In the rapidly evolving financial technology landscape, traditional trading mechanisms have long struggled to optimize transaction efficiency and maximize value for institutional investors. The complexity of matching trades in real-time while minimizing market friction has been a persistent challenge for electronic capital markets. OneChronos transforms this paradigm by leveraging advanced auction theory and sophisticated algorithms to create Smart Markets that fundamentally reimagine trade execution. Through its innovative matching technology that uses combinatorial auctions to identify bilateral and multilateral trades, OneChronos has created an alternative trading system (ATS) that has quickly become the fastest-growing off-exchange U.S. equities trading venue, facilitating an average of more than $4.5B in daily trading volume. The company plans to bring its unprecedented speed, scale, and computational complexity to new Smart Markets for European equities and foreign exchange shortly. It also plans to bring the technology to non-financial trading markets.
AlleyWatch caught up with OneChronos Cofounder and CEO Kelly Littlepage to learn more about the inspiration for the business, the company’s strategic plans, latest round of funding, and much, much more…
Who were your investors and how much did you raise?
We recently announced $32M in expansion capital led by Addition. This follows our $40M Series B round in September 2023, also led by Addition.
Tell us about the product or service that OneChronos offers.
OneChronos designs and operates marketplaces known academically as Smart Markets. These markets use mathematical optimization to find trading outcomes that maximize individual and collective profit. Matching buyers and sellers is rarely a zero-sum game, and Smart Markets will change how we trade goods and services throughout society, bringing massive efficiencies and a level of fairness to the world economy.
OneChronos’ first market is a U.S. equities trading venue, OneChronos ATS. We are launching additional venues based on the same technology for European equities and foreign exchange. Looking beyond capital markets, we see a future where agentic AI plays a significant role in the global economy and in which Smart Markets are the bazaar where AI agents do business. OneChronos is working to build that future and leverage advances in machine learning and artificial intelligence to design and operate Smart Markets at scale.
What inspired the start of OneChronos?
I met my cofounder, Stephen Johnson, in middle school, and we quickly became lifelong friends after bonding over our shared interests in math, computers, and science. We went to college on opposite coasts but never lost touch. We ended up in different industries but in similar technical domains. I started my career as a quant in electronic trading, and Steve in distributed systems and information security. We discussed how fragmented capital markets were distributed systems, but not being formally treated as such, resulting in massive technology costs and missed trading opportunities. Caltech exposed me to auction theory and Smart Markets, and we also discussed how sophisticated auctions in markets like display advertising were compared to capital markets. Unfortunately, operating Smart Markets at capital markets speed and scale wasn’t a technical possibility then. That changed in 2015 when it became clear that the advances in AI and ML that made AlphaGo possible applied to Smart Markets as well and that we had both a technical path forward and a tremendous opportunity to evolve capital markets.
How is OneChronos different?
Traditional capital markets match buyers and sellers using a double auction that matches the highest-priced buyer against the lowest-priced seller. We design and operate Smart Markets that allow buyers and sellers to express their wants and needs in a way that allows us to identify bilateral and multilateral trades that can result in individually and collectively better outcomes. The work behind the 2020 Nobel Prize in Economic Sciences, awarded to Bob Wilson and Paul Milgrom, laid the foundation for what we’re doing. Our first product, OneChronos ATS, validated the approach in capital markets. We’re accumulating hundreds of thousands of data points daily on how Smart Markets can produce mutually better economic outcomes than the limit order book—an auction format dating to antiquity.
What market does OneChronos target and how big is it?
Our current market is U.S. equities, where we currently process over $4.5B in daily trading volume. But this is just our starting point. We see massive opportunities across capital markets and beyond – including compute, energy, and transport markets where traditional trading mechanisms leave significant value untapped. We’ve facilitated over $500B in institutional securities transactions since launching in 2022.
What’s your business model?
Our business model is operating Smart Markets powered by our combinatorial auction technology. We generate revenue by facilitating trades and optimizing for institutional measures of trade quality. Our platform integrates with existing market infrastructure, allowing firms to access our enhanced execution capabilities through their current workflows.
How are you preparing for a potential economic slowdown?
Economic slowdowns can mean less liquid and efficient markets. In such an environment it’s even more important that marketplaces reduce friction, enable trade, and produce mutually beneficial economic outcomes for participants. So we can best prepare by doing exactly that, which is what we’re already focused on every day.
What was the funding process like?
We’re fortunate to have the backing of fantastic capital partners like Addition, Green Visor, and Y Combinator. We’re also fortunate to have explosive growth. Though we did not need capital to continue down our current path, it became clear to all that there’s an opportunity to scale even faster while going after new and emerging markets, which we’re excited to share more about next year.
What are the biggest challenges that you faced while raising capital?
We’re a deep tech company that went after a nuanced market for its first product. Either of those factors individually can make for a challenging raise. The metrics tell the story these days, but our early backers had to roll up their sleeves and understand the thesis, which, given the nuance, was a big ask. We are very grateful for those who did.
What factors about your business led your investors to write the check?
First and foremost, our proven execution and success in equities – our current average daily trading volume is 5.5x our November 2023 average. This along with our unique technology advantage, as we’re the only platform applying combinatorial auctions to capital markets at millisecond speeds. Finally, our expansion potential – we’ve proven our model in equities, and investors see that our technology can be applied to optimize trading across multiple markets and industries.
What are the milestones you plan to achieve in the next six months?
In the next six months, we’re planning to use these funds to accelerate growth in our core equities business, launch Smart Markets for new asset classes and geographies, and start exploring opportunities beyond traditional capital markets.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Fundraising is neither the automatic creator nor byproduct of success. Focus on unit economics and building a good business that doesn’t rely on it. And if your business needs startup capital, push yourself to start with what seems an impractically small amount. The thought process it leads you down is itself valuable.
Where do you see the company going in the near term?
We’re laying the groundwork to create new marketplaces in industries where there’s consistent demand to acquire multiple different assets – areas like compute resources, energy markets, and transportation. Our vision is to transform how goods and services are traded across society using AI and advanced market design.
What’s your favorite fall destination in and around the city?
Prospect Park. Every season offers a different experience, but golden leaves and cool weather make for excellent runs.
