Lake Forest-based FutureTrade Tech-nologies Inc., a developer of trading software for fund managers, has raised $10.6 million in a fourth round of venture funding.
Los Angeles-based Smart Technology Ventures led the round, which brings FutureTrade’s total raised to $45 million. Prior investors include Silicon Valley’s Menlo Ventures and Garage Technology Ventures.
Chief Executive Murray Finebaum said raising the money was relatively easy. FutureTrade even turned down more funding, he said.
“I had a career-altering experience in that I said no to (an extra) $5 million,” Finebaum said.
FutureTrade didn’t need the added funding, according to Finebaum. The round was spurred in part by the advice of investors who said “raise money when you don’t need it,” he said.
The company plans to spend the money hiring workers and buying computers, among other uses, Finebaum said.
FutureTrade now has 96 workers and plans to hire another 15 or so, he said. They’re likely to be product managers, sales support staff and integration engineers, he said.
The company doesn’t have any plans to go public or sell for the next couple of years, Finebaum said.
FutureTrade makes software for managers of hedge, mutual, pension and other funds, as well as for investment advisers.
The company’s software lets institutional traders access financial data from various sources and execute trades via subsidiary FutureTrade Securities LLC.
The software works with other programs to show traders news, their stock holdings and other data.
FutureTrade bills the software as a way for users to cut costs by ending the need for multiple data terminals.
The company, which got its start in 1998, rolled out its product to hedge fund and other managers in early 2002. Since then, the company said it has signed up more than 150 institutional investors.
There are some signs the company’s sales are going well.
FutureTrade said earlier this year sales for the first quarter were up 26% from the fourth quarter and up 264% from a year earlier. The company didn’t say what its sales were for the quarter.
The company isn’t profitable now but expects to be soon, Finebaum said.
Finebaum declined to say what the company was valued at in the latest funding round except to say that it was double its last valuation a year ago.
In 2002, the company moved into 25,000 square feet of Gateway Inc.’s old Lake Forest building from much smaller quarters in San Diego.
Earlier this year, FutureTrade bought Northern California’s Augend Tech-
nologies LLC, which runs an electronic options trading system.
FutureTrade could be in a good market. Banks and other financial institutions have snapped up several rivals.
Last month, Citigroup Inc. bought New York-based Lava Trading Inc., a provider of real-time financial data, for $750 million.
Finebaum sold an earlier company, Santa Monica-based bond trading software developer Trading Edge Inc., to New York-based MarketAxess Holdings Inc. in 2001.
FutureTrade is in a market that’s come under increased scrutiny in recent years.
This month FutureTrade and 17 brokerages were fined $1.2 million for violating rules set by the National Association of Securities Dealers that govern the reporting of customer orders.
New York-based SG Cowen & Co. was hit with the biggest fine, $800,000, for not reporting about 50 million orders during four years. FutureTrade Securities was fined $35,000.
None of the companies, including FutureTrade, admitted wrongdoing.
NASD said the violations of its “order audit trail” rules involved missing reports, inaccurate data and failure to correct defective data.
