Andreessen Horowitz, Point72 Invest in Crowd-Sourced QuantopianBy
Boston-based Quantopian gets $25 million in funding round
Quant network gears up to manage outside money by 2017
Andreessen Horowitz and Steve Cohen’s Point72 Ventures are among investors in a $25 million funding round for Quantopian Inc., the five-year-old online platform where coders build and run computerized trading programs.
The Boston-based firm plans to use the money to enhance its platform, adding portfolio optimization tools and providing more data for algorithms written by its 100,000 or so members. Quantopian is also using the funding to beef up its investment management infrastructure in preparation for plans to start managing outside capital by early 2017.
It’s another vote of confidence for the crowd-sourced quant model, in which programs written by anyone -- professionals, academics, amateurs -- do Darwinian battle with one another in a quest for prestige and, increasingly, money. The latest financing round is separate from $250 million earmarked by Cohen’s venture capital unit to be managed by the site.
Quantopian provides its users with tools and software to write automated trading strategies.
“I think of Quantopian as the next-generation BlackRock,” said Alex Rampell, a general partner with Andreessen Horowitz, who will be joining Quantopian’s board. “They can become a very large asset manager, but hopefully in a way that no one else can replicate by aggregating and harnessing the best talent.”
For more than a year, Quantopian has held programming contests, trading venture-backed capital on the winning strategies and sharing those profits with the algorithms’ writers.
As a part of the push to operate more like a traditional hedge fund, albeit using crowd-sourced algorithms, Quantopian hired Jonathan Larkin, a former portfolio manager at Hudson Bay Capital, as its chief investment officer in June.
“Previously, existing firms were dismissive of our platform and our team,” said John Fawcett, chief executive officer of Quantopian. “There’s been a bit of a reversal since we’ve advanced our platform, added seasoned investment professionals and announced Point72.”
The funding round also had contributions from Khosla Ventures, Bessemer Venture Partners and Spark Capital.