HUBX has just been announced as one of the top 100 WealthTech companies for 2021. We speak to Axel Coustere & Stephen Ong the Co-Founders of HUBX to find out why.
HUBX co-founders Axel Coustere and Stephen Ong have an extensive background working in capital markets, trading and technology, helping large corporates to raise capital in public markets. However, they were struck by the sheer lack of infrastructure within private markets. The pair had anticipated significant growth potential driven by low interest rates, increased appetite from investors and high commissions. Coustere said, “While banks and exchanges invested significantly into back- office technology in the last 30 years, we noticed that little had been done to better connect front-office activities with the rest of the organisation – end-to-end.”
The co-founders realised there was a huge opportunity in providing trailblazing technology to financial institutions to help simplify, better connect and automate private market transaction distribution and capital raising generally. In 2015, they set out to build HUBX, a technology platform that helps organisations of all sizes to execute private capital transactions.
When building the platform, Coustere and Ong realised that a highly scalable and efficient solution would require a modular approach. This allows HUBX solutions to share common core elements that can work with any asset when paired with customised templates and workflows. “We offer organisations the best of both worlds: branded private platforms to harvest and connect data and services internally by leveraging APIs; with the connectivity of a marketplace across primary and secondary transactions. This allows organisations to shift from a deal-by-deal approach to a multi-stakeholder platform for year-round engagement before, during and after deals. Ultimately, the goal is to deliver better data insights dynamically and a richer customer experience to their clients – be they companies, investors, other institutions or even internal stakeholders within the bank.”
Organisations of all sizes can utilise HUBX solutions to deploy new platforms to deliver efficiency with less risk and redundancy, compared to legacy systems. Its enterprise-grade technology can also be used by technology firms to accelerate the development of their own full -stack solutions via integration and extension other their existing technology.
Scalability was at the heart of HUBX’s development and the team decided to ensure it could be leveraged by any company. Coustere said, “We realised that true scalability would come from the way that we could connect many parties to collaborate on a single opportunity.” At the centre of HUBX solutions is a multi-tenanted infrastructure, which is built for data privacy and facilitates joint book-running and syndication from one ring-fenced network to another, connecting all relevant parties in the capital raising process.
In addition to scalability, HUBX was conscious of how data could be protected in a connected network. “We knew that technology for private markets would need to be designed differently to protect the data of each network and facilitate better connections and insights in highly opaque markets.” Its platform can mould into any organisation and retain data dynamically to ensure firms can connect but firms’ proprietary data is protected.
Why use HUBX?
To ensure clients of all sizes can leverage the platform, HUBX has released three core interconnected solutions – HUBX Founder, HUBX Advisor and HUBX Arranger.
”Its HUBX Founder solution helps founders raise capital in an efficient, timely and secure way to ensure they can easily connect with potential investors and manage feedback within their own private hub. The platform lets the founder securely share access to sensitive deal information with a powerful Data Room that enables management of document access right down to an individual file level, showing exactly who has permission and who has accessed each file.”
Its second flagship product is HUBX Advisor. This solution is designed to help financial professionals deploy capital more efficiently. Brokers, exchanges, investment banks and corporate finance firms can execute private placements in a secure, branded environment. The solution is asset agnostic and designed to help syndicate transactions across networks.
Finally, the HUBX Arranger tool was specifically built for the loan syndication market. Banks, borrowers and lenders use its end-to-end execution capabilities to connect front-office primary and secondary loan distribution activities with back-office operations. Coustere said, “This provides significant efficiencies for banks, improved risk management and significantly better customer engagement. Only a fraction of syndicated loans are executed using digital tools today, so there is significant potential to simplify how these deals are executed. With advanced joint bookrunning and deal syndication and matching capabilities, HUBX Arranger is available on Finastra’s FusionFabric.cloud API platform which gives access to a whole range of other solutions to complement HUBX platforms.”
Coustere said, “HUBX is really all about bringing together all the relevant parties, with a common set of processes to enable efficient execution, no matter how big or small your organisation. From powering Euronext’s ELITE Private Markets to supporting a small investment advisory firm with a large network of investors, HUBX solutions are designed to closely replicate the needs of our clients and reflect our diverse team’s combined industry knowledge and experience.”
Coustere added, “At the heart of all our products is a consistent design ethos that utilises easy to understand, drag and drop, visually enjoyable interfaces and logical workflows to make working with HUBX solutions as intuitive as possible.” True to its ethos, the WealthTech company is consistently building and launching new features and capabilities so clients can be fully prepared.
Powering up with Finastra
Earlier this year, HUBX teamed up with financial software solution developer Finastra to help corporate lenders during the loan syndication process by reducing manual workloads. As a first step, this deal sees HUBX Arranger integrated with Finastra’s back-office loan software Fusion Loan IQ, which is used by 90% of the world’s top 100 banks to process over 70% of global syndicated loans. While the market is worth around $4.5trn annually, much like in private equity, the majority of work is manual and disconnected.
He said, “Working with Finastra we found that by applying HUBX Arranger as the crucial link between the loan distribution and middle and back-office activities, we could reduce close to 80% of the manual workflows and deliver 25 -30% improved efficiency in the number of man days it takes to execute the complex process end-to-end.”
The partnership provides HUBX with validation of its strategy and approach to delivering highly scalable and efficient processes. More importantly, it allows the WealthTech company to deliver “game-changing” efficiencies to the private capital market. Their combined technology stack offers an end-to-end offering that boosts efficiency as well as leverages data insights and automation to improve customer experience.
Coustere said, “HUBX Arranger provides a key missing link for Finastra’s clients. The ability to digitally scale the arduous syndication process by tackling the lack of end-to-end execution. There are many manual, time consuming steps and a lack of real -time visibility currently associated with this piece of a bank’s business. Not doing this well limits the banks’ ability to manage and improve risk and ultimately reputation.” HUBX closed its latest $5.5M funding round in 2021 backed by Barclays, ELITE and Basinghall. Funds from the round were earmarked for accelerated development, expansion into other markets and new strategic partnerships.