Any financial transaction has to have a minimum of two counter-parties. The larger the transaction and the more sophisticated it is, the more difficult it is to find a corresponding counter-party. By leveraging technology, our financial institutions are able to assemble and express interest and needs, leading to transacting quickly across multiple products whether it be currencies, bonds, swaps, derivatives, or any other financial instrument. Capitolis is the capital markets marketplace platform that brings financial institutions, investors, and other parties together in a centralized location through automation at scale. Working with 100+ of the world’s largest financial institutions to transact in a counter-party marketplace, the platform drives new efficiencies and cost benefits without requiring the aging and disparate systems of banks to attempt to communicate with one another. Born out of the aftermath of the financial crisis of 2008 and new market need, Capitolis is backed by some of the largest financial institutions that are not only investors but also clients.
AlleyWatch caught up with Capitolis CEO and Cofounder Gil Mandelzis to learn more about the inspiration for the business, the company’s strategic plans, latest round of funding, which brings the total funding raised to $282.8M, and much, much more…
Who were your investors and how much did you raise?
We raised a $110M Series D at a $1.6B valuation, driven by the rapid emergence and market acceptance of its marketplace solutions. The fundraise was co-led by top fintech investors Canapi Ventures, 9Yards Capital, and SVB Capital. Existing investors in Capitolis include a16z, Index Ventures, Sequoia Capital, S Capital, Spark Capital, Citi, State Street, and J.P. Morgan. To date, Capitolis has raised $280 million.
Tell us about the product or service that Capitolis offers.
Our vision is to reimagine how capital markets operate. Capitolis is the leading capital marketplace that drives financial resource optimization for market participants.
Founded in 2017, Capitolis’ technology enables financial institutions to optimize their resources, execute seamlessly with new market participants, and achieve greater access to more diversified capital, all of which enable fairer, safer, and healthier capital markets.
What inspired the start of Capitolis?
The 2008-09 Global Financial Crisis (GFC) was a seminal and traumatic event that revealed serious issues in the global financial system and the roles of banks. Large global banks – long expected to be a source of strength and stability – instead were seen to be highly susceptible to negative risk events and their fates connected to each other’s well-being – or not – through webs of interconnectedness that were not fully appreciated. The public sector responded with a once-in-a-generation introduction of comprehensive new laws and regulations. The Dodd-Frank Act in the U.S., similar laws in other jurisdictions, international capital accords, and extensive and detailed regulations were all deployed to address virtually every aspect of how banks operate, including stricter capital, liquidity, and margin requirements, and an entirely new regime for oversight of swap markets.
This sweeping regulatory response has no doubt made the banking system safer. However, these reforms have reduced the availability of certain banking services, potentially limiting financing to meet borrower and investor needs. The result is a more resilient system, that has reoriented the balance of risk and reward, but constrained credit.
Capitolis exists to help solve the problem, match capital with investment, and reshape capital markets, all within the regulatory framework.
How is Capitolis different?
We blend a Silicon Valley mindset with Wall Street experience. We have seen what has gone right and what has gone wrong in markets. As a result, we aim to create a platform to promote sustainable financial and economic growth. Our team brings decades of experience in launching successful startups, technology, and financial services initiatives. In 2000, I founded Traiana, a post-trade processing company, which I sold to ICAP in 2007. My cofounder and Executive Chairman, Tom Glocer is the former CEO of Thomson Reuters.
We blend a Silicon Valley mindset with Wall Street experience. We have seen what has gone right and what has gone wrong in markets. As a result, we aim to create a platform to promote sustainable financial and economic growth. Our team brings decades of experience in launching successful startups, technology, and financial services initiatives. In 2000, I founded Traiana, a post-trade processing company, which I sold to ICAP in 2007. My cofounder and Executive Chairman, Tom Glocer is the former CEO of Thomson Reuters.
What market does Capitolis target and how big is it?
We serve the entire capital market ecosystem: Global banks, regional banks, fintechs, corporations, and institutional investors.
What’s your business model?
We help capital market participants do what they do best. Through our capital marketplace, we help banks expand origination and distribute risk and investment opportunities to other banks, asset managers, and other institutional investors. This widens and deepens the capital markets for many more investors.
What are your post-COVID office plans??
We are on-site in our offices in NYC, Tel Aviv, and London, and have been since September 2021. We believe we are better together, and innovation flows from the collaboration we have with each other.
What was the funding process like?
Our goal during the fundraising process was to welcome new investors that would bring a solid network and expertise to propel the next chapter of growth. We are so proud to welcome 9Yards and Canapi who bring just that.
What are the biggest challenges that you faced while raising capital?
Raising capital was not a primary objective. Our objective was to find the right partners to inform our value proposition and to further complement our existing investor base.
What factors about your business led your investors to write the check?
Let’s let our investors tell you directly:
Canapi Ventures Partner Dan Beldy shares, “We are thrilled to be partnering with Gil, Tom, and the entire Capitolis team as they build the next generation of technology infrastructure to help support the safe, efficient growth of the capital markets.
9Yards’ George Osborne comments, “At 9Yards Capital we’re impressed by Capitolis and the innovation it is bringing to the task of making our financial system more secure and our capital markets more efficient.”
What are the milestones you plan to achieve in the next six months?
We are scaling our capital marketplace – and continuing to invest in sales, marketing, and technology to support our growth.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Know your value proposition and make sure it solves a market need. The volatility in equity markets and rising interest rates will make financing increasingly more disciplined going forward. Focus on where you can add differentiated value and work to prove it.
Know your value proposition and make sure it solves a market need. The volatility in equity markets and rising interest rates will make financing increasingly more disciplined going forward. Focus on where you can add differentiated value and work to prove it.
Where do you see the company going now over the near term?
Our near-term focus is to further invest in our foundation to enable our scale, and our technology to further deliver on our unique value proposition.
What is your favorite outdoor restaurant in NYC?
Marea (the patio!), Central Park South.
