Before Cactus Raazi became a star salesman at Goldman Sachs, before he pioneered electronic bond-pricing -- even before he started calling himself Cactus -- he’d purposely send his burnt-orange 1979 Toyota Corolla skidding through the rain-soaked Santa Monica High School parking lot.

“We came around the bend and what came into sight was our science teacher’s vintage car,” said Jason Bentley, a classmate who rode shotgun. “Thank God we didn’t hit it. We came so close.”

Twenty-five years later, Raazi is still careening, only now it’s called disruption. Through the firm he started in 2016, Elefant Inc., Raazi is trying to reshape how corporate debt trades. Elefant, which bills itself as a digital broker-dealer, uses software rather than traders to determine prices.

“At Elefant, we’ve replaced traders with algorithms and replaced salespeople with APIs,” said Raazi, referring to the code that allows computers to interact with servers. “Software-based pricing is here.”

Elefant has made more than 50,000 such trades -- and raised $15 million in equity capital, with access to an additional $250 million to fund its balance sheet. But the bond market resists change. Trading in stocks, currencies and futures has been screen-based for years, with transaction times measured in milliseconds. Big bond trades, however, are still made over the phone or by instant message.

Raazi isn’t the only one trying to transform this market, and plenty have failed in the past. But now, advances in machine learning are making it easier to sift huge amounts of information so Elefant’s algorithms can determine prices.

The changing environment is part of a broader trend that’s threatening the dominance of Wall Street banks in the corporate-bond market as more investors skip intermediaries and trade among themselves. And it’s bringing long-awaited changes like standardized pricing, automated trading and billion-dollar portfolio deals with it.

Kevin McPartland, head of market structure and technology research at Greenwich Associates, remembered being impressed with Raazi’s idea a few years ago but wondering if the time was right.

Now, however, “the market is ready,” McPartland said. Thirty percent of all bond trades are electronic, an all-time high, according to McPartland’s research. Pricing electronically is what’s new, he said.

“This is Cactus taking it to the next level, where there are immediately executable prices,” McPartland said.

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