Citadel Securities, one of the country’s largest hedge funds and trusted financial institutions, announced on Tuesday it secured a $1.15 billion minority investment from Sequoia Capital and Paradigm. This funding round raises Citadel’s valuation to a whopping $22 billion.
Headquartered in Chicago, the company was started in 1990 by Kenneth Griffin and has been a major player in the stock market ever since. According to its website, Citadel partners with companies to help launch their public offerings and has over 1,600 clients. The company also uses algorithmic trading and other tools to maximize clients’ access to ETF order placements.
Citadel also stakes claim also the country’s leading market maker. Market makers process stock transactions by purchasing securities when someone is looking to trade. Market makers front the money and sell the stock at a future time.
“The talent of our extraordinary market making team combined with our powerful risk management techniques have transformed the client experience in the many markets we serve,” Griffin, who now serves as Citadel’s securities chairman, said in a statement. “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.”
The investment from Sequoia and Paradigm is Citadel’s first outside funding raise, according to The Wall Street Journal. It is also an investment from prominent tech VCs. Sequoia has invested in notable companies such as Apple, DoorDash and Airbnb, and helped take companies from startups to successful IPOs. Paradigm, on the other hand, focuses on investing in crypto and Web3 projects.
“Citadel Securities has carved out a unique place in the financial markets through its ability to absorb and price risk using techniques and capabilities from far outside the traditional world of Wall Street,” Sequoia Partner Alfred Lin said in a statement. “We are proud to partner with Citadel Securities in its mission of being the leading market maker in existing and emerging asset classes around the world. Many of our most successful investments have been in companies that share the client-centric ethos that defines Citadel Securities.”
In addition to the investment, Lin will join Citadel’s board of directors.
According to The New York Times, Citadel’s recent investment could signal that the company is looking to go public in the coming years.
