London Stock Exchange Group announced it led a $20 million investment round in London-based fintech startup Nivaura, which lets companies issue debt on blockchain. The digital platform allows financial instruments to be settled on existing clearing infrastructure or as digital tokens that are recorded on the public blockchain.
Earlier this year, LSEG had signed its first technology licensing deal with Hong Kong’s Atom Asset Exchange as the British-based stock exchange and financial information company has identified the merging cryptocurrency markets as an opportunity for expansion.
Nivaura is a three-year-old startup which targets the fragmented and manual processes involved in the issuance and administration of debt, equity, and structured products. Its technology was recently used in the administration of an automated cryptocurrency denominated bond issuance supported by Allen & Overy.
The funding round led by LSEG will be used to grow Nivaura’s tech team and move into new asset classes and jurisdictions: “Our focus for 2019 is on conducting a series of high profile, large-scale projects with high caliber partners to demonstrate our platform as a valuable solution across the full spectrum of capital markets primary issuance activities. Working with such partners with their wealth of experience will underpin our next phase of growth”, said Avtar Sehra, Chief Executive Officer at Nivaura.
The startup claims it can reduce the time from issuance to market for financial instruments by up to 80 percent. The Nivaura Direct Issuance Platform is an all in one solution for structuring, syndication and post-trade management, as well as investor communication and reporting.
Other investors include Santander InnoVentures, law firms Linklaters and Orrick, Aegon’s Transamerica Ventures, MiddleGame Ventures, Digital Currency Group, and ex-HSBC Spencer Lake.
Nivaura and the LSE have worked together in the past on the issuance of tokenized securities under the FCA’s regulatory sandbox. LSEG’s most recent blockchain activity includes a partnership with IBM, through subsidiary Borsa Italiana, to develop a securities data blockchain solution for European SMEs.
In January 2019, LSEG Technology, London Stock Exchange Group’s technology solutions provider, was selected by ATOM Group for its new digital asset exchange venue AAX.
A report by IHS Markit found that the finance industry blockchain market may reach $462 billion by 2030, representing explosive growth when compared to the value of blockchain in the financial sector in 2017, at $1.9 billion.