Alternative trading system OpenYield has closed more than $6 million in Series A funding, with the potential to further expand the round.
LeveL Markets led the investment with additional participation from Draper Associates, Canapi Ventures and Clocktower Ventures.
The funding comes with a commercial partnership: LeveL Markets will integrate OpenYield into its equities platform, giving LeveL's institutional clients a direct path to OpenYield's bond liquidity, according to a press release.
Founded in 2023 and launched the next year, OpenYield operates an "all-to-all venue where any participant can trade with any other," the release said.
"Most of the technology that powers the bond market was designed for a world where a human picked up the phone," said Jonathan Birnbaum, founder and CEO of OpenYield. "That world is gone. Dealers now quote bonds in milliseconds, but the venues investors trade on haven't kept up. We built OpenYield to close that gap."
Eventually, the firm wants to trade with everybody in the market, so it's about figuring out the right time for people to come on and start trading, he said.
The main use of proceeds is to invest in distribution. There are multiple segments the firm wants to onboard to the marketplace, so it's all about distribution and growth, Birnbaum said.
This partnership is just one way OpenYield plans to continue growing.
The firm's ATS has executed almost $2 billion in volume to date across munis, U.S. Treasuries and corporates. The company has signed over 60 institutional clients.
OpenYield has other projects on the horizon, including plans to announce Model Context Protocol, or MPC, access to the marketplace, which enables agentic trading, Birnbaum said.
As the market becomes more electronic, "you need to have a system that consumes all these prices, and then you want to trade at the best price, and that's how we compete in the market," he said.
For LeveL, the partnership with OpenYield extends a strategy of putting its "equity-market connectivity" to work in new asset classes, the release noted.
"Our partnership with OpenYield is a pivotal step in bringing traditional market standards and efficiencies to the fixed income market," Steve Miele, CEO of LeveL Markets, said in a statement. "Through this collaboration, we are creating a more streamlined and accessible trading environment that can broaden participation, improve market access, and enhance the overall investor experience."
