Sign of the times: the NSX is now going after fintechs
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The National Stock Exchange (NSX), once known as the exchange of the regions, is now targeting the world of fintech to help fill its pipeline of IPOs.
Speaking with Stockhead the NSX’s head of business development, Andrew Musgrave, said while the board had targeted Perth’s mining exploration scene — it was also in active discussions with fintechs about listing.
“The fintech market has become very vibrant in the last few years — and those sort of companies can pop up anywhere,” he said.
“So we’ve been really driving to engage with a lot of the incubators and accelerators in the space around the country because we feel those companies may think an ASX listing may be a bridge too far, or is too expensive.”
In recent times, the ASX has been cracking down on tech IPOs, in particular over fears that companies may be heading to the bourse too soon in their life cycle, and be overvalued.
While Musgrave admitted that a lot of fintech companies didn’t know what the NSX was when he and his business development team came calling, the hard yards in connecting with “intermediaries” had paid off.
“As part of our broader push over the last couple of years we’ve been meeting with a huge amount of law firms, accounting firms, and corporate advisory firms,” Musgrave said.
“They’re fully aware of the NSX, how the business has changed, and where we’re taking the business — so we get referrals that way.
“On the other side of the coin we do our own business development work. So that might be talking to crowdfunding platforms, to associations, or conferences or whatever — there are numerous ways we can get our story out there.”
So far the push has been fruitful, with five NSX IPOs out of 15 in the pipeline fintech plays — but there are a lot more fintech plays out there, and they now have funding options.
With seed, venture capital, or even equity crowdfunding platforms now part of the mix for fintechs, the NSX faces competition to woo the new tech darlings — but he says the NSX has a few tricks up its sleeve.
“I think the main thing we can offer fintechs that they won’t necessarily get through the venture route is visibility,” Musgrave said.
“At the end of the day, the NSX offers visibility because you’re putting out company announcements and financials — and you’re more than likely engaging with an investor relations firm to do that.”
The NSX has also been working hard to get the exchange onto trading platforms such as IRESS and Bloomberg, offering professional traders access to NSX stocks.
“There’s no doubt that us being on IRESS and Bloomberg has been great for offering a new audience for those stocks on the NSX currently,” Musgrave said,
He also said that the NSX team thought there was a wide world of fintechs that hadn’t yet engaged with the more traditional venture capital route.
“Yes there’s a VC market here in Australia, but there are always questions about how active it is, and what companies they choose to invest in.
“Do they just cherry-pick a small amount of companies? We think there’s a huge pool of companies outside of that system.
“At the end of the day, whether you’re a fintech or another company, if you’re on the NSX and you’re a quality company — you will find an audience.”