The new funding will be focused on expansion efforts and growing iSTOX’s investment offerings.
Singapore-headquartered digital securities platform iSTOX has closed its Series A fundraise at US$50 million, the company announced in a statement yesterday.
With the close, the company welcomes four new investors from Japan, including government-backed Japan Investment Corporation’s venture arm Venture Growth Investments (JIC-VGI), state-owned Development Bank of Japan, Juroku Bank and venture firm Mobile Internet Capital.
The 2017-founded fintech company’s latest round also saw existing backers Singapore Exchange, Japan’s Tokai Tokyo Financial Holdings and Korea-based Hanwha Asset Management take part.
iSTOX offers issuance, custody and secondary trading services for digital securities as a multi-asset issuance platform. It enables the issuance of fractional securities across a combination of asset classes in the private market, such as equity and debt, hedge funds, real assets, and venture capital.
For instance, in December 2020, the company listed the world’s first ‘unicorn fund’. The digital securities-based ICHAM Unicorn Opportunity Fund offers a diversified portfolio of late-stage private unicorns in the U.S., Europe and Asia.
“This round signals a rising confidence in the iSTOX digital securities platform and our business model,” Oi Yee Choo, CCO at iSTOX, said in the statement. She noted that investments from existing backers signaled “that investors who have engaged with iSTOX for some time continue to have strong conviction in our mission and our potential.”
“With the new financing, iSTOX will expand our footprint both geographically and in terms of investment offerings. We will roll out private issuances by blue-chip issuers that individual investors on our platform can subscribe to in bite-size portions,” Choo added. iSTOX’s expansion efforts in in China, Europe and Australia will continue, she also said.
iSTOX combines multi-asset fractional trading with blockchain and smart contracts
iSTOX is owned and operated by ICHX. It graduated from the Monetary Authority of Singapore (MAS) Fintech Regulatory Sandbox in February 2020, obtaining a full MAS license, the statement noted.
It raised its first Series A round in September 2019 for an undisclosed amount from Thai investment bank Kiatnakin Phatra Financial Group, an earlier statement from the company said. Prior to the funding, iSTOX had raised $3 million in seed funding from Singapore-based financial group RF International Holdings.
The company signed a memorandum of understanding with China’s Chongqing Monetary Authority in November 2020, the statement noted. The MOU was iSTOX’s first overseas foray, allowing it to establish a digital securities exchange in Chongqing.
iSTOX uses blockchain and smart contract technologies for the creation of security tokens, banking on automation to help the company manage large pools of small investors. iSTOX’s proprietary exchange also allows secondary trading of securities, creating additional liquidity.
Tokenization further helps security issuers offer lower fees and minimum fundraising threshold, enhanced speed to issuance, and lesser uncertainty, the statement noted.
iSTOX’s model enables it to reach a wider investor base outside institutional or private banking clients, bringing minimum investment ticket sizes down to US$20,000, from the typical US$1 million for private market investments, the statement said.
Private market investments have shown significant growth over the years, with assets under management growing 170% over the past decade to reach $6.5 trillion as of 2019. Asian markets reflected the strongest year-on-year growth, followed by Europe.
“We have decided to participate in the launch of the next generation of digital financial services and platforms covering Asia. We believe that this project will also contribute to the development of Japanese financial services. We look forward to working with iSTOX’s management and shareholders,” CEO of JIC-VGI, Hideki Yarimizu said in the statement.
Header image courtesy of iSTOX