Listings Ledger, a University of Strathclyde spin-out, has created technology providing instant valuations of private companies which it claims could allow small and medium-sized businesses to secure corporate finance more easily.
The tool combines publicly available data from Companies House with financial information from stock markets to calculate the valuation, creating a “virtual stock market” for private firms.
According to the fintech, this reduces the need for lengthy manual calculations, promotes transparency and accountability and will allow entrepreneurs and business owners to instantly realise the value of their equity.
Developed by a team based in Strathclyde’s Business School, the technology is now heading into beta testing, with the start-up looking to expand its six-strong team and team up with a development consultancy to create the product.
Daniel Broby, Listings Ledger co-founder and director of the Centre for Financial Regulation and Innovation at the University of Strathclyde, told The Scotsman that the firm plans to hire a dozen staff by the end of the year and will enter into an external funding round in the summer to raise investment.
Although the firm’s priority market for development is the UK, it is also eyeing opportunities in Ireland and continental Europe after filing for a “first to discover” patent in the US. If awarded, the patent will protect Listing Ledger’s system to price valuations for 20 years.
As a result of the patent filing, the business will soon be able to accept private companies to participate in the beta testing phase.
The firm’s ambitious expansion plans include the long-term aim to “create hundreds of jobs in its home city”.
Broby said: “As a Scottish-based company we are proud to be driving technology that will benefit company owners, financial institutions and the wider UK economy.
“This patent application is the culmination of a great deal of academic research into this developing and ground-breaking technology. That said, it’s merely a milestone in our ambitions for Listings Ledger.
“We want to give private companies and the entrepreneurs behind them the benefits and freedom that publicly traded companies enjoy, creating a new market and ecosystem that can allow companies develop more rapidly through more easily available financing, thereby benefiting the entire economy.”
Chief product officer Matthew Welstead, formerly of Goldman Sachs, added: “The applications of the Listing Ledger technology for investment banking and private equity investment are wide ranging, cutting out hours of costly manual calculations and opening up a whole new range of services and opportunities for financial markets.”