Charlotte-based Edge Tradeworks has been acquired by Miami's Capstack Technologies in a deal established to bolster banks.
Edge, founded in 2016 and backed by FTX Ventures, serves as a whole loan trading and bank analytics platform. Capstack, founded last year, is also a loan trading platform for financial companies. The acquisition, finalized in late June, allows both businesses to bring whole loan and participation trading for banks under a single platform.
Financial terms of the transaction were not disclosed.
The deal comes as risk mitigation, diversification and liquidity access are crucial for financial institutions, Capstack said. Merging the businesses' platforms eliminates any restrictions around size and transaction type. Capstack also said the acquisition allowed it to gain the highest volume of buyers, sellers and transactions on its platform. That provides for more liquidity and trading capacity for both loan and deposit markets.
"After building Edge into a successful platform with hundreds of users, co-founders John Roberts and Hughie Choe recognized the potential to be part of a transformative, one-of-a-kind platform by joining forces with Capstack,” Michal Cieplinski, Capstack founder and CEO, told CBJ.
Edge's clients included regional and national banks, credit funds, credit unions, and other nonbank financial institutions.
Cieplinski said Choe and Roberts will join Capstack's senior leadership team, along with Chief Technology Officer Alex Dorsch.
"They will be focused on continuing to build out the whole loan trading platform within Capstack," Cieplinski added.
The combined platform has several hundred million dollars in transaction volume, according to Capstack. There are about 15 employees with the merged team. Edge's whole loan trading product has been rebranded to Capstack Edge, said Cieplinski.
“Capstack offers customers an unparalleled level of liquidity and ability to manage risk from within their loan portfolio, where the bulk of the risk lies," said Roberts, CEO of Edge, in a statement.
The merger comes after Capstack announced in March an investment from Citi Ventures, establishment of a high-profile advisory board and new additions to its leadership team.
