KB Securities, Subsidiary of Korea’s Largest Banking Group, Takes Stake in ADDX as Part of US$20 Million Raise to Pre-Series B
Global Private Market Exchange ADDX raised approximately US$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 expanded pre-Series B round. The round kicked off in May 2022, when the ADDX announced a US$58 million fundraising involving new shareholders Stock Exchange of Thailand (SET), Hamilton Lane and UOB.
The latest funding round brings the total funds raised by ADDX since its inception in 2017 to approximately US$140 million. A portion 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 company’s global expansion, which includes plans to enter more markets both by working with partners and securing new licenses. The 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 transactions that were traditionally only open to institutional investors such as sovereign wealth funds and endowments. 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 reduce the minimum subscription size from $1 million to $5,000 while enabling secondary trading. ADDX has built a fully digital infrastructure for its regulated platform, with 60% of investment subscriptions now taking place through its mobile app. In 2022 so far, ADDX has grown the investor base it serves by approximately 80%, year-over-year.
KB Securities joins more than a dozen financial institutions that have become shareholders of ADDX. These include the Singapore Stock Exchange (SGX), the Stock Exchange of Thailand (SET), Hamilton Lane, Temasek subsidiary Heliconia Capital, UOB, Tokai Tokyo Financial Holdings, Bank of Development of Japan (DBJ), Kiatnakin Phatra Financial Group, Krungsri Bank and Hanwha Asset. Management. KB Securities and ADDX will explore combination opportunities to expand private market services in Asia, including potential collaborations in Singapore or Korea.
KB Financial Group (KRX: 105560, NYSE: KB) 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 people and served 36.3 million customers. It made a net profit of KRW 4.4 billion, on 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 who believe in building a new technology-driven infrastructure for private markets to overcome the inefficiencies of the traditional model. In these volatile times, when many investors wait aside greater financial market stability, our ability to raise capital demonstrates the momentum behind ADDX and its mission.ADDX shareholders are industry insiders who fully understand the long-term transformative value of this project that transcends short-term cyclical forces.ADDX has a clear lead among private market platforms in Asia – we have the technology, legal, regulatory and financial know-how, as well as the strongest set of partners. KB Securities, part of Korea’s largest banking group, has now backed us – a truly exciting development, full of potential. el and opportunities. Our clients will benefit from the innovation and dynamism that can be expected when ADDX and KB Securities work hand in hand. We will grow together. We will be a collective force for good in Asian 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 in the past two years than it has in the previous two decades. The impact of this change has been positive: access to the means of wealth creation becomes more equitable and capital can flow freely to the most efficient financing projects.In the long term, fluid and homogeneous capital markets will stimulate the growth of the real economy, with dividends for workers and investors.