Why This Ex-Quant Quit a $10B/Day Job to Build a 24/7 Stock Exchange | QFEX, Annanay Kapila
In a Nutshell
Annanay Kapila, ex-quant at Flow Traders and Tower Research handling $10-100B daily, quit high-frequency trading's "golden handcuffs" due to its exploitation of market flaws and zero societal value, launching QFEX—a 24/7 global stock exchange for fairer, efficient trading via streamlined clearing and transparent low fees. Inspired by FTX's innovations (despite SBF's crimes), he co-founded with ex-Citadel engineer Josh, raised $95M pre-revenue from General Catalyst and Next Venture Partners post-Y Combinator, emphasizing massive scale over quick exits. Key takeaways: Quant finance traps talent in wasteful pursuits; build life's work for impact, not bonuses—ask if you'd proudly tell your kids about it or if it'll last 5-7 years.
These notes were generated by AI and may contain inaccuracies.
Worked as a quant in high frequency trading, responsible for strategies handling $10 to $100 billion a day—roughly the GDP of France. Earned big paychecks but felt like wasting life. High frequency trading exploits market inefficiencies due to structural design flaws in existing markets. People in trading focus on making money for big bonuses.
Founder and CEO of QFEX. Previously in quant finance sector, realized financial markets infrastructure is broken. Building next 24/7 global stock exchange to revolutionize trading.
Raised from two major funds: General Catalyst and Next Venture Partners at $95 million valuation while pre-revenue. Only point in raising venture money is to be truly massive, making it hard for VCs to say no.
Born in India, moved to UK, studied maths at Cambridge University. Growing up not wealthy, quant trading job paid a lot. Had option for PhD but money too good to pass up. After Cambridge in 2020, worked at Dutch HFT firm Flow Traders for a year, then headhunted to American firm Tower Research Capital for almost 3 years.
As a quant trader, first thing upon waking: check work laptop for how much money made that day. Everything data-driven, trading from data, not talking to people.
Analogy for quant finance: like running a car dealership—buy cars slightly lower, sell slightly higher, profiting from high volume. S&P 500 future on CME trades $500 billion a day, more than GDP of any country.
Cognitive dissonance among quants and traders: convince themselves earning big paychecks means doing good for world.
HFT exploits inefficiencies like futures expiration every three months (originally tied to Midwest crop harvests—no longer needed). Expiration forces selling one future and buying next, incurring transaction costs; HFT captures the other side.
No one in quant trading wakes up thinking how to make markets more efficient or lower costs for consumers. Focus is on bonuses.
Tower Research Capital has high-quality talent: international math Olympiad medal winners, top 50 in India's entrance exam for top technical universities (JEE?). Stuck in golden handcuffs, paid too much to leave.
Quant finance sequesters talented people in industry adding no value to world—source of guilt, feeling of wasting life.
Advice: Think carefully why doing it. Is this what you want in 5-7 years? Almost nobody plans to stay 5 years; many say 2-3 years then something else, but stay due to failing to re-evaluate.
Towards end at Tower, life events aligned to leave and build startup. FTX was profitable, backed by Sequoia, high valuation. Doesn't defend SBF—what he did was wrong, deserves prison—but products were innovative and good. FTX tried US licensing, purchased a US exchange.
Had idea for what is now QFEX 6 months before FTX collapse. Burning desire to improve markets from HFT experience: improve market design so HFT firms don't extract money from investors, making markets fairer.
Late 2024/early 2025, pitched to co-founder Josh (best friend since age 18). Josh worked at Citadel on engineering side. Idea: obviously better market design, will exist in 5-10 years—either incumbents do it or we do. Josh left Citadel job.
Had money saved, no financial pressure. Left Tower in February 2025 to make life's work.
Applied to Y Combinator. Got interview while in Austria; flew back to London same day. YC tests understanding of problem and 'why now'. PG explained they fund if probability of success >0%, even 1%, for huge ideas with good team.
Aware company is zero or huge (e.g., $50 million)—not a $10 million business. YC confirmed huge idea, right team. Got offer next day.
Building fintech tough: can't launch if it breaks, breaches trust.
Hardest day during YC: launched exchange internally to YC partners early (forced for feedback). At 3 a.m. jetlagged, exchange blew up—results showed +$1M/-$1M despite only $100 allocated. Spent day reconstructing, reimbursing. First company loss, small scale.
Hit home: difficulty of 24/7 perfect availability—lightning, data center fire, etc. Didn't sleep for days. YC partners forced launch to realize gravity.
Best and worst days: 100 hours/week, focused, frenetic.
Fundraising in Silicon Valley quick: < $500K checks = 30-min meeting, decision on call. Bigger checks: 30-min meetings.
Day one: angels, then stopped for bigger funds. General Catalyst, Next Venture Partners at $95M pre-revenue valuation.
To raise VC, must be huge scale.
London/New York obsessed with money (current earnings, future). San Francisco (lived 4 months) focuses on impact. Lived in SF useful.
HFT doesn't lose money; bad days get boss emails. Silicon Valley: aim for billion in 5 years, ignore money.
Goal: equal playing field. Example: buying Tesla on NASDAQ via Robinhood involves intermediary clearing house for risk/settlement—three companies for one trade. QFEX does it as one efficient company.
Transparent pricing: money only from fees (as low as possible), no profit-share. Give fees back for referrals.
Like Stripe reducing payment frictions; QFEX reduces trading frictions. Small improvements in high-volume markets have massive impact.
Best founders see company as life's work, legacy—beyond money. Ready to be change in world: obvious needed change few can work on.
Final advice: Is this what you tell kids you spent life doing? Will job exist in 5-7 years? Young people: optimize for learning/growth, not current money.
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