Vest Labs, the company behind the Vest Markets trading platform, has raised $13 million in a funding round led by Portal Ventures. The capital will be used to expand its cross-asset exchange, which aims to be more trader-friendly than traditional prop trading firms.
The company closed the round at $10 million in annualized revenue, bringing its total funding to $18 million. Since then, growth has accelerated sharply, with daily revenue jumping from $25,000 to over $1 million in two weeks during September.
More than 27,000 traders now use the platform, most of whom are traditional markets traders who have never traded crypto or perpetual futures. Vest offers a full-fledged perpetual futures exchange alongside an embedded retail prop trading platform.
Retail prop trading, where traders pay a fee to prove their skill and then trade a firm's capital for a share of profits, has grown by around 45% in the past year. However, most prop firms take the other side of their traders' positions, meaning they profit when traders lose. This leads to complex rules designed to end accounts before they pay out, with industry data suggesting only about 7% of evaluation buyers ever receive a payout.
Vest operates differently. The firm is not exposed to its traders' wins or losses, so it has no incentive to write rules against them. Traders pay a one-time fee to trade in a simulated environment, can never lose more than that fee, and can trade stocks, indices, and crypto 24/7.
Vest's recent hypergrowth among traditional traders stems from trader-friendly rules and simplicity. As of late September, 26% of Vest traders had received a payout, nearly four times the industry average. 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.”
Catrina Wang, General Partner at Portal Ventures, commented, “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.”
The raise comes as US markets move toward round-the-clock trading, with Nasdaq set to extend stock trading to 23 hours a day from December. Vest will use the funding to launch its mobile app, add new markets, and grow the team.
This article is for informational purposes only and does not constitute financial advice.
