Vest Raises $13M to Build a Prop Trading Firm That Doesn't Bet Against Its Traders
Key Takeaways
- •Vest Labs secured $13 million in a funding round led by Portal Ventures, lifting the company's total capital raised to $18 million.
- •The round closed at $10 million in annualized revenue after daily revenue on the platform jumped from $25,000 to more than $1 million during two weeks in September.
- •Vest combines a perpetual futures exchange with an embedded prop trading model in which traders pay a one-time fee, cannot lose more than that fee, and the company never takes the opposite side of their positions.
- •As of late September, roughly a quarter of Vest's traders had received a payout, nearly four times the industry average, and monthly active traders and volume each expanded more than 300% month over month.
- •The new capital will fund a mobile app launch, additional markets, and team expansion as US equities move toward extended hours, with Nasdaq planning 23-hour daily trading starting in December.
NEW YORK, NY (PinionNewswire) — Vest Labs, the company behind the Vest Markets trading platform, has raised $13 million in a round led by Portal Ventures to build what it calls the most trader-friendly cross-asset exchange. The company closed the round at $10 million in annualized revenue, bringing total funds raised to $18 million.
Growth has accelerated sharply since then: daily revenue grew from $25,000 to over $1 million in two weeks in September, and more than 27,000 traders now use the platform — most of them traditional markets traders who have never traded crypto or perpetual futures.
A Perps Exchange With an Embedded Prop Platform
At Vest, traders have access not only to a full-fledged perpetual futures exchange but also to an embedded retail prop trading platform. Perpetual futures — leveraged derivative contracts with no expiry date, an instrument first popularized in crypto markets — remain unfamiliar territory for the traditional traders now arriving on the platform. Retail prop trading — a model in which traders pay a fee to prove their skill and then trade a firm's capital for a share of the profits — has grown by around 45% in the past year.
Most prop firms, however, take the other side of their traders' positions, so they make money when their traders lose. The result is complicated rules designed to end accounts before they pay out. Industry data suggests only around 7% of people who buy a prop firm evaluation are ever paid.
Vest is built differently. The company is not exposed to its traders' wins or losses, so it has no reason to write rules against them. Traders pay a one-time fee to trade in a simulated trading environment, can never lose more than that fee, and can trade stocks, indices and crypto 24 hours a day, seven days a week.
Payouts Nearly Four Times the Industry Average
The platform's recent hypergrowth among traditional markets traders comes from two things: trader-friendly rules and simplicity. As of late September, 26% of Vest traders had received a payout — nearly four times the industry average — and the exchange's monthly active traders and volume have grown more than 300% month over month.
“Most prop firms make money when their traders lose, so the rules are built to make you fail,” said Justin Ma, founder and CEO of Vest. “We don't make money when our traders lose, so we have no reason to work against them. We believe perpetual futures are the most trader-friendly way to trade with leverage, and that futures and options traders will move onto them. Funded accounts make that move easy, since traders can start without risking their own capital. This round lets us bring that to far more people.”
“'Against all odds' encapsulates what Vest is about. They say you need a massive marketing budget to win the attention economy. Vest did it with no ads, no token incentives, and no shortcuts. It is incredibly inspiring to witness this journey as an investor: just five years of relentless execution and an unwavering belief that the best product can sell itself,” said Catrina Wang, General Partner at Portal Ventures.
Funding Arrives as US Markets Move Toward 24-Hour Trading
The raise comes as US markets move toward round-the-clock trading, with Nasdaq set to extend stock trading to hours a day from December. Around-the-clock operation has long been the norm in crypto, and its spread into equities narrows a gap that Vest — which runs 24/7 across asset classes — was built around. The company will use the funding to launch its mobile app, add new markets and grow the team. Both the app launch and Nasdaq's December rollout are concrete near-term markers for how extended-hours trading develops.
About Vest
Vest builds trading products that give retail traders a fair shot. Vest Markets is a 24/7 venue for perpetual futures on stocks, indices, commodities, FX and crypto. Vest's funded accounts let traders pay a one-time evaluation fee, trade with real buying power once they pass, and never lose more than that fee. Every funded trade is placed in the real market, so Vest never takes the other side of its traders' positions.
Vest is backed by Portal Ventures, Coinbase Ventures, Amber Group, Selini Capital, Auros, Flowdesk and more.
Learn more at vestmarkets.com.
Media Contact Information
Jamie Kingsley — jamie@theprgenius.com
