The future for retail initial public offerings (IPOs) looks a bit brighter today thanks to a new partnership between fintechs PrimaryBid and SoFi to launch a new version of the former’s Directed Share Platform (DSP).
Capital markets fintech PrimaryBid Technologies specialises in developing retail capital-raising solutions for regulated financial institutions to allow investors to access public and private offerings. It has facilitated more than 350 such transactions for companies ranging from large-cap to SMEs across the UK, EU and US.
Formerly, the majority of PrimaryBid’s orders for retail IPOs came through Hargreaves Lansdown, AJ Bell and Interactive Investor. However, these now offer access to IPOs themselves.
SoFi is a platform for digital financial services which offers a suite of financial products and services to more than 8.8 million members.
The new partnership between the two companies will allow to SoFi bring equity program management, retail IPO, and follow-on offering processes to its members. It will also allow issuers to involve non-institutional investor groups at scale.
The new DSP 2.0 launched today integrates automations to minimise manual back-office processing as well as modern marketing analytics tools.
SoFi chief executive Anthony Noto said: “Traditional DSPs often have high account minimum requirements, carry significant costs to companies, and lack benefits to underwriters, limiting their appeal.
“SoFi now offers companies going public a turnkey, 100% digital way to offer IPO shares to employees and other people who helped build their business, and whomever else they want to direct the shares to, whether it’s to 10 or 10,000 people.
“People can open an account from a smartphone in seconds, transfer money seamlessly, and stay informed throughout the IPO process – with no costs or deposit requirements.”
PrimaryBid stated the new platform improves on its existing technology, facilitating retail IPOs through improving for companies and their investors.
Investors should remember that taking part in retail IPOs involves substantial risk, including the risk of loss. Risks include unproven management, significant debt, and lack of operating history.
Robin has more than six years of experience as a financial journalist, most of which were spent at Citywire, and covers the latest developments in the investing, trading and currency transfer space. Outside of work, he enjoys reading literature and philosophy and playing the piano.
You can contact Robin at robin@goodmoneyguide.com
