Capital markets News

Deutsche Bank, UBS, Intel in enterprise blockchain firm Axoni $31m funding

capital markets derivatives trading

Yesterday enterprise blockchain firm Axoni announced it closed a $31 million funding from new investors Deutsche Bank, Intel Capital and UBS bringing total funds raised to $90 million. Existing investors also participated, including Citi, Goldman Sachs, HSBC, J.P. Morgan, Nyca Partners, and Wells Fargo.

The founders of Axoni are likely cash-rich at the moment. Back in 2013, they also started TradeBlock, a cryptocurrency analytics firm that provides pricing data, including XBX for Bitcoin. For example, the Grayscale Bitcoin Trust uses XBX for pricing. In January, Grayscale sister company Coindesk acquired TradeBlock.

Axoni’s technology is a customized version of the Ethereum blockchain.

“Citi continues to embrace new technology solutions that enhance end-to-end client experience, mitigate risk and deliver operational efficiencies. We are excited to continue supporting and partnering with Axoni to develop post trade solutions, drive common standards and help deliver significant benefit to the industry,” said Puneet Singhvi, Citi’s Head of Financial Market Infrastructure and Blockchain Lead.

Axoni is involved in numerous major capital markets projects, many of them around derivatives. The global market for derivatives is three times bigger than the markets for equities and bonds combined.

The biggest and oldest project is with the DTCC where Axoni provided its technology for the updated credit derivatives Trade Information Warehouse (TIW) platform.

The updated TIW platform was originally expected to launch in 2019 but has not yet gone live. That said, given TIW processes $9.9 trillion of cleared and bilateral derivatives, it would need to be bullet proof to launch.  

Another derivatives project is for equity swaps. That solution went live last year with 15 sell-side and buy-side firms, including City and Goldman Sachs.

More recently, Axoni partnered with OCC, the world’s largest equity derivatives clearing organization. Last year the firm processed 7.52 billion contracts and serves Nasdaq, the NYSE and CBOE. OCC acts as a central counterparty for securities lending and aims to replace its security lending infrastructure with distributed ledger technology (DLT) powered by Axoni.

There’s a fourth project for a consortium of banks called DirectBooks, which aims to remove frictions in securities issuance. Axoni is partnering for corporate bond issuance workflows, an area where there are numerous blockchain projects. Several of Axoni’s backers are DirectBooks participants, including Citi, Goldman Sachs, J.P. Morgan, and Wells Fargo.