Capitolis raises $220m at $1.9bn valuation to fund eSecLending buy

Capitolis has secured $220 million in combined equity and debt financing to fund its $200 million all-cash acquisition of securities lender eSecLending, lifting the US-based fintech's valuation to $1.9 billion.

The package splits into a $120 million Series E equity round and $100 million in debt, according to reporting from FinTech Futures on October 7. Citi, already on the cap table, led the Series E.

New backers Bank of America, Nomura, and Tradeweb Markets joined existing shareholders Barclays, BNP Paribas, JP Morgan, State Street, and UBS in the equity tranche. The depth of the bank syndicate underscores how deeply entrenched Capitolis has become inside the world's largest dealers.

Who is providing the debt?

First Citizens Innovation Banking, the entity that absorbed the former Silicon Valley Bank, supplied debt capital alongside Hercules Capital and Pinegrove Venture Partners. Together, the three lenders give Capitolis the financing firepower to close the purchase of eSecLending from private equity owner Parthenon Capital, an all-cash deal agreed in late September.

What is Capitolis buying?

eSecLending brings agency securities lending, auction capabilities, and collateral management infrastructure. Capitolis operates a financial resource optimisation platform that helps banks and asset managers free up balance sheet capacity. The combination positions Capitolis to capture more of the post-trade workflow around securities lending, a market historically dominated by a handful of large custodian banks.

How does this round compare to prior history?

The $1.9 billion valuation marks a 19% step-up from the $1.6 billion post-money Capitolis carried after its $110 million Series D four years ago. That round was led by Canapi Ventures, SVB Capital, and 9Yards Capital, the firm founded by former UK Chancellor George Osborne.

Capitolis was founded in 2017 by CEO Gil Mandelzis, who remains in the role. The company did not disclose employee headcount, revenue, or specific terms of the eSecLending purchase price beyond the headline $200 million figure.

What does the broader hiring and M&A pipeline look like?

The eSecLending transaction caps a busy year for Capitolis on both the operational and corporate development fronts. In July, the company hired Fractal's Ashwath Bhat as chief financial officer. Last month, it appointed Bank of America veteran Murugan Manickam as chief technology officer.

The dual appointment signals a scaling-up phase ahead of the integration. Capitolis will need to onboard eSecLending's staff, fold its agency lending book into the existing platform, and manage the cultural and technical integration between two distinct securities financing businesses.

What's the so-what for the market?

The bank-heavy investor roster, including three of the four largest US dealer banks and a clutch of European balance sheet providers, suggests Capitolis is positioning itself as shared infrastructure for the sell side. With banks under continuing pressure to optimise collateral and lending workflows, platforms that aggregate and automate those processes are gathering momentum.

The Series E leaves roughly $20 million of headroom over the $200 million deal price, assuming financing costs remain modest. How Capitolis allocates that buffer — to integration, additional bolt-on M&A, or balance sheet liquidity — will shape its competitive standing against incumbents in the securities finance market in the quarters ahead.