London based Appital, an Equity Marketplace, Secures £2.5 Million from Frontline Ventures, Others

Appital, the equity capital marketplace, reveals that it has acquired £2.5 million in capital from Frontline Ventures and a number of “seasoned” capital markets angel investors to bring tech innovation and automation to the equity capital markets. This should help with improving efficiency.

The proceeds from the investment round will be channeled towards the development of Appital’s tech infrastructure, integration with financial institutions and tech vendors while enabling the expansion of their engineering team “to support the delivery of their go-to-market strategy.”

Appital’s goal is to bring innovation to equity capital markets, an area that’s largely “untouched” by automation, “plagued” by opaque legacy processes. A new trading platform that supports the discovery of latent liquidity, Appital provides the buy-side community the option to gain more exposure to “relevant” deal flow opportunities and interact with “like-minded” institutions in the liquidity formation process.

The funding round has been announced after Appital revealed that it would team up with Turquoise to bring “pioneering” book-building tech to the buy-side. The cooperation aims to bring together complementary capabilities “to the benefit of issuers and investors, adding transparency and automation to the process of liquidity discovery.”

Institutional investors may benefit from an innovative and efficient way “to access liquidity opportunities and trade in a market for size, at the best price.” At the same time, Appital users will be able “to execute all deals through the Turquoise MTF, via a single point of access and with seamless straight-through-processing (STP) to over 20 settlement venues,” the announcement noted.

Mark Badyra, CEO at Appital, stated:

“This is an exciting time for our business. We are delighted to have secured joint investment from Frontline Ventures and a number of angel investors to provide buy-side firms with new opportunities to discover and interact with latent liquidity. We enable buy-side firms to radically rethink their approach to interacting with the market, gain exposure to deal flow opportunities they have not been able to access before, and proactively drive liquidity in the market.”

Shay Garvey, Partner at Frontline Ventures, remarked:

“Appital offers a solution to one of the buy-side’s biggest pain points in equity capital markets: the lack of efficiency across existing bookbuilding and deal distribution processes. Their proven track record in gaining participation from major asset management firms is testament to the need for innovation in this segment of the market and we are delighted to support Appital’s vision.”

With Appital, institutional investors are able to “proactively” source liquidity, including in highly illiquid, small and mid-cap stocks.

The platform “pro-actively drives the book-building process, providing deal originators with opportunities to execute large volumes, often in excess of 5 days of ADV, with minimal market impact or risk of price erosion,” the announcement explained.

Although deal originators have real-time access to the complete life cycle of the book-building process, enabling them to “make distribution adjustments throughout,” deal participants “set their own preferences to ensure they are only exposed and alerted to relevant liquidity,” the release noted.

Richard Worrell, Head of EMEA Equity Trading at Janus Henderson Investors, Chairman of the Investment Association Buyside Trading Committee, added:

“Appital is an innovative company which has the potential to solve inefficiencies in accessing significant volume in less liquid securities. What’s more, the platform gives the buy-side greater control and transparency over their bookbuilding process.”

Greg Bennett, Chair of Appital and former Head of Capital Markets for EMEA & Americas for Fidelity International, said:

“During my career in Equity Capital Markets I have seen first hand that illiquidity is a systemic problem for the market, diminishing returns for investors as well as adversely impacting the cost of capital for issuers. Appital’s technology brings innovation for institutional investors and provides a significant step change in enhancing the execution of illiquid flow and ECM business across the market.”

At present, Appital is engaging with the “majority” of the leading asset management companies that collectively manage more than $30trn, many of which are “already participating in Appital’s Beta program,” the announcement revealed.

Appital’s tech infrastructure enables users “to integrate into existing OMS and EMS systems and workflows.”

The platform provides complete transparency and control over the book-building, allocation, and distribution process. End-to-end processes “are secure, fully automated and deliver the visibility and transparency necessary for internal compliance, external audit and regulatory reporting,” the announcement noted.

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