Quantopian Fills Up the Tank

Quantopian announced this morning that they raised $15MM in equity financing, led by Bessemer with participation from Spark, Khosla, and Wicklow Capital. Rob Stavis from Bessemer has joined the board, whose prior experience in the world of finance will be very valuable to the company going forward.

Simultaneous to the funding announcement, the company is starting to talk about what they want to be when they grow up: a networked hedge fund. The company will raise capital to back the best performing algorithms inside the platform that choose to opt-in to the fund.  It’s a great model that balances all parties interests well: quants get access to Wall St-grade trading workflow tools and easier access to capital, Quantopian makes money as the underlying quants become more successful with their algorithms, and investors in the fund get a wide diversity of ideas for systematic trading from Quantopian’s global audience.  It’s an exciting idea; to be clear about expectations on timing, the fund is still very early in execution — essentially idea stage. The announcement of the fund model at this time send a clear signal to Quantopian’s community of quants about the long term plans of the business.

Quantopian is blossoming. The seamless develop-test-trade workflow is strong single-player value to a quant, and the community of quants helping each other and sharing code is great multiplayer value. With a strong balance sheet, Quantopian can now invest in building their community of emerging systematic trading managers into a larger fund.

I’m incredibly impressed with the progress Fawce, Jean, and the rest of the Quantopian team have made, and I count myself very lucky to have the opportunity to work with them.

Michael Carney from PandoDaily has good extended coverage on the financing.