iSTOX has rebranded to ADDX as it enters a phase of fast-paced growth and the firm pledged to double the issuance deals it completed in 2020.
The digital securities exchange has also launched a mobile app for users to invest in private markets on the go as the firm facilitates issuance deals, including private equity (such as pre-IPO unicorns), structured products, products that provide exposure to cryptocurrencies, as well as commercial papers.
The fractional ownership made possible by digital securities allows investors to manage risk and to pick and choose holdings with the goal of reducing correlation to the public markets and to their overall portfolio.
Product lines rolled out in 2020 include hedge funds, private REITs, and wholesale bonds – forming a more complete range of private market offerings. With a wider range of products,
The newly-launched ADDX mobile app is expected to help the firm expand its private markets business as users as increasingly investing via mobile platforms. They can use the app to view their current investment holdings or to trade.
ADDX, formerly known as iSTOX, expects to grow to about 100 employees by the end of the year, up from 70 at the end of 2020. The firm plans to recruit product managers, UI/UX designers, developers, blockchain researchers, and capital markets associates.
Oi Yee Choo, Chief Commercial Officer of ADDX, said: “The rebranding to ADDX marks an important milestone in the company’s journey. iSTOX was launched in 2017 with just four team members, focused on making safe and regulated Security Token Offerings – or STOs – a reality.
“We achieved that when we were licensed by the Monetary Authority of Singapore (MAS) as a financial institution last year. With ADDX, we are supercharging our growth towards the same mission of democratising the capital markets. The demand for fairer and more equal investing opportunities for accredited investors has never been greater, and we have built the infrastructure to make those opportunities available for the first time.
“The new mobile app, product lines and issuances planned for 2021 reflect a new ambition and new pace of expansion. We will become the single platform accredited investors go-to for all their private market investing needs. In the longer term, we hope to serve retail investors as well.”
ADDX sees technology transforming the private markets in a profound and fundamental way as digital securities are significantly more efficient than traditional ones.
“They allow much broader access to the private markets by both issuers and investors, matching capital with fundraising companies at a faster speed and lower cost. Eventually, the line between the private and public markets will blur, because substantial capital can be raised before an IPO happens – if companies find IPOs to still be relevant”, said Oi Yee Choo.
“Individual investors benefit from participating in the higher-growth phases of companies, while companies have more space to focus on their long-term plans if they can put off a public listing for a few more years. A revolution of this nature in the capital markets has not happened since the advent of electronic trading. There is no turning back the clock”,
Founded in 2017 as iSTOX, ADDX is fully regulated by the MAS as a platform for the issuance, custody and secondary trading of digital securities, also known as security tokens.
The firm automates manual processes in the private markets to reduce minimum investment sizes for accredited investors from US$1 million to US$20,000. Investors can trade their securities on the ADDX exchange, which settles trades instantly, compared with the 2 or more working days needed on other exchanges.
Issuers benefit from digital securities through lower fees, a lower minimum fundraising threshold and a faster speed to issuance, which reduces uncertainty in a rapidly-changing business landscape.
Accredited investors on the ADDX platform come from 27 countries, spanning Asia, Europe, the Americas (excluding the US), Australia and New Zealand.
The firm raised US$50 million in a Series A funding round led by Japan government-backed investors, including JIC Venture Growth Investments (JIC-VGI) and the Development Bank of Japan (DBJ). Japan’s Juroku Bank and venture capital firm Mobile Internet Capital also joined as new shareholders.
Existing shareholders Singapore Exchange (SGX), Japan’s Tokai Tokyo Financial Holdings and Korea’s Hanwha Asset Management added to their holdings in that round.