Social Leverage Invests in Alpaca (Alpaca.Markets)

Author

Howard Lindzon
November 11, 2019

Social Leverage is excited to have invested in Alpaca.Markets a Commission-Free, Stock Trading API.  With Alpaca Securities’s commission-free API, you can run algorithmic trading & portfolio management bots and build your own mobile app with ease.

Josh Constine at TechCrunch broke the news and explained:

Stock trading app Robinhood is valued at $7.6 billion, but it only operates in the U.S. Freshly funded fintech startup Alpaca does the dirty work so developers worldwide can launch their own competitors to that investing unicorn. Like the Stripe of stocks, Alpaca’s API handles the banking, security and regulatory complexity, allowing other startups to quickly build brokerage apps on top for free. It has already crossed $1 billion in transactions within a year of launch.

In simple terms, using Alpaca…any company can build a Robinhood from the ground up.. It is built For Makers In Open source & Community. Alpaca truly believes open source changes the financial systems and how we interact with them. Alpaca grows with their community and knowledge they build together.

I have been talking with Yoshi, the founder of Alpaca, for the last few years as they have developed their middleware/infrastructure products for the global financial industry. Yoshi has been very patient and I am glad we had the opportunity to invest. We have invested alongside Spark Capital with who we invested in Etoro back in 2011.

Josh at Tech Crunch does a good job of analyzing the playing field as well as the opportunities:

One major question is whether fintech businesses that start to grow atop Alpaca and drive its revenues will try to declare independence and later invest in their own technology stack. There’s the additional risk of a security breach that might scare away clients.

Alpaca’s top competitor, Interactive Brokers, offers trading APIs, but other services as well that distract it from fostering a robust developer community, Yokokawa tells me. Alpaca focuses on providing great documentation, open-source contribution and SDKs in different languages that make it more developer-friendly. It will also have to watch out for other fintech services startups like DriveWealth and well-funded Galileo.

There’s a big opportunity to capitalize on the race to integrate stock trading into other finance apps to drive stickiness because it’s a consistent, voluntary behavior rather than a chore or something only done a few times a year.

Yoshi has a big push right now in Japan hopping to bring broader access to the US stock market in the coming months.