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BFD Expert Voices - Private Credit

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Apex Fintech expects to beat the financial figures it projected in its proposed SPAC merger two years ago, despite the retail trading slump, CEO Bill Capuzzi tells Axios.

Why he matters: Apex's stock-trading technology underpins eToro, Sofi, Betterment and others, giving it more than $120 billion in assets under custody.

Context: For comparison's sake, Robinhood's annual revenue hit a peak in 2021 and has slowed as interest rates have risen.

Apex says it expects 2023 will be its best year ever, thanks to a growing international business and a newer segment selling to advisory businesses.

This conversation comes roughly two years after the company canceled a deal that would've taken the company public and valued it at $4.7 billion.

This interview has been edited for brevity and clarity.

Apex in its SPAC filing estimated that it would hit $418 million in operating revenue in 2023, with adjusted EBITDA of $178 million. Where is the company now?

We'll meet or outperform. We're expecting to have our best year ever as a company.

It sort of defies some logic, but I'll explain why. While the U.S. business is waning, what is still growing for Apex is the advisory business.

Our international business also continues to win firms outside the U.S. that want to offer access to the states. We're also in Software as a Service;  we acquired Silver, and we've been building out product there.

The last part that's really the wind in our sails for 2023: The Fed keeps raising rates.

So stock trading has slowed down — but there are other opportunities.

There are places (from interest income) in cash, in stock loan. We're also in proxy. Let's say you own a bunch of stocks in your TD Ameritrade account. The company might do a corporate action and do a stock split or issue a dividend. We get paid to process that dividend. And there's just been more proxy activity in 2023, because markets are starting to settle in.

Where is your head at now in terms of a potential IPO?

We killed the 2021 SPAC deal because we were way outperforming what we said we were going to do. At the same time, Apex Crypto was part of the company (later selling to Bakkt), which caused lots of challenges with the SEC. And that was not how we want to go public.

We had an out in the fall, and we took it. The goal at that point was to pivot directly into an IPO — and we actually filed an S-1. But then the market fell out, so we just paused.

The firm's ready for it, and there's active conversations right now with a bunch of bankers. But there's no urgency, because let's say we raise $500 million. What would we do with it? We're profitable. I don't need operating cash. So then we get into the M&A conversation.

I don't want to raise a bunch of money before we need it, because that just creates a bunch of unreasonable expectations for a company.

What are the bankers telling you on potential valuation?

They're not actually giving us a range on valuation. They've given us multiples, which you can translate. We were going to come out as part of the SPAC at $4.7 billion pre-money. That's pretty frothy.

I think the valuation is less than what it was back then, despite the fact that their numbers are much better — we're profitable. But I think we're getting back to a normal, multiple range, and today it puts us in range with the SaaS-type companies.

What are your thoughts on where Twitter is going with its stock trading plans?

We're powering that; they use eToro, which uses Apex. It's really yet to get going. I think for a couple of reasons: One, I think on the macro level retail investors are waning. Number two: If you've seen it on Twitter, it's not intuitive yet.

A lot of the question is, how do you reduce clicks outside of Twitter and make it compliant? Investing is hard, because it's not just about building amazing technology and creating great ergonomics. It's about complying with this myriad of rules and regulations that span different regulatory bodies and different asset classes. So that's the partnership with eToro and Apex.

Apex Fintech CEO talks stock trading on Twitter, weighs IPO

And gives an update on the company's finances.

Photo illustration of Bill Capuzzi with geometric shapes and the Wall St. bull.

Photo illustration: Shoshana Gordon/Axios. Photo: Courtesy of Apex Fintech

Fintech

Apex Fintech expects to beat the financial figures it projected in its proposed SPAC merger two years ago, despite the retail trading slump, CEO Bill Capuzzi tells Axios.Why he matters: Apex&#x27;s stock-trading technology underpins eToro, Sofi, Betterment and others, giving it more than $120 billion in assets <a class="gtmContentClick" data-vars-link-text="under custody" data-vars-click-url="https://apexfintechsolutions.com/industries/fintech/" data-vars-content-id="aab7e3ce-2a6b-47a0-b247-4f2f080b579d" data-vars-headline="Apex Fintech CEO talks stock trading on Twitter, weighs IPO" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://apexfintechsolutions.com/industries/fintech/" target="_blank">under custody</a>.

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Apex Fintech CEO talks stock trading on Twitter, weighs IPO

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