Sacra estimates that Alpaca hit $60M in annualized revenue in 2024, up 150% YoY from 2023. This growth was driven by explosive expansion in trading volume, which reached $180B annualized in 2024, representing 3x year-over-year growth as more fintech companies integrated Alpaca's trading APIs into their platforms.

The revenue surge coincided with Alpaca's transition to self-clearing through its DTCC membership, allowing the company to capture more value from each trade while reducing dependency on third-party clearing firms.

Alpaca monetizes through a combination of payment for order flow, commission fees, margin interest, and API usage fees from its broker-as-a-service platform. The company serves over 200 fintech partners across 40 countries, including well-funded companies like Midas and Syfe, which have collectively raised over $100M in venture capital.

Alpaca raised $50M in Series C funding from Tencent in 2024 at a $461M post-money valuation. The company has raised approximately $115M in total funding across multiple rounds since its founding.

Previous funding rounds include a $15M convertible note from SBI Ventures in 2023 at a $250M valuation cap, and two rounds in 2021: a $50M Series B-2 led by Unbound at a $475M post-money valuation and an earlier $50M Series B led by Tribe Capital at a $215M post-money valuation. Other key investors include Spark Capital, Social Leverage, Horizons Ventures, and Portage Ventures.

Alpaca is a financial infrastructure platform that provides APIs for developers and businesses to embed trading, investing, and brokerage services into their applications. The platform operates like AWS for financial services, handling the complex regulatory and operational requirements of running a brokerage while exposing simple REST APIs for integration.

Developers can use Alpaca's Broker API to create brokerage accounts, process KYC verification, handle funding through ACH or wire transfers, execute trades across US equities, options, and cryptocurrencies, and manage portfolio data. The platform supports fractional share trading, extended hours trading including 24/5 market access, margin trading, and IRA accounts. Alpaca maintains custody of client assets and handles all clearing and settlement through its DTCC membership.

The platform serves two primary user bases: B2B fintech companies that embed investing features into their apps, and individual algorithmic traders who use Alpaca's Trading API to automate their strategies. Partners can integrate features like high-yield cash management, options trading, and multi-currency support, while Alpaca handles compliance, reporting, and regulatory requirements behind the scenes.

Alpaca also provides paper trading environments for testing, real-time market data feeds, webhooks for trade notifications, and SDKs in multiple programming languages. The platform's self-clearing capabilities enable faster settlement times and better unit economics compared to competitors who rely on third-party clearing firms.

Alpaca operates a B2B2C brokerage-as-a-service model, providing the regulated infrastructure that enables fintech companies to offer investing features without building their own broker-dealer operations. The company generates revenue through multiple streams including payment for order flow, commission fees, margin interest, cash management spreads, and API usage fees from enterprise clients.

The platform's vertical integration through self-clearing creates significant operational advantages and margin expansion opportunities. By becoming a DTCC member, Alpaca eliminated third-party clearing fees and gained control over the entire trade lifecycle from order routing to settlement. This allows the company to offer more competitive pricing to partners while capturing additional revenue that previously went to external clearing firms.

Alpaca's usage-based pricing model scales with customer activity rather than seat-based subscriptions, aligning revenue growth with actual platform utilization. Enterprise clients pay annual fees for API access along with per-transaction costs, while the company earns additional revenue from the underlying brokerage activities of end users. The model benefits from network effects as more partners drive higher trading volumes, improving Alpaca's negotiating position with market makers and liquidity providers.

The company's asset-light approach to geographic expansion relies on partnerships with local fintech companies rather than establishing physical presence in each market. This enables rapid international scaling while local partners handle market-specific requirements like currency conversion, local payment rails, and regulatory compliance.

DriveWealth represents Alpaca's closest competitor, having established an earlier market position with $550M in total funding and a broader enterprise focus. DriveWealth operates its own clearing infrastructure and has expanded internationally with licenses in Singapore and a recent Lithuanian brokerage license for European operations. The company offers 24/7 fractional trading and serves a similar customer base of fintech companies seeking embedded investing capabilities.

