IEX, the super-fast trading platform that was the focus of Michael Lewis’ recent book, is one step closer to becoming a full-fledged stock market.
The upstart platform raised $75 million in a new round of financing that will be used to pursue registration as a U.S. National exchange and expand its brand reach, the company said Wednesday.
The investors included such luminaries as Netscape co-founder James Clark and casino billionaire Steve Wynn. Venture capital firms Spark Capital and Bain Capital Ventures as well as other investors including Massachusetts Mutual Life Insurance and Franklin Templeton also participated in the round.
Made famous in Lewis’s book “Flash Boys,” IEX was developed to compete against the larger banks and their speed advantage — what’s known as high-frequency trading. IEX combats opaque high-frequency trading by slowing down orders to dampen the predatory effects of high-frequency traders.
“Flash Boys” brought the issue to the forefront of financial conversation and raised concerns that the Wall Street giants are taking advantage of regular traders with their powerful algorithms and data connections. IEX touts itself as “dedicated to institutionalizing fairness” in the financial markets.
“Our intention from day one was to challenge the status quo by building a market that prioritizes the needs of traditional investors and issuer companies,” said Brad Katsuyama, CEO and co-founder of IEX, in a statement. “We are encouraged by our recent growth, which has been driven by both investors and their brokers.”
IEX has grown rapidly this year. Its daily trading volume has tripled since the first quarter and participant volume has exceeded 100 million shares per day.
Spark Capital’s Alex Finkelstein, a general partner at the firm, will join IEX Group’s board of directors as part of the financing and will help further scale-up the emerging stock exchange.