Digital Debt Capital Markets Ltd (“DDCM”), a UK based techfin company, providing technology to enhance, upgrade and improve communication and processes from a bond’s issuance to repayment at its term announces the closing of its follow-on seed round, raising £4.32mm from a group of individuals and family offices. Strongly supported by the original investor group following on, this second fund raising has attracted significant new and related investors – including IPGL Ltd (Lord Spencer’s private investment group) who led this round of financing and David E. Rutter Founder & CEO of R3, which develops Corda Enterprise, the blockchain software integral to the functioning of the agoraPlatform.
The company successfully closed its initial seed funding round in September 2019 raising £2.5mm and since then has been collaborating with major bond market participants including issuers, lead managers, lawyers and multiple service providers including custodians, central securities depositories (CSDs & ICSDs), issuing and paying agents (IPAs) to develop its software to connect them and reconcile data throughout the full life cycle of a bond. The company has successfully completed the initial development and in-house testing of its first phase software.
DDCM is now completing the rigorous technology onboarding required to work with these critical institutions and conducting beta testing with several bond market participants that has already generated some excellent initial results.
The new funding will be used to develop the business by hiring critical staff for marketing, user support and further software development.
Charlie Berman, DDCM’s Co-Founder and Chief Executive Officer said,
“DDCM is delighted to have closed its second fund raise, and we are very grateful for the continuing support, encouragement and confidence of our initial shareholders. We warmly welcome our new shareholders – all of whom have either highly distinguished careers in financial services or outstanding track records in building significant businesses and creating substantial shareholder value.
We are also grateful for the collaboration of important bond market participants who have collectively performed miracles during the pandemic – ensuring the capital markets have remained vibrant and able to mobilise record volumes of capital for governments and industry. Their continued commitment to innovation and digitalisation of their businesses has enabled us to complete our initial development during the COVID-19 crisis. Their willingness to commit valuable time and resources during this most challenging period has been invaluable. We all share the common goal of continuing to improve the functioning of the bond markets for the benefit of all its participants. In a similar fashion to other industries, this crisis has only accelerated the desire and will of market participants across the bond lifecycle to develop and adopt new technologies to drive down costs, yield productivity gains and create ever more resilient and robust systems and processes.”
Lord Spencer said,
“The market dislocation caused by the Covid-19 crisis has confirmed the value of DDCM in addressing the long-standing structural issues in the bond markets and the enormous role that technology can play to support all market professionals. The early feedback and results from the company’s latest testing with important bond market participants Is hugely encouraging. I backed DDCM as a start-up and I’m now delighted to increase my investment through IPGL, since I believe this team is going to deliver. Their approach has the potential to significantly advance efficiency and improve returns for participants in a market measured in US$ tens of trillions.”
David Rutter said,
“I am delighted to join DDCM as a shareholder. The whole reason we founded R3 and developed Corda from the ground up was to provide a scalable, robust and regulatorily compliant platform fit for the exacting standards of complex global business, including the financial services industry. The agoraPlatform is one of the most exciting new applications being developed and will benefit all the existing stakeholders in bond markets. DDCM has a very experienced management team who not only understand the issues facing the market, but how new technologies can be developed to deliver better products and services.”
Notes to editors
Digital Debt Capital Markets agoraPlatform
DDCM is developing software to enable, for the first time, truly end-to-end digital support for the entire life cycle of a bond through the deployment of its agoraSoftware. This technology will enhance, upgrade and improve communication and processes from a bond’s issuance to repayment at its term. The agora software will be used by issuers, arrangers and multiple service providers to the international bond markets, from the pre-mandate stage, during execution, pricing and primary settlement and throughout the secondary life of the security until its final redemption.
Today, communication of critical information for a bond involves the use of multiple channels including voice, the emailing of Word documents, PDFs, Excel spreadsheets and chat rooms. Many of the existing key processes have not fundamentally changed for several decades. The transmission of information in these ways creates numerous points where participants manually input the same data, creating different siloed versions of the same material, which require subsequent and repeated reconciliation. The agoraSoftware will connect bond market participants providing a single version of critical information for each bond capable of being used digitally by all participants for their respective processes avoiding the need for manual input and duplication. This is achieved through the application of the latest digital technologies within the agoraSoftware which streamline and standardise information flow to provide far more efficient, confidential and secure management of the communications between bond market participants.
As the agoraSoftware evolves, it will usher in an era of smart digital securities that will be able to perform and regulate many of their own functions, leading to the next step in the evolution of the bond. DDCM will introduce better products and enhanced market efficiency for all bond market participants and the promise of higher levels of straight through processing for downstream service providers.
It will further provide regulatory-transparent and immutable records. These will be able to meet the current and future requirements of the post global financial crisis regulatory framework in both the pre and post trade environment.
The business was co-founded by bond market veterans Charlie Berman and Naveed Nasar. Charlie has been originating and executing bond issues since the 1980s. He was most recently the Chairman of Debt Capital Markets at Barclays having previously held senior roles in fixed income at Salomon Bros and Citigroup and has close and long-standing relationships with many of the world’s most prolific bond issuers. Naveed worked at JP Morgan, Bank of America Merrill Lynch and HSBC in both origination and back office functions. Other co-founders include nearly 25 year Slaughter & May Partner, Dermot Rice; former head of development at Marketpipe and CTO of Europe at Ipreo, Tony Cleverley; and former M&A banker and tech investor, Yassamin Issapour. Together they have deep expertise on the full life cycle of a bond’s journey from inception to redemption, and represent markets, legal/regulatory and technology knowledge.