Alpaca prepares to enter prime brokerage for hedge funds

Alpaca, the API-first brokerage startup out of San Mateo, is preparing to offer trade financing services to hedge funds. That puts it on a path into prime brokerage, a business long run by large banks. What Alpaca is building The plan centers on adding financing, margin, and securities lending to its existing infrastructure, all aimed at institutional clients. In July 2026, Alpaca raised $135 million in an equity round, part of a larger $435 million funding package earmarked for its API-first prime brokerage infrastructure. The company’s total funding has surpassed $300 million. It supports millions of brokerage accounts across more than 40 countries, and it has reported significant growth in both revenue and trading volume. Alpaca already counts hedge funds and proprietary trading firms among its users, offering them commission-free algorithmic trading, low-latency APIs, competitive margin rates, and access to easy-to-borrow securities. The plumbing behind the pitch Alpaca is a FINRA-regulated, self-clearing broker-dealer, meaning it handles the clearing of its own trades rather than renting that function from someone else. It has also secured memberships with the DTCC, OCC, and F...