Capitolis raises USD $220 million to buy eSecLending

Capitolis has raised USD $220 million in financing, including a USD $120 million Series E round that values the company at USD $1.9 billion.

The equity round was led by Citi, with Bank of America, Nomura and Tradeweb joining as new strategic investors alongside existing backers Barclays, BNP Paribas, J.P. Morgan, State Street and UBS.

The financing also includes debt from First Citizens Innovation Banking, Hercules Capital and Pinegrove Venture Partners. Capitolis plans to use the funding to support its acquisition of eSecLending, a deal that adds securities lending to its platform and brings in a broader institutional asset owner client base.

The New York financial technology company operates in capital marketplace services and portfolio optimisation for banks and other financial institutions. It focuses on helping clients manage funding, capital and balance sheet pressures.

The financing brings together large bank investors and market infrastructure participants at a time when firms across capital markets are looking to reduce manual processes and use balance sheets more efficiently. Tradeweb's involvement also signals interest from trading venue operators in the securities lending market, which remains less automated than many adjacent areas of finance.

eSecLending is expected to broaden Capitolis' reach beyond bank clients by expanding its access to large asset owners. That would add a securities lending business to a company that has so far concentrated on financial resource management services for major financial institutions.

Investor backing

The Series E investor list spans some of the world's biggest banking groups. Citi, which already held a stake, led the equity financing, while Bank of America, Nomura and Tradeweb joined as new strategic investors.

Other participating existing investors were Barclays, BNP Paribas, J.P. Morgan, State Street and UBS. Additional existing and new financial investors also took part, though Capitolis did not identify them.

Highlighting the transaction's strategic focus, executives from two investors linked the fundraising to Capitolis' planned purchase of eSecLending and to broader changes in market structure.

"We are pleased to have led this financing round, bringing together a group of strategic investors in support of Capitolis' next phase. The transaction reflects our continued focus on investing selectively in businesses shaping the infrastructure and evolution of global capital markets," said Siris Singh, Global Head of Markets Strategic Investments at Citi.

Tradeweb pointed to the importance of securities lending in explaining its investment. The market has long relied on bilateral relationships and manual workflows, even as electronic trading has become common in other asset classes and post-trade functions.

"Securities lending represents the next frontier in the electronification we've seen across our markets, and Capitolis' acquisition of eSecLending will be an important step in that evolution. By combining eSecLending's network of institutional asset owners with Capitolis' financial resource optimization platform, this deal creates real opportunities to bring more automation and efficiency to a market that has historically relied on manual processes. We're thrilled to support Capitolis as it builds out these capabilities," said Serene Murphy, Global Head of Corporate Development at Tradeweb.

Acquisition plan

The financing is closely tied to Capitolis' agreement to acquire eSecLending in an all-cash transaction valued at USD $200 million. By linking the fundraising to that purchase, the company is using new equity and debt to expand both its product range and client network.

Capitolis said the acquisition will add securities lending to its financial resource optimisation platform. It also said the combination will expand access to a network of institutional asset owners, an area distinct from its established bank-focused franchise.

Gil Mandelzis, Founder and Chief Executive Officer of Capitolis, described the fundraising as a vote of confidence from existing and new backers.

"This Series E financing is a great milestone for Capitolis and a strong endorsement of our vision and ability to execute on it. We are deeply grateful for the continued support of our existing strategic investors and excited to welcome Bank of America, Nomura, and Tradeweb as new strategic investors. The financing will enable our acquisition of eSecLending, expanding both our capabilities and client network as we continue partnering with the industry to address its evolving financial resource optimization needs," said Mandelzis.

Founded in 2017, Capitolis counts venture investors including Andreessen Horowitz, Index Ventures, Sequoia Capital and Spark Capital among its backers, alongside a roster of global banks. The latest round strengthens that mix of venture and strategic capital while providing fresh funds to complete the eSecLending acquisition.