Persona, cofounded by 31-year-old CEO Rick Song, has quickly become an industry leader, thanks to its customizable verification process and efficient monitoring and case review configuration. Its 500 enterprise customers include Block (formerly Square), where Song previously worked as an engineer, and Robinhood.
Carta is a mainstay on the Fintech 50 and now manages cap tables (tracking share ownership and options) for 29,000 startups, up nearly 50% since last year. Its $185 million in revenue came mostly from subscription fees from these customers, and it also received commissions on $7 billion worth of secondary market transactions on its CartaX platform. While the venture market is cooling this year, CEO Henry Ward expects this secondary market to represent a growing share of Carta’s revenue–with the IPO market stalling out, CartaX presents a way for employees and early investors to cash in some of their holdings.
New York-based Trumid also remains on the list after its daily transaction volume has grown 83% to $2 billion in the last year, boosted by a new partnership with JPMorgan that began last December. Rounding out the group, Addepar doubled its valuation to $2.17 billion last June and helps wealth managers track investments in alternative assets as well as stocks as clients look for refuge from the public market’s declines this year.
Here’s more on what’s new for these companies making investing and financial services in Wall Street and Silicon Valley more nimble in 2022.
Trumid
Electronic corporate debt trading platform allowing bond buyers to make high-stakes round lot trades on an anonymous basis or negotiate with each other on its attributed trading protocol. JPMorgan joined its trading platform and strategic network as a partner in December 2021. Citi and Goldman Sachs are also among its 643 onboarded institutions.
Headquarters: New York, New York
Funding: $650 million from Point Break, Motive, Dragoneer and others
Latest valuation: $2.4 billion
Bona fides: Average daily trading volume in April was $2 billion, up 83% year over year.
Founder and Co-CEO: Ronnie Mateo, 48, founded it in 2014, recruited former Lehman Brothers credit trader Mike Sobel to be president and now co-CEO.
Read the whole article on forbes.com