Global private market exchange ADDX has raised approximately USD 20 million in fresh capital from new and existing shareholders. KB Securities, a subsidiary of Korea’s largest banking group KB Financial Group (KBFG), led this latest investment, which was part of an upsized Pre-Series B round. The round kicked off in May 2022, when ADDX announced a US$58 million fundraise involving new shareholders Stock Exchange of Thailand (SET), Hamilton Lane and UOB.
The newest equity round brings total funds raised by ADDX since its 2017 inception to around US$140 million. Part of the newly raised capital will go towards growing ADDX Advantage, the company’s wealth management platform launched earlier this year for private banks, brokerages and family offices. The investment will also be used to fund the firm’s global expansion, which includes plans to enter more markets both by working with partners and by obtaining new licenses. ADDX is currently regulated by the Monetary Authority of Singapore.
ADDX was founded to make investing fairer by giving individual investors greater access to private market deals that have traditionally been open only to institutional investors such as sovereign wealth funds and endowment funds. These include private credit and other fixed income investments, private equity, hedge funds and private real estate.
Using blockchain and smart contract technology, the exchange is able to automate manual processes and thereby bring minimum subscription sizes down from USD1 million to $5,000 while allowing secondary trading. ADDX has built a fully digital infrastructure for its regulated platform, with 60% of investment subscriptions now happening via its mobile app. In 2022 so far, ADDX has grown the base of investors it serves by around 80%, year-on-year.
KB Securities joins more than a dozen financial institutions that have become shareholders of ADDX. These include Singapore Exchange (SGX), Stock Exchange of Thailand (SET), Hamilton Lane, Temasek subsidiary Heliconia Capital, UOB, Tokai Tokyo Financial Holdings, the Development Bank of Japan (DBJ), Kiatnakin Phatra Financial Group, Krungsri Bank and Hanwha Asset Management. KB Securities and ADDX will explore possible tie-ups to expand private market services in Asia, including potential collaborations in Singapore or Korea.
KB Financial Group is Korea’s leading financial services provider. Among the group’s 13 subsidiaries are KB Kookmin Bank, Korea’s largest commercial bank, as well as KB Securities. In 2021, the group employed more than 25,000 staff and served 36.3 million customers. It earned a net profit of KRW 4.4 billion, on a gross operating income of KRW 14.5 billion and assets under management of KRW 1,121 trillion.
Oi-Yee Choo, CEO of ADDX, said: “ADDX has become the focal point for Asian financial institutions that believe in building a new technology-driven infrastructure for private markets, to overcome inefficiencies in the traditional model. In these volatile times, with many investors waiting by the sidelines for more stability in the financial markets, our ability to raise capital demonstrates the momentum behind ADDX and its mission. Shareholders of ADDX are industry insiders with a keen understanding of the transformative, long-term value of this project that transcends near-term cyclical forces. ADDX has a clear lead among private market platforms in Asia – we have the technology, legal, regulatory and financial knowhow, as well as the strongest set of partners. KB Securities, which belongs to Korea’s biggest banking group, has now backed us – a truly exciting development, filled with potential and opportunity. Our clients will benefit from the innovation and dynamism one can expect when ADDX and KB Securities work hand in glove. We will grow together. We will be a collective force for good in Asia’s capital markets.”
She added: “The fundamental design of private markets – how and to whom securities are distributed, and whether secondary trading is facilitated – has transformed more over the past two years than it has over the two decades before that. The impact of that change has been positive: access to the means of wealth creation is becoming more equal, and capital can flow unimpeded to the most efficient financing projects. In the long run, smooth and seamless capital markets will provide an uplift to growth in the real economy, with dividends for both workers and investors.”
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