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The London Stock Exchange Group (LSEG) has invested in a crypto start-up. Nivaura provides a platform that enables companies to issue and settle debts on the blockchain.
Nivaura was behind the world's first issuance of a cryptocurrency-denominated bond, back in November 2017. The company claims that its blockchain platform can reduce the time between issuing a financial instrument and its reaching the market by 80 percent, cutting the costs for raising capital in a way that could benefit many smaller firms. Using figures taken since April 2018, Nivaura has generated annual revenue of around $1 million and has ten active commercial deals, as reported by Forbes.
According to Nivaura CEO Avtar Sehra, "this complex and paid chain of custody...can be eliminated using a blockchain...also the cost of custody potentially goes down for the investors as well...At the moment, if I settle and hold securities to a traditional chain of custody, I'm going to pay a basis-point fee...if I'm holding $10 billion I might be paying like .5 basis points. However, in the blockchain world...I think it's going go down to a volume-based fee rather than value-based."
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LSEG led the seed funding round for Nivaura, which raised a total of $20 million. Other investors included Santander's VC arm and blockchain-focused investment firm Digital Currency Group (DCG), amongst others.
DCG and its CEO Barry Silbert have been leading the way in terms of institutional investment in the crypto space over recent years. Silbert has recently criticized other VCs for their reluctance to invest, as well as making bearish predictions about most of the crypto market.
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