Startup Mimics Crowdfunding to Disrupt Stock Exchange Model

  • Nxchange cuts out middleman by eliminating broker, banker fees
  • Dutch start-up joins firms taking on traditional bank model

Marleen Evertsz used to be a manager at a high-speed trading firm. Now, she’s debuting a new kind of stock exchange that uses the tactics of crowdfunding startups, aiming to upend how corporations raise money by selling shares.

Nxchange lets companies sell shares to the public and then allows investors to trade that stock, says Evertsz, who used to be a managing director at Dutch market maker Optiver. The idea is to eliminate fees charged by brokers and investment bankers. Nxchange’s model differs from crowdfunding in that it also allows investors to trade with each other.

“You’re able to do your listing process yourself,” said Evertsz, founder and chief executive officer of Amsterdam-based Nxchange, which debuts today. “It doesn’t mean you don’t have to comply with regulation, but in terms of the process you’re more in the lead.”

The first company to list on the new exchange: Fastned, which is building a European network of rapid charging stations for electric cars.

Nxchange joins technology companies in going up against entrenched financial firms like stock exchanges and investment banks. While success of these types of companies is far from assured, their hype -- and promise -- has everyone from entrepreneurs to top-tier banks and venture capitalists taking note.

The Nxchange adds to Amsterdam’s constellation of markets that includes an exchange operated by Euronext NV and a trading venue for options dubbed The Order Machine. Amsterdam’s rich history of stock trading dates back to the spice trade in the 17th century, and the city has since become a global hub for electronic trading.

While Evertsz has a background in market making, she said not every stock will necessarily have a professional trader that quotes prices. The company plans to evaluate liquidity and decide whether to have more market makers in the future.

To list on Nxchange, a company must have a prospectus that has been approved by the Netherlands Authority for the Financial Markets. Nxchange said it received its regulated market permit from the Dutch Ministry of Finance. Former Optiver executive Randal Meijer is on the company’s advisory board, as is former BinckBank NV chief Koen Beentjes.

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