SINGAPORE (REUTERS) - Private exchange iSTOX, backed by Singapore Exchange and other investors, said on Thursday (Jan 21) it is raising US$50 million (S$66 million) in its first major funding round, led by two Japanese state-backed firms.
The financing will enable iSTOX to expand in Asia and offer a range of investment products, Oi Yee Choo, chief commercial officer of the Singapore-based regulated trading platform told Reuters in an interview.
Ms Choo, formerly the Singapore investment banking chief of UBS till late 2019, said iSTOX expects more than 20 listings on its platform this year from the current six.
Japan Investment Corporation's venture capital arm and Development Bank of Japan agreed to come in as new investors, while existing backers such as Tokai Tokyo Financial Holdings and Singapore Exchange also joined the Series A funding, iSTOX said.
The trading platform offers issuance, custody and trading of digitized securities using distributed ledger technology. It aims to attract issuers and investors with instant trade settlement, lower costs and fractional ownership.
The tokenisation process represents converting rights to an underlying asset class such as shares of unlisted into a unique digital form, which then becomes eligible for trading.
"Smaller and younger family offices and external asset managers less covered by private banks are also looking for cheaper and more direct alternative products," Ms Choo said.
iSTOX is among a few Singapore-based platforms dealing in private market securities, a fast-growing segment for investors. Last year, it announced plans to expand into China.
Most platforms cater to high net-worth individuals and institutional investors who are usually keen to put money into more risky but often higher yielding assets such as hedge funds, private equity and venture capital.
In December, DBS Group, South-east Asia's biggest bank, said it was setting up an exchange for digital assets, including cryptocurrencies.