The Luxembourg-based startup secures equity-based financing with BNY Mellon, Goldman Sachs, BNP Paribas Citigroup, and Deutsche Börse.
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HQLAᵡ, a startup that developed a digital platform that manages the security lending and collateral processes of finance institutions has announced a 14.4m Series B funding.
The funders are BNY Mellon, Goldman Sachs, BNP Paribas Securities Services, Citigroup and existing shareholder – Deutsche Börse.
A Series B funding round is financing where investors provide capital to a company in exchange for preferred shares. Holders of preferred shares will receive dividend payments before other common shareholders.
Series B fundings are dedicated to companies that are in their development stage, generate stable revenues, and whose valuation exceeds 10 million euros.
The €14.4m funding will be used to develop HQLAᵡ’s digital collateral registry platform and to extend it to new market participants, including tri-party agents, custodians, and other market participants.
Tackling Collateral Challenges
The new investors will become shareholders of the fintech. They will also connect as clients to its collateral management platform.
Collateral is an asset that a borrower uses as a security, and which acts as a form of protection for the lender. In case of the borrower defaulting on their payment, the lender can seize the collateral and sell it to reimburse their losses.
Some finance operations require the use of collateral, a practice that has been subject to increased regulation and has become costly for finance institutions.
HQLAᵡ digital collateral registry platform helps reduce the operating costs and liquidity requirements of their collateral transfer and management.
Founded in 2017, the fintech operates from Luxembourg and employs 13 people.