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LSE leads investors in start-up to automate investment banking

Bloomberg/Chris Ratcliffe

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Nivaura brands its product as an end-to-end automation process for managing a financial instrument’s whole life cycle.

Wednesday 27, February 2019

(Bloomberg) --A fintech firm that hopes to automate parts of capital markets received $20 million from an investor group led by London Stock Exchange Group that includes law firm Allen & Overy and Banco Santander.

Nivaura closed its seed round this week with pledges also from another magic circle law firm, Linklaters, and from Aegon. While the company -- known for executing the first Ether bond -- has grander ambitions of tokenizing equities and using the blockchain to clear securities, it’s focused for now on selling a platform that will help automate the issuance and execution processes of debt, equity and structured notes.

The funding round is more evidence that financial and professional firms are keeping a toe in the blockchain technology behind Bitcoin while turning more realistic about what can be achieved for now. JPMorgan Chase said this month it will introduce a prototype digital coin to speed up corporate payments.

“Structuring instruments, negotiating various things, executing and settling -- this is happening right now, this can be automated,” Nivaura Chief Executive Officer Avtar Sehra said in an interview. “Blockchain is irrelevant. What we think is going to happen is while we’re connecting into a clearing system now, you can just switch over with the click of a button to a blockchain.”

The London-based company, which was founded in 2016, plans to use the funds to support sales of the capital-markets platform and expand into Asia and North America, he added.

It can negotiate and formulate the instrument’s legal structure with various parties’ inputs and existing precedents, price it and distribute it to clients -- all within the same system.

For now, it’s not too practical to tokenize securities because of the regulations around securities depositories, as well as the dominance of fiat currencies, like dollars and euros, Sehra said.

LSE’s CEO Nikhil Rathi will join Nivaura’s board, which also includes Spencer Lake, former vice chairman of global banking and markets at HSBC Holdings. Santander and Aegon invested in Nivaura through their venture capital arms, and the cryptocurrency-focused venture-capital firm Digital Currency Group is also a backer.

 

TAGS : Nivaura, London Stock Exchange Group , Blockchain, JPMorgan Chase, Allen & Overy, Banco Santander

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