A Glasgow-based ‘public market for private companies’ has rebranded from CrowdX to InfinitX.
The startup, a star of our FinTech 50 ranking last year, offers established companies a route for raising fresh capital but also delivers a forum for matching up investors who want to buy and sell shares in its members’ companies.
To participate, they must adhere to a similar reporting and transparency framework as would be used by a listed company, something that provides important valuation metrics for members and assures investors they are comparing companies on a like-for-like basis.
InfinitX said the name change reflects the wider ambitions of the FinTech challenger amid demand for its technology from leading financial institutions across the globe.
In January it swooped for London’s oldest private equity market, J P Jenkins, while it claims to be in advanced negotiations with a number of established fund management companies who are looking to deliver their own automated exchange venues.
“When CrowdX was first conceived, it’s fair to say that the team hadn’t fully acknowledged the scale of demand which would be seen from the institutional audience,” said CEO Mike McCudden.
“We knew that founders and early stage investors wanted a mechanism for crystalising their wealth, but the rampant growth of the unlisted asset market in recent years – something that has been turbocharged by low interest rates – meant that many wealth and fund managers were left looking for a way to sell down parts of their portfolios, too.
“The J P Jenkins acquisition has enabled us to showcase the InfinitX technology in a real world environment, but this will just be the first of many deployments. Our approach will ensure we can cater to the growing demand for liquidity in unlisted equities, whether that comes from investors or institutions.”
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The InfinitX approach allows issuers to tailor market rules in a way that meets their needs, with transactions then settled over the already-established market infrastructure.
Any authorised institution can request access to the marketplaces, via a standard API connection, thereby removing the need for manual or voice based trading which dominates much of the unlisted investment space.
McCudden concluded: “The reality is that the volume of unlisted equity investments continues to grow globally – and at a rapid pace.
“Asset owners are increasingly looking for better ways of putting valuations on, and exiting from, these investments. Equally, investors are keen to find efficient ways of evaluating the opportunities available to them and incorporating these into their existing portfolios.
“The technology we have developed with InfinitX provides a significant enhancement to the existing market structures and we see quite literally an infinite number of possibilities for the business.”