Citadel Securities Nabs $1.15 Billion From Venture Firms

Market maker Citadel Securities has scored $1.15 billion in venture capital investments from Sequoia and Paradigm.  

This marks the first time the trading execution giant received outside capital from investors. The Wall Street Journal broke the news Tuesday, which was followed by an official announcement from the firms. 

Ken Griffin founded Citadel Securities in 2002 after years of operating hedge fund firm Citadel. Citadel Securities processes trades on behalf of both institutional and retail investors, including many of Robinhood Markets’ clients.  

“In Sequoia and Paradigm, we have partners that appreciate how the strength of our market expertise, advanced predictive analytics and superlative software engineering can redefine an industry,” Griffin said in a statement.  

Sequoia led the funding, using capital from Sequoia Heritage, Sequoia Capital Global Equities, and the Global Growth Fund. Alfred Lin, a partner at the firm, has joined Citadel Securities’ board of directors. Sequoia’s investors include Ford Foundation, Mayo Clinic, and MIT, according to the announcement.  

According Paradigm’s co-founder, Matt Huang, Citadel Securities plans to extend its technology to more markets and asset classes, including cryptocurrency.  

“As technological innovation in financial markets becomes only more important, we see enormous opportunities to meet the needs of our clients across more markets and more products,” Citadel Securities CEO Peng Zhao added in a statement. “Our partnership with Sequoia and Paradigm puts us in an even stronger position as we continue to scale our business, broaden into new markets and attract the world’s most brilliant minds.” 

The news comes nearly two months after a federal judge in Florida dropped a lawsuit accusing Robinhood and Citadel Securities of colluding to stop investors from buying so-called meme stocks amid significant market volatility, Institutional Investor previously reported.   

“There are no allegations that Citadel Securities threatened or suggested it would cut off business relationships with any other defendants if they did not impose trading restrictions, and plaintiffs failed to otherwise explain why each defendant would not simply use another market marker in such a scenario,” Judge Cecilia Altonaga wrote in her decision.