From quant trading to building a 24/7 global stock exchange

Executive overview

Modern stock markets are structurally broken — futures expire arbitrarily, three separate companies handle a single trade, and high-frequency traders extract billions by exploiting these design flaws. Annanay Kapila spent years at Flow Traders and Tower Research Capital running strategies that moved $10 billion a day before concluding that quant finance "adds no value to the world."

He left in February 2025 to co-found QFEX, a 24/7 global stock exchange that collapses the broker/exchange/clearing-house stack into one transparent, low-fee platform. QFEX raised at a $95 million valuation pre-revenue through Y Combinator and funds including General Catalyst and Nexus Venture Partners.

The real edge in markets isn't smarter trading — it's fixing the market design itself.

Why quant finance felt like a waste

• Strategies at Tower and Flow Traders moved $10–100 billion daily, exploiting structural flaws rather than creating value.
• S&P futures expire every three months — a relic of crop-harvest cycles — forcing investors to pay transaction costs on rollover, which HFT firms capture.
• High-talent colleagues (International Math Olympiad medalists, IIT top-50 graduates) are trapped by "golden handcuffs" — paid too much to leave.
• Almost no one Annanay spoke to planned to still be there in five years; most still were.
• FTX's collapse clarified both the failure of bad actors and the genuine innovation possible in exchange design.

Building QFEX

• Co-founder Josh came from Citadel's engineering side; both left well-paying jobs with savings to remove financial pressure before starting.
• Applied to Y Combinator; got the interview call while Annanay was watching opera in Austria; flew back to London the same day.
• YC's core question: is the probability of success bigger than zero? If the idea is huge and the team is right, that's enough.
• The exchange is binary in outcome — "$50 million or zero" — not a $10M ARR business.

The hardest day: exchange meltdown during YC

• YC partners pushed an early internal launch to force real user feedback.
• The exchange blew up: one user showed +$1 million, another −$1 million, despite each receiving only $100 to trade.
• The team spent the day reconstructing every position, determining true balances, and covering losses out of pocket.
• Lesson: a 24/7 system must be perfect — any failure at scale is "game over" for an exchange.
• The incident forced a reckoning with the engineering gravity of running always-on financial infrastructure.

What QFEX actually does differently

• Collapses three intermediaries (broker, exchange, clearing house) into one platform — reducing friction like Stripe did for payments.
• Fully transparent fee structure; no payment-for-order-flow arrangements.
• Fees returned to users via referrals; pricing visible to all participants equally.
• Goal: a level playing field where retail and institutional traders face the same market structure.

Fundraising mechanics

• Angel checks under $500K: 30-minute meeting, decision on the call or immediately after.
• Larger funds (General Catalyst, Nexus): two 30-minute meetings, then term sheet.
• Pre-revenue raise at $95 million valuation; VCs funded on scale of ambition, not current metrics.
• San Francisco investor culture focuses on impact and scale; London/New York culture focuses on current earnings — a meaningful mindset shift.