Private markets on the way to the public stock exchange
The virtual marketplace Finexity, which specialises in private market investments, wants to work more closely with the savings bank sector. The company, which was founded in 2018 and has already cooperated with Sparkasse Bremen, wants to enable investors to make private market investments with a small amount of capital, says CEO Paul Huelsmann in an interview with Börsen-Zeitung. The start-up company initially focused on the property sector, because the asset class is easy to understand and large in volume.
The Hamburg-based company is open to growth through acquisitions, and according to Huelsmann there will be no shortage of opportunities: „In the next 24 to 36 months, there will be a lot of targets for sale because our market will consolidate," he predicts, citing the digital upheaval, regulatory requirements, and geopolitics, as reasons. „We want to organise the acquisitions in the most liquidity-friendly way possible, i.e. the shareholders of the companies to be acquired should receive Finexity shares,“ says Huelsmann.
M&A expert brought on board
This is why the start-up has brought a proven M&A expert on board, in the form of its new CFO, Zhengyu Sindra Hu. The company is currently exploring whether a listing could facilitate such transactions: „We are currently talking to various stock exchanges to find the best constellation for us," Huelsmann explains.
Finexity wants to establish a kind of Nasdaq for private market investments. The company is currently in the process of applying for a BaFin licence. Scalable products are to be traded on the regulated marketplace, such as tokenised funds, and thematic ETFs for commodities and real estate. The basis for this is the DLT pilot regime, which creates EU-wide regulated conditions for the operation of distributed ledger technology market infrastructure, and enables the trading and settlement of DLT-based securities.
61 Shareholders
Users of the marketplace invest an average of EUR 10,000 net per year, i.e. the balance of purchases and sales. „The average European retail customer has a share portfolio worth 60,000 euros. We believe that a customer will have roughly the same volume of private markets investments in the long term,“ says Huelsmann, in a bold forecast.
The start-up, which is majority-owned by its founders, raised 790,000 euros in its first financing round in 2020. Since then, over 11 million euros in equity and debt capital have been invested in the holding company. Except for the founders, the 61 shareholders each hold between 0.5% and 10% of the shares.
