Singapore Exchange-backed security token platform iSTOX raised an undisclosed amount of Series A funding from one of the largest Thai investment banks, Kiatnakin Phatra Financial Group (KKP).
While declining to reveal financial terms of the deal, the firm said KKP is the only investor in the latest funding round.
Proceeds from the raise will be used to grow the user base of qualified investors, issue tokens with a range of securities such as stocks, bonds and structured products, and expand in Asia.
The platform is owned by ICHX Tech, a fintech infrastructure company with blockchain and smart contract technology, that was funded by Singapore Exchange (SGX) and Heliconia Capital Management, a subsidiary of the state-owned investment behemoth Temasek Holdings.
In May, iSTOX was admitted into a fintech regulatory sandbox set up by the Monetary Authority of Singapore (MAS), the Singaporean central bank. Chew Sutat, EVP of SGX, and Chua Kim Leng, former special advisor of MAS have been appointed as the board members of ICHX Tech.
iSTOX has been onboarding its first batch of issuers and investors to launch the digitized securities trading from the fourth quarter of this year, according to a post from the platform.
“The digitization of securities will certainly be critical in reintermediating the value chain and offering solutions not yet available in conventional capital markets,” chief executive officer Aphinant Klewpatinond said in a statement.
iSTOX can open a door to the private capital markets that is otherwise unavailable for the vast majority of investors, chief strategy officer Darius Liu told CoinDesk.
“Many investors these days are not getting the returns they want from the major public financial markets and are very interested in private market opportunities such as equity in series B start-ups, corporate debt, and hedge funds,” Liu explained.
The market for such securities is “extremely fragmented and opaque” requiring high transaction fees from the middlemen and long settlement times, Liu said, noting only ultra-high net worth individuals and the very well-connected can effectively compete.
The firm touts that the new platform ensures all users have equal access and information about opportunities, eliminates many of the high costs, and effectively opens private investment to accredited and institutional investors.
“By offering issuance, custody, and secondary market trading on one platform, iSTOX provides a one-stop shop for investors,” Liu said. “This is important because if you lack any one of these, it costs you time and adds cost and complexity.”
iSTOX has hired three law firms to advise issuers on the structure and issuance process for such securities, including Allen & Gledhill LLP, Baker McKenzie Wong & Leow and Rajah & Tann.
Singapore image via Shutterstock