Apex Fintech Solutions dominates the traditional clearing and custody market as a legacy incumbent owned by Peak6. Apex recently launched Apex Alts to expand beyond vanilla equities into alternative investments like private credit and REITs, signaling a push to capture more value from the investment lifecycle. Their established relationships with major brokerages and deep regulatory expertise create significant competitive moats, though their technology stack is less developer-friendly than newer API-first platforms.

European competitors like Upvest and Lemon Markets are building localized platforms tailored to specific regulatory environments and customer preferences. Upvest raised €100M in Series C funding to expand across European markets, while Lemon Markets focuses specifically on EU developers with $30M in funding. These regional players understand local compliance requirements, payment systems, and cultural preferences in ways that global platforms struggle to match.

Asian markets have spawned their own specialized players like Toss Securities in Korea and various Southeast Asian platforms that integrate with local banking systems and regulatory frameworks. These competitors often have advantages in local language support, currency handling, and relationships with domestic financial institutions.

New entrants are attacking specific segments of the brokerage infrastructure market with focused solutions. Some competitors focus on crypto trading APIs, others specialize in options or forex, while platforms like Tradier offer alternatives for algorithmic trading. The relatively low barriers to building basic trading APIs mean Alpaca faces constant pressure from niche players who can undercut pricing in specific product categories.

Alpaca's expansion into options trading opens access to the massive derivatives market, allowing partners to offer more sophisticated trading strategies that generate higher revenue per user. The upcoming launch of global equities and fixed income products within 3-6 months will enable partners to offer diversified portfolios beyond US stocks, particularly valuable for international customers seeking local market access.

The introduction of high-yield cash management and IRA accounts transforms Alpaca from a pure trading platform into a comprehensive wealth management infrastructure. These products increase customer lifetime value and stickiness while generating recurring revenue through cash spreads and account fees rather than just transaction-based income.

International expansion represents Alpaca's largest TAM opportunity, with the platform currently serving partners in 40 countries but still primarily focused on US market access. The company is pursuing additional broker-dealer licenses in the Middle East, Europe, and Asia to offer local market trading capabilities rather than just US equity access for international users.

The 24/5 trading capability specifically addresses international demand by eliminating time zone constraints that previously limited US equity adoption in Asian and European markets. Local currency trading APIs reduce friction for international users while Alpaca's partnerships with companies like Sarwa in the UAE and Thndr in Egypt demonstrate the playbook for regional expansion.

Alpaca is in late-stage discussions with several major enterprise clients that could significantly expand the platform's scale and market positioning. Success with large enterprise deals would provide recurring revenue streams and validation for pursuing additional Fortune 500 companies seeking to embed financial services.

The company's self-clearing capabilities enable white-label clearing services for other financial institutions, creating an entirely new revenue stream beyond API access. This positions Alpaca to compete directly with Apex and other clearing firms while leveraging its modern technology infrastructure.

Regulatory capital: Self-clearing through DTCC membership requires substantial regulatory capital that increases with trading volume and market volatility. Rising capital requirements could constrain Alpaca's growth or force dilutive fundraising, while regulatory changes in key markets could impact the company's ability to serve international partners or offer certain product types.

Competitive pressure: The brokerage infrastructure market is attracting well-funded competitors like DriveWealth while incumbents like Apex expand their API offerings. Price competition could compress margins, particularly as larger players use their scale advantages to undercut Alpaca's pricing, potentially forcing the company to compete on price rather than features and service quality.

Market concentration: Alpaca's revenue depends heavily on trading volume and market activity, making the business vulnerable to market downturns or reduced retail trading interest. A significant portion of growth has come from the retail trading boom and crypto adoption, both of which could reverse during economic uncertainty or regulatory crackdowns on retail investing platforms.