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Fintech start-up ADDX offers individual investors access to pre-IPO deals, private equity via security tokens
- Singapore-based start-up has recently offered a tech fund managed by Fullerton, a subsidiary of Temasek
- The blockchain-enabled offering lowers the minimum investment from US$1 million to US$10,000, broadening access to the US$8 trillion private market.
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ADDX, a fintech platform backed by a unit of Temasek and Singapore Exchange, said blockchain technology is helping individual investors place bets on potential unicorns by making it possible to own a piece of fast-growing companies for well less than the cost of a basic Tesla.
Volatility in the global equity market means that more companies are opting to stay private for longer, as the world’s top IPO venues, including Hong Kong and Nasdaq, have been going through a rough patch. Funds raised via IPOs plunged by 90 per cent year-to-date in both markets, according to Refinitiv data.
This has sent individual investors further afield in pursuit of yields, into the vast US$8 trillion private market. This domain has traditionally attracted money from institutional players such as sovereign wealth, pension and endowment funds, according to Oi-yee Choo, chief executive of the Singapore-based start-up.
“Traditionally, private banks would require a minimum of US$1 million from an individual client if they want to get into a hedge fund or private-equity fund,” Choo said. “But with blockchain, our platform can now get allocations on their behalf, and break it down and distribute it online across multiple clients.”
Blockchain, she said, has made the ownership of pre-IPO unicorns and bonds more affordable. The technology slices these chunky assets down to US$10,000 to US$20,000 – less than a Tesla Model 3, which starts around US$45,000 – in the form of security tokens that can be traded, recorded and settled on a blockchain ledger.
This month, ADDX has listed a fund-of-fund product managed by Fullerton Fund Management, a subsidiary of Temasek, as one of 20 tokenised and tradeable funds available on its platform.
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