Exclusive Interview with Alpaca CEO: What is the background of the US stock underlying service provider behind Binance and Bitget?

Original: 《Alpaca's Vision for the "AWS of Finance" | CEO Yoshi Yokokawa on Building the Next Generation of Financial Infrastructure》

Source: NewsPicks

Compiled by: momo, ChainCatcher

Editor's Note: Recently, CEXs like Binance and Bitget have made significant moves into the stock trading space, and they almost all have a common underlying service provider—Alpaca, which provides them with infrastructure services such as clearing, custody, and trade execution.

According to The Information, Alpaca currently holds about 94% of the tokenized U.S. stock and ETF market share, with other core players in tokenization like Ondo Finance, Dinari, and xStocks also supported by its infrastructure.

In the $150 million Series D funding announced by Alpaca in January this year, Kraken participated as an investor. It was also after this round of financing that Alpaca CEO Yoshi Yokokawa announced plans to make a significant entry into the tokenization space, stating that the next phase of finance is the transition to on-chain systems.

It is reported that Alpaca's core team members are from Japan, with CEO Yoshi Yokokawa having previously worked in the securitization team at Lehman Brothers, later engaging in day trading full-time and founding several software companies. Co-founder and Chief Product Officer Hitoshi was the chief architect at Greenplum (later acquired by EMC).

Recently, in an exclusive interview with Japanese media NewsPicks, Alpaca's CEO elaborated on its business model, growth path, and vision for on-chain financial infrastructure. This article is compiled based on that interview:

Becoming a Unicorn with a Luxurious Investor Lineup

Alpaca is a fintech startup founded by Japanese entrepreneurs in the United States. Today, Alpaca supports over 10 million brokerage accounts through more than 300 fintech companies and financial institutions across over 40 countries.

In January 2026, it raised $150 million in Series D funding, becoming a unicorn. This round of financing brought the company's valuation to $1.15 billion, with total funding exceeding $320 million.

In the $150 million Series D funding, the lead investor was Drive Capital, a U.S.-based firm, with other participants including Mitsubishi UFJ Financial Group's Mitsubishi UFJ Innovation Partners, one of the largest market makers in the U.S., Citadel Securities, and Opera Tech Ventures, a subsidiary of BNP Paribas. This round of financing brought together investors from traditional finance, trading, and technology sectors.

Additionally, Keisuke Honda's X&KSK, the major U.S. cryptocurrency exchange Kraken, as well as co-founders of UK's Revolut and Sweden's Klarna also participated in the investment.

One of the investors is Endeavor, one of the world's largest entrepreneur support networks based in the U.S. This round of financing was not only to raise funds but also to expand Alpaca's global strategic network. Existing investors like Canada’s Portage Ventures and Hong Kong’s Horizons Ventures (under Li Ka-shing) also continued to invest.

Another noteworthy aspect of the Series D funding is that it also secured a $40 million credit line simultaneously. This is different from the typical equity financing seen in tech companies.

• NewsPicks: What is the significance of the $40 million credit line obtained during the Series D funding?

  
  

• Yoshi: "Obtaining this credit line is closely related to our business model. While we are a tech company providing APIs, we are also a fully licensed brokerage that holds and transfers client assets. To continue scaling while fulfilling our brokerage functions, strengthening our balance sheet is essential."

We Are Essentially the "Wholesalers" of Securities

• NewsPicks: So, what exactly is Alpaca?

  
  

• Yoshi: "In short, we are a brokerage that specializes in providing API connections. If we had to compare, we are like the AWS of finance. We provide all the functions of a brokerage responsible for clearing and settlement through APIs. By thoroughly building and automating our middle and back office internally, we achieve scaling while continuously reducing costs, just like AWS. This is how we operate."

The functions of a brokerage can generally be divided into three parts: (1) front office, such as interfaces and applications that investors directly interact with; (2) middle office; and (3) back office, responsible for trade management, clearing, and settlement. Alpaca focuses on the latter two. In other words, it focuses on the core of the securities business.

