Stock trading app Robinhood is valued at $7.6 billion, but it only operates in the U.S. Freshly funded fintech startup Alpaca does the dirty work so developers worldwide can launch their own competitors to that investing unicorn.
Like the Stripe of stocks, Alpaca’s API handles the banking, security and regulatory complexity, allowing other startups to quickly build brokerage apps on top for free.
Instead of charging developers, Alpaca earns its money through payment for order flow, interest on cash deposits and margin lending, much like Robinhood.
After his grandmother got sick, he moved into day-trading for three years and realized “all the broker dealer business tools were pretty bad.” But when he heard of Robinhood in 2013 and saw it actually catering to users’ needs, he thought, “I need to be involved in this new transformation” of fintech.
Yokokawa ended up first building a business selling deep learning AI to banks and trading firms in the foreign exchange market.
Alpaca’s top competitor, Interactive Brokers, offers trading APIs, but other services as well that distract it from fostering a robust developer community, Yokokawa tells me.