Digital securities platform iSTOX raises US$50m in Series A round

SINGAPORE Exchange (SGX)-backed digital securities platform iSTOX has raised US$50 million in Series A funding, with new Japanese government-backed investors added to its list of backers.

The new investors include the venture capital arm of Japan's state-backed fund Japan Investment Corporation (JIC), as well as the Development Bank of Japan, a financial institution owned by the Japanese government, the fintech firm said on Thursday. Japanese commercial bank Juroku Bank and venture capital firm Mobile Internet Capital joined as new investors too.

Meanwhile, existing backers including SGX, Japan's Tokai Tokyo Financial Holdings and Korea's Hanwha Asset Management made fresh investments, iSTOX said.

Started in 2017, the regulated platform iSTOX aims to allow accredited investors easier access to private markets and alternative assets, such as private equity and hedge funds.

On this platform, more sophisticated investors can buy - and trade - a fraction of an unregistered business trust invested in properties, or buy a fraction of a hedge fund, among other assets.

Fractions of such investments are held as digitised securities, named as such because the ownership and transaction involving such investments are recorded on a blockchain, and stored as digital tokens.

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iSTOX's chief commercial officer Choo Oi Yee said the firm plans to expand investment offerings with the new funds, such as by rolling out blue-chip issuers that individual investors can subscribe to in bite-size portions via their platform.

It also plans to expand its geographical footprint and already has in its pipeline issuance deals involving other regions, such as Europe and Australia.

Ms Choo said: "Capital markets are transforming rapidly because of advancements in technology. The regulator MAS and our institutional investors have been far-sighted and progressive, and they support the change wholeheartedly."

Hideki Yarimizu, chief executive of JIC's Venture Growth Investments, said: "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."

Other existing investors of iSTOX include Temasek Holdings subsidiary Heliconia Capital Management and Thailand's Kiatnakin Phatra Financial Group.