Nivaura, a fintech startup tokenizing traditional financial instruments, has completed a $20m seed round, Forbes reports.
The London-based startup works on developing financial products which focus on removing the intermediary from the process of issuing market bonds. The platform facilitates direct transaction between investors, which are tokenized (or registered), on a blockchain network.
The London Stock Exchange (LSE), the sixth largest stock exchange in the world, has led the funding of the seed round. Banco Santander, a Spanish-based multinational commercial bank, announced on Twitter that it participated in the seed round as well. The law firm Allen & Overy, a s well as venture capital firm Digital Currency Group joined the LSE and Santander in the seed round.
📌 Santander InnoVentures, our fintech venture capital fund, adds @Nivaura to its investment portfolio.
The London-based fintech deploys digital investment banking platforms for banks which can use distributed ledger technology.
— Banco Santander (@bancosantander) 27 февраля 2019 г.
“In the traditional world, you have this complex and paid chain of custody that can be eliminated using a blockchain. But also the cost of custody potentially goes down for the investors as well,” said Avtar Sehra, the CEO of Nivaura.
According to company’s CFO, Gavin Youll, the company already has around ten active commercial deals, which bring around $1 million of revenue annually. For sure, the generated amount will significantly increase with the new staff and funding in place.
“At the moment, if I settle and hold securities to a traditional chain of custody, I’m going to pay a basis-point fee. That means if I’m holding $10 billion I might be paying like 5 basis points. However, in the blockchain world, I think it’s going go down to a volume-based fee rather than value-based,” adds Sehra, who holds a PhD in Theoretical Physics.
Previously, he held various leadership positions in investment banking and consulting companies such as HSBC, Deloitte, Lloyds Banking Group and PremFina.
“The investment strengthens our existing relationship with Nivaura and underlines the Group’s partnership approach in innovating to support our clients in accessing global investment pools,” said Nikhil Rathi, the CEO of London Stock Exchange plc.
As part of the investment, Nivaura will also gain significant experience and knowledge on the board, as LSE’s CEO Rathi and Spencer Lake, the former head of global markets for HSBC, will join the startup’s board.