Cicada, a U.S.-regulated trading platform, has secured $13.5 million in a Series A funding round led by global banking giant Citi. The investment is aimed at accelerating the electronification of Latin America's local-currency bond markets, which remain largely manually traded. Key participants include the Brazilian Stock Exchange's venture arm L4, Kaszek, Dila, and Crestone, signaling strong institutional backing for the initiative.
Modernizing a Traditional Marketplace
Latin America's local-currency bond markets have long operated through traditional, voice-driven methods, creating significant inefficiencies for investors. In Mexico's substantial $500 billion fixed income market, for example, over 98% of daily trading is still conducted non-electronically. This reliance on manual processes limits transparency, liquidity, and access for global capital.
Cicada addresses this with its SEC-registered alternative trading system (ATS), which establishes a fully electronic, all-to-all marketplace. This structure directly connects global buy-side and sell-side institutions, fostering a level playing field for all participants. The platform is designed to enhance transparency and strengthen North-South capital flows.
A Strategic Approach to Funding and Liquidity
The funding round is notable for its combination of strategic capital and a program designed to ensure deep liquidity from the outset. Citi's leadership, complemented by investment from B3's L4 venture arm, provides critical institutional validation and market expertise. This backing is fundamental to building core infrastructure for emerging-market debt.
A parallel strategic equity program offers select market makers a stake in the platform, directly aligning their interests with Cicada's growth. This model incentivizes consistent participation from leading Wall Street liquidity providers, accelerating the formation of a robust trading environment. By anchoring liquidity through committed partners, Cicada is building a sustainable marketplace.
Advanced Trading Technology and Features
At the core of Cicada's offering is the introduction of one of the first central limit order books (CLOB) for Mexican local-currency bonds. This feature provides a transparent mechanism for price discovery and order matching, a significant upgrade from opaque voice negotiations. The platform also includes proprietary spread-trading functionality and unique execution protocols.
These advanced tools empower institutional participants with more sophisticated execution strategies that were previously unavailable in this market. As Co-CEO Javier Hernandez noted, the platform brings institutional-grade capabilities to a market that has long needed modernization. This technological leap is poised to reshape how billions of dollars in daily volume are traded.
A Roadmap for Regional Expansion
The new capital will fuel an ambitious expansion strategy focused on enhancing commercial operations and platform liquidity. Cicada plans to introduce new products and extend its model to additional Latin American geographies, capitalizing on the accelerating trend of electronification. A key focus will be deepening integrations with established third-party global platforms.
A significant part of this expansion includes developing an electronic execution venue for interest rate swaps, initially targeting the Mexican TIIE market. This market boasts average daily trading volumes of approximately $24 billion, representing a massive opportunity for efficiency gains. This move signals Cicada's intent to become a comprehensive trading infrastructure provider for the region.
This funding round marks a pivotal moment for Cicada and Latin American financial markets, signaling a definitive shift toward electronic trading. The strategic backing from Citi and other key institutions provides the capital and credibility needed to overhaul an underserved, multi-billion-dollar market. Cicada's initiative is set to enhance efficiency, transparency, and global access to the region's fixed income assets.