London Stock Exchange Leads $20 Million Fundraise for Blockchain Startup Nivaura

Capital markets blockchain startup Nivaura has raised a total of $20 million with the closing of its second seed extension round led by the London Stock Exchange Group.

Announced today, other investors in the latest round include Santander InnoVentures, the Spanish bank's VC arm; law firms Linklaters and Orrick; Transamerica Ventures, part of pensions and asset management giant Aegon; MiddleGame Ventures; Digital Currency Group; and Spencer Lake, formerly head of global markets at HSBC. Nivaura closed the original seed round in October 2017 and the first extension round in January 2018.

The proceeds will be used to increase headcount "Significantly across all areas" expand into the U.S. and Asia, and invest in further R&D, Nivaura said.

Nivaura is also beefing up its board, adding Nikhil Rathi, the CEO of the London Stock Exchange, and Lake, who is also joining as an advisor.

"The investment strengthens our existing relationship with Nivaura and underlines the Group's partnership approach in innovating to support our clients in accessing global investment pools," Rathi, who is also head of international development for the exchange's parent company LSEG, said in a press release.

The investment also represents a deepening of Nivaura's ties with LSEG. Previously, the exchange operator worked with Nivaura on the issuance of tokenized securities as part of the regulatory sandbox program of the U.K. Financial Conduct Authority.

Through this work, Nivaura has acquired expertise in arcane but important regulations such as the European Union's Markets in Financial Instruments Directive and the FCA Client Assets Sourcebook, which apply both to traditional market infrastructure as well as using tokenized instruments and blockchains.

Figuring out how tokenized securities can be traded in Europe under the Central Securities Depositories Regulation has meant Nivaura needed to also increase its legal firepower.

The work Nivaura has publicized so far with tokenized securities has all been done on public blockchains, first the bitcoin blockchain and then later using ethereum.

Currently, the business that's generating revenue for Nivaura is its workflow management and automation platform for primary capital markets, couched in traditional market infrastructure, noted Sehra.