Global legal services business, Linklaters, has this morning announced its first ever startup investment in fintech company Nivaura, as part of a $20m funding round that rival Allen & Overy (A&O) also participated in. US firm, Orrick, also invested as part of this new round, the startup’s fifth stage of funding so far.
Nivaura, has been part of A&O’s FUSE legal tech space, and in which A&O also invested last year, is ‘a regulated FinTech company focused on automating the issuance and administration processes for financial instruments’ said the firm. Other investors include The London Stock Exchange Group, Santander InnoVentures and Aegon insurance.
In short: that’s an incredibly impressive collection of investors that shows just how important many think this company will be, which uses automation and machine learning. It’s also impressive that two serious rivals from London, such as Linklaters and A&O are going to share in the part ownership of this company. Clearly they see it as not just a good investment, but as important to their client base.
So, what’s the fuss about? Here’s what they say about the startup:
‘Founded three years ago, Nivaura’s focus is on the deployment of digital investment banking platforms for banks, exchanges and other financial institutions. These platforms connect and automate fragmented and manual processes involved in the issuance and administration of instruments such as debt, equity and structured notes. This has the potential to significantly reduce time to market and costs.’
And, if we leave out the financial bits, the message is clear: this is about automation and data collection to reduce manual work, i.e. efficiency.
The firm added that the investment will allow Nivaura to expand its leadership, business development and technical teams in order to accelerate growth. In particular, it will ramp up expertise across machine learning and natural language processing, in line with the increasingly complex automation needs of Nivaura’s clients. The company also plans to enter new jurisdictions and to cover new asset classes.
But….why is Linklaters investing now? This is what they say:
‘Linklaters’ investment is a part of its strategy of embracing new ideas, technology and tools. As well as providing Nivaura with some of the investment necessary for the next stage of its development, it places Linklaters at the centre of new and emerging technologies that have the potential to fundamentally disrupt the way in which capital markets currently operate with knock-on effects for our clients.’
So, although a smart move in general, it is also a message to the market about where Linklaters is now in terms of its commitment and expertise in tech.
Richard Hay, UK Head of Fintech at Linklaters, said: ‘We see Nivaura’s platform as having a potentially significant effect on the broader capital markets ecosystem. That includes law firms, as their platform places legal documentation at the centre of the drive towards automation.’
Meanwhile, A&O partner Phil Smith, added: ‘We have been working with the team at Nivaura since they first joined Fuse and it is evident they are going from strength to strength. We have incorporated their platform in to the work we do for our clients, resulting in very positive outcomes. Their work is hugely important and we welcome further collaboration with them.’