Capitolis believes financial markets can and should work better for everyone. As the leading capital marketplace driving financial resource optimization for market participants, Capitolis has an expansive vision of the financial services industry, its challenges, and its potential.
Capital markets – as currently designed, with the necessary measures implemented by regulators – face capital limits. Large institutions that deliver critical financial services are required to hold large amounts of capital, and they must continuously assess the total cost of the services they provide. This can constrain them from doing more of what they do best, delivering critical solutions to their customers. The knock-on effect of increasing costs of doing business impedes and diminishes overall market efficiency and economic growth. Without a solution to manage capital requirements the capital needs of the global economy can become increasingly constrained. Capitolis solves fundamental market inefficiencies by connecting banks, which have unique ability to originate, service and deliver critical financial services to their clients, with institutional capital providers that have investment capacity and are happy to partner with the banks.
Capitolis tailors and scales solutions to democratise access to capital—unlocking opportunities and reimagining what’s possible in the global economy. As unrivalled experts in finance and technology, Capitolis leverages its breadth of experience to build solutions that both meet clients’ needs and create access in the market, with innovation at the intersection of finance and technology. Founded in 2017, Capitolis’ technology enables financial institutions to optimise their resources, execute seamlessly with new market participants, and achieve greater access to more diversified capital, all of which enable fairer, safer, and healthier capital markets.
Capitolis’ Compression and Optimization solutions provide clients the opportunity to free up capacity and manage capital requirements stemming from their derivatives portfolios. Reductions can be achieved by overlaying trades to rebalance risk, collapsing trades to remove risk, or through Novations, whereby risk is transferred between counterparties.Clients access Capitolis services on a centralised system which provides insights into portfolio inefficiencies. Through the optimization platform, clients gain insights into their portfolio and are able to participate in bilateral and multilateral optimizations and compression opportunities to achieve significant increases in efficiency in their derivatives portfolios. Capitolis is revolutionising a process that has traditionally been highly manual and operationally intensive. Capitolis’ Compression service combines world-class mathematics and algorithms, a flexible product process, a respected sales team and a dedicated adoption team that work end-to-end to solve clients’ most pressing resource problems.
In August 2021, Capitolis announced the acquisition of LMRKTs, an industry-leading multilateral optimization and compression provider. The LMRKTs acquisition allowed Capitolis to provide banks, asset managers, and hedge funds with the broadest and most complete trade compression solutions available in the market. The introduction of their existing network of clients to one another served to further expand their optimization options. They have doubled their engineering team over the last 12 months to further enhance and improve technology and innovation.Solving for Regulatory Complexities.
Beginning in 2020 Capitolis has been focused on developing a leading solution for clients to manage derivatives exposures and capital requirements under the Basel Committee’s Standardized Approach to Counterparty Credit Risk (SA-CCR).To help prepare clients for the broad global implementation of SA-CCR at the start of 2022, Capitolis successfully completed four multilateral SA-CCR proof of concept optimization runs, working closely with clients to prepare for the upcoming calculation changes and associated data complexities, with over 25 of the world’s largest financial institutions participating. Through their monthly working groups with over 40 participants (existing clients and non-clients alike) they were able to make a significant impact on the industry’s preparedness for the critical SA-CRR transition this year.
Building upon the work done to prepare clients for SACCR optimization, Capitolis has completed seven successful multilateral runs through mid-May 2022, with growing participation and regular benefit for the industry. This success sets the stage for an expanding footprint in the SA-CCR landscape in 2022. To date, Capitolis has delivered reductions in SACCR notional amounts in excess of $1 trillion.
The success in multilateral SACCR optimization is a complement to Capitolis’ extended success in its Novation platform and bilateral compression and optimization services. For the last five years, Capitolis has been the market leader in bilateral compressions and novations, where they have pioneered automation-driven solutions to optimise over $14 trillion in notional amounts.
In times of market volatility and uncertainty, customers come to Capitolis for trusted, agile, and rapid responses and the established network of the world’s largest dealers and other financial institutions.
An example of this— following Russia’s aggression in Ukraine, Capitolis was approached by the world’s leading financial institutions, many of which have large historical exposures denominated in Russian ruble, seeking a targeted solution to manage and reduce derivatives exposure. Capitolis worked quickly to bring together a large network of global banks and, through Capitolis’ trade optimisation platform, supported a dozen banking entities to successfully reduce their exposure to Russian ruble and mitigate the impact of settlement failures due to sanctions or other market happenings. These banks needed the right technology, and a trusted third party that had established its capabilities and credibility with them to execute this. Through its trade compression platform, Capitolis was able to reduce these large exposures and promote financial soundness and stability for the benefit of the whole capital markets system. Through Mid-May, Capitolis has helped clients remove in excess of $20 billion in settlement exposures.
Capitolis also understands that innovation must be coupled with industry education. To have the evolving market understand how regulatory changes impact them, the company distributes thought leadership, offering insights to the broader FX community, to clients and to other key stakeholders in the industry. Sharing information is crucial in the evolution of the capital marketplace. Capitolis believes in driving growth with purpose to make a positive impact on the world. Their offerings revolutionise the market and propel the industry forward — while actively enabling a safer, more stable market that protects every participant.
Capitolis is backed by leading venture capital and financial firms that both back them, and serve as clients. To date the company has raised $280 million in funding and is backed by top fintech investors including Canapi Ventures, 9Yards Capital, and SVB Capital– most notably with our recent Series D funding raise of $110 million, bringing us to a $1.6 billion valuation. Other investors include top VC’s, Andreesen Horowitz, Sequoia Capital, and Index Ventures, as well as our clients, including JP Morgan, Citi, and State Street. Capitolis currently employs 150+ global professionals in its companies and offices in New York, London, and Tel Aviv.
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