Israeli Fintech Capitolis Raises $220 Million at $1.9 Billion Valuation
Translated & summarized from Globes by baba
Israeli fintech firm Capitolis has secured $220 million in funding, achieving a valuation of $1.9 billion. The company, which facilitates risk-sharing among banks, saw participation from major financial institutions as investors and clients.
The story in 5 lines · by baba
- Capitolis raised $220 million at a $1.9 billion valuation.
- The company acts as an "Airbnb for banks" to share capital risk.
- Major banks like Citi, Bank of America, and J.P. Morgan are clients and investors.
- Revenue grew 65% last year, with profitability targeted soon.
- The funding follows four acquisitions, including e-SEC Lending.
Israeli fintech company Capitolis, founded by serial entrepreneur Gil Mandelzis, has raised $220 million in a funding round that values the company at $1.9 billion. The funding consists of $120 million in equity and $100 million in debt financing. Capitolis describes itself as an "Airbnb for banks," enabling financial institutions to share risks on their capital and comply with post-2008 crisis regulations.
The funding round was led by existing client Citi Bank, with participation from new strategic investors including Nomura, Bank of America, and Tradeweb Markets. Existing investors such as J.P. Morgan, Barclays, BNP Paribas, and UBS also participated. The debt financing was provided by First Citizens Bank (formerly SVB), Hercules, and Pingrow.
Capitolis operates in a niche that allows banks and investment firms to share capital, thereby reducing the interest paid on excess capital and mitigating individual risk. The company's platform allows banks to allocate capital to positions in other banks, earning fees from these transactions. Mandelzis stated that Capitolis serves 30 of the world's largest banks, major US regional banks, 30 of the largest global pension funds, 30 major hedge funds, and 70 large investment and asset firms.
Capitolis reported a 65% increase in revenue over the past year and aims to achieve operational break-even and profitability in the coming year. The company anticipates reaching an estimated $125-130 million in revenue by the end of 2026, with potential for 50% further growth annually, partly through acquisitions. This funding round follows four acquisitions by Capitolis, the most recent being the $200 million purchase of e-SEC Lending, a startup in the securities lending space.
The company currently employs 200 people, with the acquisition of e-SEC Lending adding another 120 employees in the US, bringing the total to 320. Sixty of these employees will be based at the development center in Tel Aviv.
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