Former Citadel Securities Execs Raise $50M For Crypto Market-Making Startup

A new market maker founded by former Citadel Securities executives bagged $50 million in funding from venture capital investors. In addition to being a market maker, the startup also plans to invest in Web3 businesses as a venture capital firm.

Coatue Management-backed Portofino Technologies Secures Fresh Funding to Provide Crypto Liquidity to Investors

Portofino Technologies, a startup market maker founded by ex Citadel Securities employees, secured $50 million in venture capital (VC) funding, the Bloomberg reports. Investors who participated in the funding round include Coatue Management, Valar Ventures, and Global Founders Capital, among others.

As a market maker, Portofino provides institutional and high-net-worth individual investors with crypto liquidity that is trading on centralized and decentralized exchanges, as well as over-the-counter (OTC). In addition, the startup offers strategic and technical support for web3 firms looking to list their tokens on these exchanges.

Founded in 2021, the Zug, Switzerland-based Portofino currently has 35 employees across its offices in London, Singapore, and New York. The startup plans to expand that number to 50 by the end of 2022.

The company’s founders, Leonard Lancia and Alex Casimo, launched the startup last year after exiting one of the world’s largest market making firms, Citadel Securities. Lancia served as Citadel’s former head of Europe systematic market making for derivatives, while Casimo was the firm’s COO and part of its business management team in Europe.

The founders did not disclose Portofino’s current valuation but they said the startup has traded billions of dollars before coming out of stealth. Lancia said he believes that Portofino’s “liquidity provisioning infrastructure can deliver enormous benefits to digital asset participants globally, and drive the next leg of adoption.”

“This is only the start for Portofino. In web3, every action is a transaction and we’re building the underlying technology that is going to enable entirely new services and industries in the future.”

– Leonard Lancia, CEO & Founder at Portofino Technologies

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Portofino Seeks to Compete With Major Makers and Unveils Web3 Plans

Looking ahead, Portofino plans to expand beyond its market-making operations and back new businesses and services entering the rapidly-growing Web3 space. Furthermore, the startup also wants to invest as a venture capital firm in the future.

“In five years, 10 years from now, if you believe in the narrative of the tokenized economy, what you will see is that any small business could issue tokens that have some sort of utility or engagement.”

Lancia added.

Portofino’s new funding round comes after a myriad of headwinds for market makers, which came as a result of the ongoing crypto downturn. The crypto winter has wiped off billions of the crypto market cap following a sell-off prompted by rampant inflation and collapses of several crypto projects.

Such an environment led to lower trading volumes and fewer arbitrage opportunities, while higher borrowing costs resulted in more expensive hedging. However, Casimo thinks the startup will be able to compete with the larger market makers thanks to its unique algorithms and automated inventory management.

Do you think Portofino Technologies will achieve its goals and compete with the biggest market makers? Let us know in the comments below.