QuantConnect was founded in 2011 by Jared Broad. Broad started the company in his downtime while doing humanitarian work inChile. They became incorporated in 2013, and they were open-sourced in 2015. The company moved to Brooklyn, NY in 2016, and then company moved to Seattle, Washington in 2018. QuantConnect has raised $1 million over 2 funding rounds, and is funded by Start-Up Chile. QuantConnect has seen substantial user growth in recent years, going from 45,000 users in December 2017 to 55,000 users in May 2018 to over 65,000 users in October 2018. About half of the company's users are in the U.S. and the other half are international. QuantConnect added cryptocurrencies to its platform in October 2017, integrating with Coinbase’s GDAX exchange.
Business Model
QuantConnect enables the quick design of algorithmic trading systems by providing market data and a cluster computer directly to engineers around the world. The platform has about 70,000 users backtesting and building quantitative trading strategies across multiple markets, including equities, futures, options, cryptocurrencies, CFDs and FX. Once the team greenlights a user-generated algorithm, it is loaded into QuantConnect's Alpha Streams API and priced accordingly by the quant who developed it. According to Broad, about 5% of users consider their work with QuantConnect to be full-time. Rather, many algo traders use the platform's technology infrastructure to launch their own hedge fund startups. QuantConnect launched its Alpha Streams project in December 2017. This marketplace provides the community the freedom to license their alpha-generating insights to quantitative funds. Hedge funds that leverage the Alpha Streams API search for algorithms that fit their specific criteria and license them for a monthly fee. Quants earn 70% of these fees, which can run anywhere from $100 to $30,000.
Technology
QuantConnect supports coding in Python, C#, and F#, but also supports other languages through its open-source project, the Lean Algorithmic Trading Engine. LEAN is an open-source algorithmic trading engine that allows users to do the same algorithm design, backtesting, and trading that they can do on the website. Once users code an algorithm, they can run a backtest on historical data, which provides a full breakdown on how it could have performed in the market in the past. LEAN is free to download and extend for commercial purposes. As of December 2019, there are over 100 LEAN-Powered Hedge Funds and 62,000 live algorithms successfully deployed on LEAN, with nearly $3.1 billion of asset volume traded through the engine.