• Yoshi: "What we do is a brokerage business that specializes in the middle and back office. We rigorously build APIs and focus on how financial institutions that interact with end users can easily implement securities functions."

In industry terms, Alpaca's positioning is as a clearing broker, meaning it is a brokerage responsible for post-trade clearing, settlement, and custody.

• Yoshi: "At our core, we are a brokerage that handles funds and securities trust and custody. In Japanese terms, we can say we are close to a trust bank. Essentially, we are like wholesalers of securities, a company that provides the underlying securities infrastructure itself."

Tokenization Business Dominates 94% of the Market

Alpaca's business model is that of a clearing broker providing securities trading infrastructure through APIs. Existing financial institutions and startups do not need to build heavy systems internally. By connecting to Alpaca's infrastructure, they can launch advanced securities services under their own brand.

This business consists of two main pillars.

• One is the enterprise-facing Broker API: Brokerage firms, digital banks, and investment applications can implement investment functions under their own brand. These functions include account opening, deposits, trading, and custody for securities and crypto assets. This helps them meet complex compliance requirements and backend development. It also allows them to focus resources on developing UI and UX that directly interact with customers.

• The other is the Trading API for individual investors and algorithmic traders: It provides real-time data for securities and crypto assets, as well as features like simulated trading environments and advanced order functionalities.

Its advantage lies in the API-first design. Low latency, high-speed processing, and operational reliability capable of handling long transaction times have been recognized. As a result, over 300 financial institutions in more than 40 countries are using Alpaca's infrastructure.

• NewsPicks: Given that this business is very system-oriented, doesn't Alpaca resemble a system integrator more than a brokerage?

  
  

• Yoshi: "People often get the impression that we are like a systems company, but in reality, it's quite the opposite. We take pride in operating one of the heaviest businesses in the financial industry. We are not just selling systems. Behind the scenes, we are managing and safeguarding large amounts of funds and securities under the appropriate licenses. In fact, we are a heavyweight brokerage focused on technology."

This statement does not seem to be an exaggeration. In its tokenization business, the company has custody of over $480 million in underlying assets. By the end of 2025, it is expected to hold 94% of the global market share.

A Major Shift Towards Blockchain: Aiming to Become the Next Generation of BNY Mellon

Yoshi views the evolution of the financial system as a three-phase process: paper, computers, and on-chain systems—where assets and transactions are managed on the blockchain.

• NewsPicks: How do you view the next phase of the financial system?

  
  

• Yoshi: "Following the transition from analog to digital (computerization) that began in the 1970s, we are now witnessing a once-in-a-50-year transformation: the shift to on-chain systems. Stablecoins and tokenization of securities, which are currently hot topics, are just the beginning."

Yoshi's goal is to tap into the global custody market, estimated at $350 trillion. In this market, the four major custodians—BNY Mellon, State Street, JPMorgan Chase, and Citigroup—collectively hold about $180 trillion in custody assets (as of the end of 2025). This is a highly concentrated market dominated by these players. However, Yoshi sees an opportunity within this structure.

• Yoshi: "While the global securities market is valued at about $350 trillion, existing giants are constrained by legacy systems and cannot easily transition to the on-chain world. While they hesitate, we aim to fully build a new, API-based on-chain infrastructure to become the next generation of BNY Mellon or State Street. That is Alpaca's goal."

As mentioned earlier, Alpaca has custody of over $480 million in underlying assets in its tokenization business, holding 94% of the global market share.

• Yoshi: "Real demand will only emerge when liquid assets are tokenized. We have already established a significant position in that area. By replacing analog financial infrastructure with on-chain systems, our goal is to rewrite the power dynamics of the financial industry."

Achieving Doubling Revenue for Three Consecutive Years, Accelerating Expansion Outside the U.S.

Its business performance is also growing. Over the past three years, revenue has roughly doubled each year. Alpaca's revenue model is not based on one-time system sales. Instead, it combines typical stock (Stock) and flow (Flow) elements of financial business.

