–Provable Markets, a New York and Amsterdam based provider of front, middle, and back-office technology solutions for Securities Finance, announced the completion of its Series A investment round led by Dialectic Capital Management, with participation and support of current investors Inkef Capital and Anthemis.
“Securities Lending is a uniquely complex, and vital component of the broader Securities Financing markets that underpin the global financial system,” said Matt Cohen Co-Founder and CEO of Provable Markets. “In many ways, it is the first of the traditional capital markets ecosystems that rely on T-0, real-time settlement. Our platform is designed to work both independently and within the confines of the existing infrastructure to more flexibly support this dynamic execution and post-trade relationship.”
Provable emphasizes a strong focus on market structure, leveraging subject matter expertise on its team from the evolution of electronic trading in equities. The platform is uniquely positioned with direct venue to settlement connectivity enhanced by the securities lending markets’ first open source API library and ability to route orders to all participant types. Customers can seamlessly transact in cleared and non-cleared Securities Lending transactions with real-time lifecycle management and settlement messaging to the Depository Trust Company (“DTC”) that is managed as ongoing open interest via its SEC Registered Alternative Trading System (“ATS”). “As a result, trade breaks, monthly billing, T+1 reconciliation, and costly overhead of managing a securities lending business are a thing of the past,” adds Cohen.
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With Basel End Game looming, offering a cleared settlement option allows participants to benefit from significantly reduced Risk Weighted Assets (“RWAs”) and balance sheet netting, along with an across the board reduction in both hard and soft operational costs. By freeing up both operational and working capital, Provable is eager to help clients more strategically focus on workflow enhancements and automation available through the platform, including Provable’s novel central order book architecture.
The funds raised allow Provable to build on the foundational pieces put in place over the past few years and scale the product offering and network. Longer term, Provable seeks to apply similar solutions under its existing FINRA and SEC registrations for Options and Swaps, along with other adjacent trade and post-trade heavy markets.
John Fichthorn, Founder of Dialectic Capital Management commented, “We look forward to supporting Matt and his team in their efforts to transform the way this crucial part of Wall Street infrastructure operates. Their end to end solution is obviously designed by industry experts and is going to be the foundation for a total transformation in the way stock loan and securities finance operates in the future.”
Fichthorn will join the Board of Directors, which has also added industry pioneers Steve Greenblatt and Derek Penn as independent Directors over the past year.
Corné Jansen, Venture Partner at Inkef Capital, an investor since the company’s initial Seed round said: “The team at Provable has been working hard to build a robust and modern infrastructure in a part of the financial markets where participants still had to deal with legacy systems and as a result, inefficiencies and a lack of interoperability and integrations. This round is a testament to that work and allows the company to double down on onboarding customers and expanding its product offering.”
Harry Harrison, Executive Chair of Anthemis Asset Management, also with Provable since Seed stage, added, “Provable Markets is modernizing long-outdated securities lending infrastructure. Since our initial investment, we’ve seen their vision drive efficiencies and unlock opportunities in this vital market. We’re thrilled to continue to support the team and watch the firm scale for greater growth.”
Cohen concluded, “We are very grateful for the support of our investors, customers, and partners that have helped us achieve this milestone, and are ready to shift our focus on the next phase of execution and growth for our long term goal of building an enduring market utility.”
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