#558
A New Breed of Giants?
Published:
Sep 21, 2024
Author:
Sarah Parsons Wolter
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Citadel and Millennium traders are catching the startup bug, leaving behind their high-stakes trading pods to launch their own hedge funds. This year alone, over 20 traders have reportedly left – or are expected to leave – Citadel and Millenium to raise their own funds, following the path paved by Bobby Jain, Diego Megia, and Todd Barker, who collectively raised $14b this year.
This surge of trader-turned-founders echoes the rise of Julian Robertson’s "tiger cubs," former Tiger Management traders who launched legendary firms like Lone Pine Capital and Viking Global Investors. Now, Citadel and Millennium are incubating the next generation of hedge fund founders, where their high-pressure "pod" structure is training traders to thrive when they set off to launch their own funds.
This trend isn’t unique to hedge funds. A similar trend is unfolding across successful fintech startups, where employees from major players like Mercado Libre, Square, Rappi, and Stripe are striking out on their own. Recent research published in Forbes shows that 37 Mercado Libre alumni, 32 from Square, 28 from Rappi, and 25 from Stripe have gone on to launch fintech companies.
Whether it's traders from top hedge funds or employees from fintech giants, the lesson is clear: elite firms are fertile breeding grounds for the next generation of entrepreneurs. The PayPal Mafia might need to scoot over—there’s a new mafia in town.
Portfolio News
Axoni sells post-trade technology business to LSEG - Axoni announced the sale of its Veris post-trade processing business and related intellectual property to the London Stock Exchange Group (LSEG), a global provider of financial markets data and infrastructure. The transaction remains subject to closing conditions and is expected to complete in Q4 2024. Axoni built and operates the Veris network, a post-trade reconciliation and lifecycle management platform for equity swaps. Read more
Octane announces $500m forward-flow deal with AB CarVal - Octane will leverage this funding to capitalize on the significant momentum it has been seeing in its business. This transaction continues to diversify Octane's large existing base of capital providers and is a testament to the company's strong credit performance. Read more
TransUnion and MoneyLion partner to deliver powerful personalized financial products and services - Through the partnership, MoneyLion will utilize TransUnion’s industry-leading data and credit solutions as part of its hosted credit-decisioning platform and dynamic consumer finance experiences. This integration will ensure that the most personalized and relevant financial offers are presented to consumers, enhancing their overall experience within the MoneyLion ecosystem. Read more
New MoneyLion financial literacy report sheds light on the 2024 financial landscape for U.S. Hispanics - Coinciding with the start of Hispanic Heritage Month on September 15, this report, conducted by The Harris Poll and commissioned by MoneyLion, offers a comprehensive exploration of financial literacy and personal finance attitudes of the U.S. Hispanic community. Read more
Flutterwave expands remittances offering in Malawi with Send App launch - In September 2024, Flutterwave received an ‘International Money Transfer Operators’ (IMTO) license from the Reserve Bank of Malawi, bringing the firm’s offering into the country. Building on this, Flutterwave has now launched its flagship remittance product, Send App by Flutterwave, in Malawi, which enables residents and Malawian communities across the UK, US and Europe to send money with favorable exchange rates to their families and friends. Read more
A New Breed of Giants?
Hedge fund titans breed a $14b pack of startup cubs - With the multistrategy hedge fund titans closed to outside cash amid a dearth of talent able to manage their money, Citadel and Millennium traders are seizing the chance to go it alone. And investors are backing them with an avalanche of assets. Read more
The rise of fintech families - 15 fintech companies, dubbed “Fintech Families,” have produced an outsized number of founders. These companies, all launched after 2000 and with revenues exceeding $250m, have collectively spawned nearly 3,000 founders worldwide. Read more
Industry News
JPMorgan in talks with Apple to take over credit card from Goldman - A deal would further tie together America’s biggest bank and one of the largest technology companies in the world. JPMorgan already offers Chase customers deals on Apple products and pays the company whenever one of its millions of card customers uses Apple Pay. Landing the deal would grow Chase’s card business— already the biggest in the country—while bringing along a loyal base of Apple customers to whom it can pitch more financial products. Read more
AI risks making some people ‘uninsurable’, warns UK financial watchdog - Giving the example of “AI-enabled hyper-personalisation of insurance”, Rathi said this could benefit many consumers but also warned that it “runs the risk of rendering some customers ‘uninsurable’, or even potential discrimination”. Read more
BlackRock and Microsoft plan $30b fund to invest in AI infrastructure - BlackRock is preparing to launch a more than $30b artificial intelligence investment fund with technology giant Microsoft to build data centers and energy projects to meet growing demands stemming from AI, people briefed about the matter said. Read more
