Digital Debt Capital Markets Ltd (“DDCM”), a UK based techfin company announces the closing of its initial seed funding, raising £2.5m from a group of individuals and family offices. 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 agora technology. 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 agora software will connect issuers, arrangers, lawyers and multiple bond market service providers – including custodians, central securities depositories (CSDs & ICSDs), issuing and paying agents (IPAs) – and provide 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 agora software which streamline and standardise information flow to provide far more efficient, confidential and secure management of the communications between bond market participants.
As the agora technology 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. Together they have deep expertise on the full life cycle of a bond’s journey from inception to redemption.
DDCM is collaborating with major issuers, investment banks, investors and critical service providers to ensure correct functionality and encourage wide adoption.
The proceeds from this seed capital raise will be used to develop the company’s proprietary technology and hire additional staff. Significant investors include Michael Spencer, the founder of ICAP and financial technology specialist.
Charlie Berman, Chief Executive Officer of DDCM said,
“DDCM is delighted to have closed its initial seed funding, drawing equity capital from a small group of the highest quality, well informed, independent and relevant individuals and family offices. It allows us to further develop our unique technology to improve the functioning of the bond markets for the benefit of major issuers and all the participants involved in origination, underwriting, distribution & trading and all pre and post trade service providers. We are particularly delighted to have gained the support of Michael Spencer who brings his vast business building experience in financial markets and his deep knowledge of the institutions and infrastructure which support them.”
Michael Spencer said,
“DDCM has identified long-standing problems and new opportunities for the future development of the bond markets both of which can be addressed with the intelligent application of new technologies. They have a clear plan for broad adoption and their approach has the potential to significantly advance efficiency and improve returns for participants in a market measured in US$ tens of trillions. As a long-standing investor in financial technology applications in the wholesale financial markets over the past 20 years, I was immediately impressed by both DDCM’s experienced management team and the radical but robust nature of its technology; The scale of the international bond markets makes agora an attractive early stage and highly scalable investment opportunity.”