Axiology, a DLT securities trading and settlement infrastructure has secured a €2 million investment round.
A spin-off of the SUPER HOW? technology lab, Axiology is an alternative capital market infrastructure that allows for more efficient capital market transactions by providing a robust trading and settlement system using DLT.
A former Bank of Lithuania board member, Dr Marius Jurgilas, leads the startup.
He observed that high costs in financial operations hinder companies from borrowing and impose heavy costs on small investors.
In response, Axiology uses innovative technology to harness new EU regulations, aiming to reduce costs associated with issuance, trading, settlement, and reporting, thus enhancing the EU capital market for businesses and individual investors.
The infrastructure will function under the EU Distributed Ledger Technology (DLT) Pilot Regime, allowing regulated financial market participants to use DLT to issue, trade, and settle tokenised financial instruments. It exempts new DLT-based financial infrastructures from the current securities regulation and aims to improve the functionality of the EU's economic market.
Axiology's initial use case involves tokenising government bonds to make these instruments easily and more efficiently available to European retail investors.
The primary users of the solution will be financial institutions and their retail investors searching for better investment opportunities and business enterprises looking for more accessible funds.
Dr. Jurgilas explained:
"Axiology can be used for various purposes, and one can be direct financing by regular citizens for any cause they care about.
For example, one of the first use cases we are considering relates to Lithuania's defence needs. Our infrastructure would allow citizens to make direct financial contributions towards the safety of our country. This would be an alternative to higher taxes or increasing our country's foreign debt. In principle, it can facilitate any ESG financial initiative."
Under the new regime, individuals can now trade tokenised securities directly with each other. However, Aiology believes specialised brokers are better suited to handle client-facing aspects.
Dr Jurgilas detailed:
"Their value proposition lies in their ability to enhance securities offerings and trading terms for their clients, which could potentially increase liquidity in the secondary market, especially for retail investors trading in smaller transaction sizes."
The round is co-led by Baltic Sandbox Ventures and Coinvest Capital, acting in a group with accredited business angels and angel syndicates.
Viktorija Trimbel, Managing Director of Coinvest Capital shared:
"We've been impressed by the calibre of the founding team, their expertise in the financial markets and their ability to explain very complicated challenges and solutions.
The ambition of Axiology founders to enable safe, efficient and affordable access to the capital markets, matching companies and investors, makes an excellent fit with the Fund's mandate to foster the development of the financing ecosystem and fill the market gaps."
"Innovation fuels the future of finance. Tokenised securities are a key part of that future, both in the public and private markets.
There are significant technical, product, and business challenges to building toward that future, which is also why it is a compelling opportunity for the right team to tackle it.
Axiology has the ability, drive, and vision to lead this change, making finance more equitable, efficient, and transparent." says Sandra Golbreich, General Partner at Baltic Sandbox Ventures.
Axiology plans to apply for the DLT Transaction Settlement System (DLT-TSS) operator license, which will lay the groundwork for the infrastructure to operate within the regulated framework of the financial industry.
It aims to commence regulated activities in the second half of 2024 and is working on strategic partnerships to bolster its position further and accelerate its growth trajectory.
Lead image: The Axiology team from left to right: Andrius Bartminas, Dr. Marius Jurgilas, Andrius Mamontovas, Andrius Kosuba. Photo: uncredited.