iSTOX, a digital securities platform aiming to make the private capital markets more accessible, just closed its $50 million Series A funding round after attracting two government-backed investors in Japan.
The new investors are JIC Venture Growth Investments, the venture capital arm of Japan Investment Corporation, and the Japanese government-owned Development Bank of Japan.
Japan’s Juroku Bank and Mobile Internet Capital, a venture capital firm, have also invested in iSTOX.
Existing investors include Singapore Exchange, Japan’s Tokai Tokyo Financial Holdings, South Korea’s Hanwha Asset Management, Temasek Holdings subsidiary Heliconia Capital Management and Thailand’s Kiatnakin Phatra Financial Group.
Founded in 2017, iSTOX allows multi-asset issuances of fractionalised private market securities, including equity, bonds and funds, making them accessible to a larger pool of investors outside of institutions or private banking clients.
It creates security tokens using blockchain and smart contract technology, automating manual processes that traditionally restrict issuers from handling large numbers of smaller investors. As a result, iSTOX can reduce minimum investment ticket sizes to $20,000 or less.
iSTOX’s proprietary exchange also allows the secondary buying and selling of securities among investors, enhancing the liquidity and value of those investments.
Hideki Yarimizu, chief executive officer of JIC Venture Growth Investments, believes iSTOX represents “the launch of the next generation of digital financial services and platforms covering Asia” that will “also contribute to the development of Japanese financial services”.
After obtaining a full Monetary Authority of Singapore licence in February last year, iSTOX signed a memorandum of understanding with Chongqing Monetary Authority to set up a digital securities exchange in Chongqing to serve the Chinese market, marking its first overseas expansion.
Oi Yee Choo, chief commercial officer of iSTOX, says plans are in place to expand its geographical footprint and investment offerings as the digital securities space grows “by leaps and bounds in 2021”.