(Bloomberg) — Citadel Securities LLC, the electronic market maker founded by billionaire Ken Griffin, landed its first outside investment, giving the firm a valuation of about $22 billion.
The firm received a $1.15 billion investment from venture-capital firm Sequoia Capital and cryptocurrency investor Paradigm, the companies said in a statement Tuesday. The funds will be used to support global growth and could potentially lead to an initial public offering at a later date, according to people with knowledge of the plans. A representative for Citadel Securities declined to comment on the IPO plans.
The investment was led by Sequoia, and Sequoia partner Alfred Lin will join the board of Citadel Securities.
Citadel Securities has become a corporate behemoth in trading, taking market share from big banks and dominating the market-making business for stocks and options. Its institutional business now has more than 1,600 clients, including sovereign-wealth funds and central banks. The firm, which is active in more than 50 countries, is also among the largest designated market makers on the New York Stock Exchange, with over 2,000 listed securities.
Griffin founded Citadel, a separate hedge fund business, in 1990, and it now has about $43 billion in investment capital. He later established Citadel Securities.
For years, it was impossible to know just how profitable closely held Citadel Securities was, until it borrowed money in the leveraged-loan market to fund growth. The Chicago-based firm benefited from a surge in volatility during the Covid-19 pandemic, posting $6.7 billion of net trading revenue in 2020, almost double the previous high in 2018.
Citadel Securities brought in $4.1 billion of earnings before interest, taxes, depreciation and amortization in 2020, also a record. The firm had estimated that it commands 27% of equity volume market share in the U.S., according to a presentation to investors.
The possible IPO plans were reported earlier Tuesday by the Wall Street Journal.
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