HedgeStreet has raised $21.8 million of a $32 million Series D investment round, according to a regulatory filing.
The company, which offers options, futures and derivatives trading to common investors, raised the financing from Rubicon, Pareto Partners, Norwest Venture Partners, CrossBridge Venture Partners and the Chicago Board of Exchange through CBOE II LLC, an investment subsidiary. HedgeStreet previously raised nearly $29 million.
The company, based in San Mateo, Calif., offers binary options, called “Hedgelets,” on economic indicators and commodities. Its a platform for making derivatives trading as simple as buying stocks on E-Trade. A typical derivative contract might require half a million dollars just to make it worth the time it would take to write up. But HedgeStreet tries to democratize the practice by offering small-denomination bets on common contracts.
The company is headed by CEO Stephen Race, who oversaw the launch of the Playstation video game console in North America when he was president of Sony Computer Entertainment. And he was responsible for Reeboks PUMP technology taking off in the United States, according to his bio on HedgeStreets website.
Norwests Jim Lussier estimated there were already between 500,000 and 750,000 people heavily trading in the futures markets when he invested in the companys $12.5 million round in March 2006. The investors hope HedgeStreets offerings will appeal to that group and radiate out to the estimated 25 million Americans that have online trading accounts.