Fintech giant Revolut said to be planning stablecoin - A spokesman for Revolut said the company wants to expand its crypto offerings, taking a compliance-first approach to become a safe harbor for the entire crypto community. Revolut, which snagged a U.K. banking license in recent months, would join other entrants to the stablecoin sector including PayPal, Ripple and BitGo. Read more
Firms jostle to sell alternative assets to wealthy investors - The financial firms are all trying to hitch their wagons to a fast-growing area of the market that can generate hefty fees. They are also adjusting to a fundamental economic shift in which more companies have delayed or forgone public listings while nonbank lending has expanded. Read more
Google Wallet to test a feature that turns your US passport into a digital ID - Google announced that it’s introducing new Wallet updates for travelers and commuters. Most notably, Google Wallet will soon start beta testing the ability to create a Digital ID from your U.S. passport, which will work at select TSA checkpoints when traveling domestically. Read more
Buy with Prime and Amazon multi-channel fulfillment expand with new capabilities and more brands - As part of the announcement, Amazon said that shoppers using Buy with Prime, a program that enables customers to buy on third-party merchant sites using their Amazon account, can now use PayPal to make purchases. Read more
Revolut eyes expansion in Gulf with license application - The firm has submitted applications to the Central Bank of the United Arab Emirates to become an electronic-money institution and offer remittances in the country. The goal is to eventually apply for a full banking license, similar to the one it recently received from regulators in the UK after years of work. Read more
Wyoming’s stablecoin plan is latest crypto push by cowboy state - The least populated state’s select committee on blockchain has put forth dozens of pieces of legislation over the last five years. And just last month, Wyoming announced plans to launch a dollar-backed token by early 2025, which aims to lower consumer payment costs using blockchain technology. Read more
Select Financings
Bounti - California based AI platform for sales and customer success teams raised $16m in Seed funding led by GV. Read more
Cayena - Brazil based transaction platform for the wholesale food industry raised $55m in Series B funding led by Bicycle Capital. Read more
Every - San Francisco based payroll, onboarding, and spend management startup raised $22.5m in Series A funding led by Redpoint Ventures. Read more
Fermah - George Town based zero-knowledge proof startup raised $5.2m in Seed funding led by a16z Crypto Startup Accelerator and Lemniscap. Read more
Hotel Engine - Denver based hospitality booking company raised $140m in Series C funding led by Permira. Read more
Infinit - Distributed DeFi abstraction protocol raised $6m in new funding led by Electric Capital. Read more
Kaleidofin - India based lender raised $13.8m in Series B funding led by Rabo Partnerships. Read more
Ledgebrook - Boston based specialty insurtech company raised $17m in Series B funding led by Duquesne family office. Read more
Loop - Toronto based cross-border payments solution for businesses raised $4.7m in new funding led by Mistral Venture Partners. Read more
Mangomint - Los Angeles based provider of salon and spa software raised $35m in Series B funding led by Altos Ventures. Read more
Neverless - London based crypto trading app launched by three former Revolut executives raised $6.8m in pre-Seed funding led by European VCs. Read more
Nopillo - France based tax solution for real estate investments raised €4m in Seed funding led by Newfund. Read more
Onsurity - India based SME-focused insurtech company raised $21m in Series B funding led by Craeagis. Read more
Orb - San Francisco based real-time billing software startup raised $25m in Series B funding led by Mayfield. Read more
Permissionless Labs - Solana based content delivery network raised $10m in Series A funding led by Multicoin Capital. Read more
Point.me - New York based points and travel reward search platform raised $15m in Series B funding led by Nyca Partners and Citi Ventures. Read more
Roots Automation - New York based maker of a generative AI model for insurance claims raised $22.2m in Series B funding led by Harbert Growth Partners. Read more
Sitewire - California based construction finance startup raised $3.2m in Seed capital led by Zacua Ventures. Read more
The Open Network - Switzerland based blockchain platform behind the Telegram crypto ecosystem raised $30m in new funding led by Bitget and Foresight Ventures. Read more
TrueX - US based non-custodial stablecoin-native crypto exchange raised $9m in Seed funding led by Paxos, Solana Foundation, Aptos, RRE Ventures, Reciprocal Ventures, Accomplice Blockchain, and Hack VC. Read more
Vana - San Francisco based crypto startup building a network of user-owned data pools raised $5m in new funding led by Coinbase Ventures. Read more
Wealth.com - Phoenix based company that helps financial advisers create and optimize estate plans for their clients raised $30m in Series A funding led by GV. Read more
Yellow Network - Decentralized clearing network for digital assets raised $10m in Seed funding led by Ripple co-founder Chris Larsen. Read more
Yonder - UK based rewards credit card startup raised £23.4m in Series B funding led by Repeat and RTP Global. Read more
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