Sept 3 Upstart trading venue IEX Group said on
Wednesday it has raised $75 million from a wide range of
investors in a recent round of financing to help fund its
efforts to become a registered U.S. stock exchange and to
explore other opportunities.
IEX has operated since October as an alternative trading
system, which is like a stock exchange, but cannot offer
corporate listings and generally has less regulatory burdens.
The New York-based company aims to become a stock exchange
and has grown quickly since being featured in author Michael
Lewis' book "Flash Boys: A Wall Street Revolt," as a place for
brokers to trade stocks without worrying about being "front-run"
by other traders with faster technology.
"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 Chief Executive 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
IEX only accepts funding from so called "buy-side" firms -
institutional investors and fund companies, as well as
individuals and private equity. The company said its latest
round of financing was led by boutique venture capital firm
Spark Capital, and included Bain Capital Ventures, MassMutual
Ventures, which is the venture capital arm of Massachusetts
Mutual Life Insurance Company, and investment manager Franklin
As part of the financing deal, Alex Finkelstein, a general
partner at Spark, which has invested in firms like Twitter and
Wayfair, will join IEX's board of directors, the company said.
Other participants included private investment firms
Cleveland Capital Management and TDF Ventures, as individual
investors Jim Clark, who cofounded computer services company
Netscape, and Steve Wynn, head of casino developer and operator
Investors in past rounds of IEX financing have included 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.
In June, IEX hired John Ramsay, formerly the acting director
of the Securities and Exchange Commission's Division of Trading
and Markets, to help pursue registration as a national
securities exchange. If it is successful, IEX
will compete against 11 other stock exchanges, including those
run by Nasdaq OMX Group, BATS Global Markets, and
Intercontinental Exchange Inc.
(Reporting by John McCrank in New York; Editing by Bernard Orr)