Blockchain for Banking Capital markets Legal and IP

London Stock Exchange invests in blockchain startup Nivaura

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Today London-based blockchain investment banking startup Nivaura announced a $20 million fundraising led by the London Stock Exchange Group. Other investors in the round include Santander InnoVentures, lawyers Linklaters and Orrick, Aegon’s Transamerica Ventures, MiddleGame Ventures, Digital Currency Group, and Spencer Lake, the former vice chairman of global banking and markets at HSBC. Lake is joining the board along with Nikhil Rathi, CEO of London Stock Exchange plc.

Nivaura’s mission is to enable digital investment banking initially targeting incumbent institutions. That involves digitizing the issuance and administration of financial instruments. The company refers to bond issuance and tokenized securities as use cases but also supports derivatives (ISDA). For incumbents, servicing smaller deal sizes is often not cost effective. Hence Nivaura is providing a self-service platform.

In some ways, Nivaura is also a legal play, and its platform improves compliance efficiency. The company has worked closely on projects with Allen & Overy which has had board representation since the early days. The Financial Times named Nivarau as ‘one to watch’ for Legal Technology in the 2018 Intelligent Business Awards. And Linklaters and Orrick have invested.

“Our focus for 2019 is on conducting a series of high profile, large-scale projects with high calibre partners to demonstrate our platform as a valuable solution across the full spectrum of capital markets primary issuance activities,” said Nivaura’s CEO Dr. Avtar Sehra. “Working with such partners with their wealth of experience will underpin our next phase of growth.”

But Nivaura isn’t purely focused on the establishment.

One of Nivaura’s most recent wins was the January announcement that Canada-based Fineqia will white-label the Nivaura platform for a tokenized bond issuance test using the public Ethereum blockchain. Fineqia aims to enable cryptocurrency owners to leverage their assets by borrowing fiat money against bonds backed by Bitcoin, ether and others.

Fineqia were an existing Nivaura minority investor. Nivaura CEO Sehra previously worked as Head of R&D at PremFina reporting to Bundeep Rangar who chairs Fineqia and PremFina.

Sehra has an impressive resume with an MSc in Theoretical and Mathematical Physics from Imperial College London, and a Ph.D. in Theoretical Physics from Swansea University. For the last ten years, he’s worked in investment banking focusing on risk management including structuring loan securitization.

Nivaura was incorporated in mid-2016 and by the end of 2017 Nivaura had raised £2.5 million ($3.3 million). As of August 2018, Sehra owned 53% of the company. A company linked to CTO Marcello Fiori held a 13% stake and there was a 6.5% holding by Chairman Alan Morgan who previously was head of UK financial services at McKinsey & Co. At that stage, Digital Currency Group (owner of CoinDesk) owned 2% although it was also involved in the current funding round.