Clear Street, a New York-based company aiming to replace outdated infrastructure across capital markets with modern cloud-native technology, has raised $270 million in the second tranche of a Series B funding round led by Prysm Capital at a $2 billion valuation.
The financing brings the total raised in the round to $435 million, with the first tranche of $165 million having been raised in May 2022 at a $1.7 billion valuation. The company, founded in 2018, started by building a prime brokerage platform for institutional investors, but aims to eventually serve a variety of investor types across multiple asset classes on a global scale.
Clear Street has approximately 200 institutional-sized investors and hundreds of smaller active trading entities using its prime brokerage and clearing system. Its founders say the current technology being used across capital markets is outdated and built on mainframe technology from the 1980s, which is costly and inefficient, resulting in errors and technical debt.
Clear Street, a New York-based company that provides a cloud-native prime brokerage and clearing system for institutional investors, has raised $270 million in the second tranche of its Series B funding round at a valuation of $2 billion. The financing was led by growth equity firm Prysm Capital, and brings the total raised in the round to $435 million. Clear Street previously raised the first tranche of the round in May 2022 at a $1.7 billion valuation, which was also led by Prysm.
Clear Street’s prime brokerage platform aims to replace outdated infrastructure across capital markets, starting with the public US securities industry, which still relies on legacy systems from the 1980s. The company makes money by charging fees for transactions and the financing of public market securities. Clear Street says it has $700 million “in capital,” including its external raise. It has used the funds to launch new businesses, expand into new markets and asset classes, and hire more employees.
The company claims that its prime clearing platform processes 2.5% of the gross notional US equities volume, which the executives say amounts to about $10 billion in daily notional trading value of US equities. Its daily transactional volume increased by more than 300% over the past year, and its financing balances increased by nearly 150%. The company has around 400 employees today, up from around 325 in April of 2022.