August 2021 Summaries

Tribe Capital Leads Round As Alpaca Reports 1500 Percent Growth YTD With Over 100,000 Accounts, And Expanded Partnerships in Europe, SE Asia, Africa, Latin Americas` Alpaca, a commission-free stock brokerage platform, has closed a $50 million Series B funding round led by Tribe Capital, marking its 1500 percent year-to-date growth in brokerage accounts. The company aims to democratize investing and expand globally with fintech partners across Europe, Southeast Asia, Africa, North, and Latin America. With the fundraising round, Alpaca plans to launch a cryptocurrency product, expanding asset classes from equities to cryptocurrencies, and partnering with global crypto leaders Genesis, ErisX, and Silvergate. The company's Broker API has reported soaring growth, enabling fintech companies worldwide to build commission-free stock trading apps. Alpaca has established partnerships across multiple regions, including Europe, South East Asia, Africa, North, and Latin America, with notable partners like Gottrade, Midas, Investore, Chaka, and Xantos Labs. The company has raised a total of $72 million from investors and is backed by top industry investors such as Spark Capital, Portage Ventures, Social Leverage, Tribe Capital, Horizons Ventures, Eldridge, Positive Sum, Elefund, and Y Combinator.

There is an issue where API endpoints returning error responses when certain corporate actions are processed or a stock gets delisted, due to asset prices not being available. To address this, a minor breaking change will be introduced on September 9, 2021, where non-nullable fields in the API response will become nullable, and values excluding account positions in unpriceable assets will be used instead. The change will affect the Trading API and Broker API live environments initially, with Paper Trading and sandbox environments enabled shortly after. The update aims to keep the API available while mitigating potential errors.

Alpaca has integrated its Broker API with Plaid, a data network powering the digital financial ecosystem, to provide fintech apps with a seamless authentication and funding process via Plaid. This integration enables fintech apps to securely connect their own Plaid account onto the Alpaca platform, streamlining the funding experience for customers and simplifying the integration process through Plaid's Processor Tokens. With this partnership, developers can bring their products to market faster and easier, as stated by Richard Kim, Director of Success Operations at Alpaca. The integration also benefits fintech apps with features such as a streamlined funding experience, simple integration via Plaid's Processor Tokens, and setup and testing in the Broker API's sandbox environment before going live.

Alpaca is introducing changes to its brokerage services, starting August 2nd, 2021, which include paying out fractional shares in the event of a stock split and removing cash-in-lieu transactions. Cash-in-lieu transactions are paid instead of fractional shares when stocks are consolidated or restructured, reducing customer confusion around mergers, acquisitions, and splits. With this change, Alpaca aims to provide world-class services and APIs, including its native Fractional Shares API, developed to offer innovative solutions like this one. The changes will affect users who have positions with fractional shares in their Alpaca accounts, requiring them to consider alternative options for managing these shares, as Alpaca does not make recommendations on fractional share trading or specific security investments.

Xantos Labs is a Registered Investment Advisor that offers a premium investing experience for everyone, regardless of their financial situation. The company was founded in 2019 by three individuals who were frustrated with the traditional investment advisory services and set out to solve two major problems: lack of premium service for people without millions of dollars to invest and inaccessible novel approaches to portfolio management. Xantos Labs aims to provide a low minimum and low fee service with top-tier premium investing experience, focusing on exceptional risk-adjusted returns through qualitative research and systematic quantitative strategies. The company leverages Alpaca Broker API to deliver a seamless experience to its clients, offering commission-free trading, transparent and pragmatic investing strategies, and scalable cloud infrastructure.

Alpaca will begin charging borrow fees on overnight short positions for the month of June 2021 and onward as part of its efforts to provide world-class brokerage services and APIs. Borrow fees are charged by a brokerage firm to a client for borrowing shares, typically incurred when short positions are carried overnight. Short selling involves borrowing a stock, selling it, and buying it back to return to the lender. Alpaca will resume pass-through charges from its clearing firm to clients starting June 2021 after waiving fees between February to May 2021 during its transition period. Clients holding short positions as of Friday settlement dates will incur stock borrow fees for the next three days, regardless of the actual number of shares borrowed.

Gotrade is a commission-free brokerage platform that enables retail investors from over 150 countries to trade in whole or fractional shares of US stocks with as little as $1. The company was founded by Rohit Mulani, David Grant, and Norman Wanto in 2019 after they realized the challenges foreign residents faced when trying to invest in US stocks. Gotrade's goal is to make investing in US stocks accessible to all retail investors around the world, and it has built an intuitive mobile application to support this technology. The platform is powered by Alpaca Broker API, which provides commission-free stock trading, market data, and more. With no custody, inactivity, or dividend fees, Gotrade offers a range of features that make investing in US stocks easier and more accessible for international investors.

Alpaca has lifted its minimum deposit requirement from $30,000 to $1 for non-US users, allowing everyone to access their Trading API. To comply with regulatory requirements, the company is partnering with international KYC providers that verify identity through innovative methods such as uploading documents and taking a selfie. Once account approval is received, users can fund their accounts via wire transfer or bank transfer using one of Alpaca's payment providers. This change aims to bring investing power to everyone globally.