The new Liquity platform, tantalisingly close in spelling to the liquidity that it offers privately owned firms from investors, launched this week in London at the Level39 technology hub situated at London’s Canary Wharf.
The new private equity marketplace seeks to bring together company chief executives, angel investors, venture capitalists and other finance professionals in order to facilitate transactions between qualified investors, shareholders, and the boards of UK private companies, matching individuals and institutions who respectively want to raise money or invest in high growth companies. The online technology platform claims to have all necessary legal processes and certitude built-in to its transactional procedures.
The new launch is unlikely to be of interest to large multinational corporations (MNCs) or treasuries at this stage, excepting those looking for high-growth, risky alternative investment opportunities in the present low-interest rate environment, but it a possible way for smaller firms and start-ups to raise money. It is also an interesting development illustrating how technology can potentially replace the face-to-face networking relationships of old.
The value of unquoted company equity in the UK is over £300bn, and the UK is home to thousands of established and profitable private companies that could represent good investment opportunities. However, there are currently significant practical and legal challenges for all types of online investors to access these businesses – something which the Liquity platform is seeking to solve.
At the same time, it is also difficult for UK private company shareholders wishing to sell their stakes to quickly realise the value of their holdings; another driver for the new launch. In today’s environment, private companies and shareholders alike are suffering the consequences of a severe lack of liquidity within the private company equity space and the new marketplace believes it can address this need among smaller corporates.
Commenting on the launch, Barry Shrier, the founder and chief executive officer (CEO) of Liquity, said: “Private company ownership structures are highly complex, but increasing the liquidity of equity stakes is vital to the performance of UK private businesses, strengthening the shareholder base and stimulating further economic growth. Liquity aims to release £1bn cash into the British economy by matching buyers and sellers of private company equity with the proposition of a new and unique solution benefitting all sides of the equation.”
However, a London summit on the industry’s introduction of the technology cautions that testing and acceptance are still at an early stage and firms should proceed with caution.
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