Hay: Nivaura could have significant effect on the broader capital markets ecosystem
City giant Linklaters and US firm Orrick have joined Allen & Overy by investing in tech company Nivaura, a cloud-based service for the issue and administration of financial instruments.
Nivaura was the first member of Allen & Overy’s tech incubator Fuse back in September 2017, and has raised $20m (£15m) in seed and seed extension capital in its latest funding round.
The investment was led by London Stock Exchange Group and also included Santander InnoVentures, Transamerica Ventures, MiddleGame Ventures, Digital Currency Group and Spencer Lake, formerly head of global markets at HSBC.
Nivaura deploys digital investment banking platforms for banks, exchanges and other financial institutions, to connect and automate fragmented and manual processes involved in the issuance and administration of instruments such as any form of bonds, loans, equity, and structured products.
It says that, for certain transaction types, this can reduce time to market by as much as 60-80%, cutting costs significantly and ensuring consistent compliance.
It said it would use the money to rapidly expand its leadership, business development and technical teams, including Richard Cohen, a senior debt capital markets lawyer who is moving from Allen & Overy to become Nivaura’s general counsel and head of strategy.
Mr Lake and Nikhil Rathi, CEO of London Stock Exchange plc, are joining the board.
Nivaura said it has already “successfully proven” the platform for structuring, distributing, executing and settling financial instruments both traditionally – by enabling settlement through existing clearing infrastructure – and as tokenised instruments that are registered and settled on public blockchains.
This included the world’s first automated cryptocurrency denominated bond issue, in conjunction with Allen & Overy.
Nivaura’s CEO, Dr Avtar Sehra, said: “Our focus for 2019 is on conducting a series of high-profile, large-scale projects with high-calibre partners to demonstrate our platform as a valuable solution across the full spectrum of capital markets primary issuance activities.
He added that the involvement of the law firms showed how Nivaura has made regulatory and legal rigour “core to the platform”.
Richard Hay, UK head of fintech at Linklaters, said: “It is key for current fintech outfits to be able to point to clear benefits of deployment. Levels of hype are receding, and potential users are starting to show signs of ‘innovation fatigue’ and healthy scepticism.
“Successful offerings provide customers an immediate benefit, such as cost-reduction, but also a way of future-proofing business lines.
“For that reason, we see Nivaura’s platform as having a potentially significant effect on the broader capital markets ecosystem. That includes law firms, as their platform places legal documentation at the centre of the drive towards automation.”
Meanwhile, Slaughter and May has launched a legal tech incubator, called Collaborate. It includes a client advisory panel, consisting of representatives from the in-house legal teams at GlaxoSmithKline, John Lewis Partnership, Santander, Standard Chartered and Vodafone.
The Collaborate programme will select around six legal tech businesses, which will have access to the firm’s lawyers for product testing and feedback, its information security team, a sandbox environment, dummy data for the cohort to use in testing their products, and collaboration spaces.
Each cohort member will also be given two dedicated Slaughter and May mentors – a member of the firm’s knowledge or innovation teams and a practising lawyer from a relevant practice area.
There is also an industry expert panel, whose members includes Dr Anna Donovan, Vice-Dean (Innovation) for the Faculty of Laws at UCL, Catherine Bamford, founder of legal engineers BamLegal, and strategic adviser Andrew Burgess.
Slaughter and May partner Nilufer von Bismarck said: “Many of our clients are innovating and using technology to transform how they operate as businesses, including in their legal operations, and it is key that we are alongside them in that journey.
“Our programme will provide a forum for us and our clients to work with legal tech developers and entrepreneurs to foster dialogue, progress, and opportunities to collaborate.”
Last month, Slaughter and May increased its investment in Luminance as legal AI company raised a further $10m to support its growth, valuing the company at $100m.
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