UK-based Sharegain has raised $12 million, over two funding rounds, to bring securities lending to private banks, online brokers, robo-advisors and asset management firms.
Venture Capital firms Blumberg Capital, Target Global, Maverick Ventures Israel, Rhodium and private investors from the financial industry participated in the rounds, the second of which closed recently, raising $5 million.
Securities lending is a $2.5 trillion market but has traditionally been confined to a small number of large institutional investors, who loan out their stocks, bonds and ETFs in return for a payment known as ‘lending revenue’.
With FCA approval in hand, Sharegain is looking to open the practice to a wider market, vowing to create a more transparent and effective market that’s open to any investor, binging greater liquidity and better data.
Founded in 2015, the startup says that it already has an undisclosed group of lenders using the platform and that it is also working with the big banks to drive best practice.
Boaz Yaari, CEO, Sharegain, says: "The old way of securities lending was complex, opaque and outdated, in a ‘need to know’ system that few understood and even fewer controlled. Now, for the first time, it is effortless, effective and open to any investor."