Revenue primarily comes from three sources: interest income generated from customer cash balances, securities-related income from custody and management, and execution income generated when trades occur.

• NewsPicks: How does Alpaca's revenue model work?

  
  

• Yoshi: "Our business model is purely that of a clearing broker. Conceptually, it is closer to a bank. Banks hold customer cash and earn interest from it. In our case, in addition to that, we also custody securities. Therefore, in addition to cash interest income, we also earn income from securities lending and margin financing generated from securities custody, as well as various fees accumulated over time."

In other words, Alpaca has a stock (Stock) business model, where revenue accumulates as custody assets grow. When the market is active, it can also benefit from flow (Flow) revenue. Although it is financial infrastructure, it also has significant upside potential depending on market conditions.

The financial business essentially has a two-layer structure of stock plus flow. The first layer is "stock," where interest income accumulates as trust assets increase. The second layer is "flow," which is the income generated when trades occur.

• Yoshi: "Since we handle not only custody but also trade execution, we earn fees when we connect to market makers and execute trades. In the U.S. market, there is also a mechanism called 'payment for order flow (PFOF),' where brokers are compensated for directing customer orders to specific market participants. As custody assets grow, stock income becomes more stable; as trading activity increases, flow income also expands. Structurally, it is similar to a bank, but we believe it also has unique upside potential specific to the securities industry."

(*) PFOF refers to the fees charged for directing customer orders to third parties.

One key factor driving Alpaca's growth is the speed of its global expansion. Its business operations have spread to over 40 countries, with increasing penetration in major markets such as the Middle East, Europe, and Asia. Partnerships with local players are driving this expansion.

U.S. cryptocurrency exchange Kraken, Japan's SBI Securities, Turkey's Midas, and Thailand's Dime are all financial participants with local operations. They are adopting Alpaca's infrastructure to provide investment experiences for users in their respective markets. Supported by global demand, revenue has nearly doubled each year over the past three years. The company expects to maintain a similar growth rate this year.

The Moat is the "Connection Experience"

The core of the securities industry is clearing, which has not changed much since the U.S. Securities Act of 1933. It is not easily visible to end users but is one of the most critical infrastructures in the industry. In this field, companies like BNY Pershing and State Street have a longer history and larger asset bases. From the perspective of licenses and memberships, Alpaca operates in the same field as these institutions.

• NewsPicks: So, what makes Alpaca different and allows it to grow into a unicorn valued at $1.15 billion?

  
  

• Yoshi: "The clearing brokerage business itself is a traditional industry that has existed since 1933. In terms of licensing structure, what we do is essentially the same as what large financial institutions like State Street, BNY, and Goldman Sachs do. However, the biggest difference lies in the ease of connection. If you go to those traditional giants and ask them to add securities functions to your services, just opening an account could take months, sometimes even years. Moreover, what you get during the connection phase is not an API, but often vague specifications or documents. In some cases, you are even required to communicate via Excel. This has been the norm in the industry."

This is similar to what happened in the payments industry in the past. There was a time when merely enabling online payments required a lot of paperwork and phone negotiations. Stripe replaced that process with a few lines of code. Yoshi states that Alpaca is trying to do the same in the securities field.

• Yoshi: "We are now in an era where developers have decision-making power. In this context, traditional formats are no longer a viable option. When developers look for the right infrastructure, there are no other choices. Only we provide direct API-based brokerage services that connect to the back and middle office. With this API, there is no need to build a brokerage from scratch. Large enterprises can connect to it, and individuals can write their own automated trading programs. We do not restrict how it is used."

Alpaca's moat, or entry barrier, is not just its licenses. Instead, it lies in a philosophy that is missing in traditional securities: trusting developers and giving them freedom.

• Yoshi: "We believe that once you decide how the API should be used, it is no longer just an API. The essence is that developers can use it as they wish. Initially, our API had no additional features. It was basically bare. Developers gathered around it and later created use cases, including automated trading. We believe this developer-first philosophy enables us to establish a unique position while always keeping an eye on existing players like Interactive Brokers."