Startup of the Day: Axiology, a Lithuanian fintech company

Axiology was founded by Andrius BartminasMarius JurgilasAndrius Mamontovas, and Andrius Kašuba in 2023. The startup develops a platform for tokenized securities that facilitates the trading of stocks or bonds using Distributed Ledger Technology (DLT). Its ultimate target market is financial intermediaries of the EU that would like to make tokenized securities available to their retail investors. Earlier this year, it secured a €2 million investment round.

In the Startup of the Day column, Marius Jurgilas, co-founder of Axiology, shares the details about the startup’s idea, its product, and future plans.

The Startup of the Day column on AIN.Capital is dedicated to tech projects from all sectors that originate from the CEE countries. If you would like to introduce your project, please fill in the questionnaire.

Tell us about your startup. How does it work?

Axiology is an alternative capital market infrastructure that allows for more efficient capital market transactions by providing a robust trading and settlement system using DLT. The platform will operate under EU DLT Pilot Regime. The first use case of the platform is about making government bonds market accessible to retail investors.

How did you come up with the startup’s idea? What was the reason/motivation behind it?

Axiology is a spin-off from SUPER HOW?, an innovation lab that incubated Axiology. The original idea was to create a depository center for all types of “assets” on a consortium DLT infrastructure. With time and feedback from potential clients, the idea morphed into what Axiology is right now – capital markets infrastructure for tokenized securities.

We have been lucky to hit the timing right with an appropriate regulatory environment (EU DLT Pilot Regime and UK Digital Securities Sandbox). This provides the legal basis to what we have been developing at the technology level.

How long did it take to reach the prototype or MVP? What did you encounter?

Rounding up the MVP took almost a year. The most difficult part was to pass the compliance requirements filter of our partner. This was a great learning experience on both ends – us exposing ourselves to the legacy capital markets infrastructures and us bringing new mode of operation ideas to the partner.

Most importantly we understood (or we think we understood) why capital market has not been at the epicenter of innovations. It is highly complex and habitual arrangement with deep specialization along multiple layers of infrastructure. But to be able to innovate, it requires cutting across these layers.

When exactly did you launch your product? Or when the launch is planned?

We are aiming to provide regulated DLT TSS (trading and settlement system) operator service. We validated our infrastructure with the partner for limited liability company shares register and now are building up and will be applying for the license & exemptions under EU DLT Pilot Regime Regulation. We estimate to be live at the end of 2024.

Tell us about the startup’s business model. How do you monetize your product?

Axiology will replicate the business model of the current capital market infrastructure. The primary source of revenue will be fees for the services rendered on the issuance as well as trading of tokenized securities. Axiology infrastructure can be used to facilitate multiple use cases and thus is ideal for testing and prototyping various implementations not only on the securities side but also on the settlement asset side, be it CBDCs or various other forms of tokenized money (ie tokenized deposits, EMT, stablecoins).

What are your target markets and consumers?

Our ultimate target market is financial intermediaries of the EU that would like to make tokenized securities available to their retail investors. Down the road we see non financial corporates as clients that would be willing to issue digital native tokenized bonds directly on DLT infrastructure.

What about your team? How many people are working in the startup? If you’re looking for new employees, indicate whom exactly.

As of today we are four co-founders supported by SUPER HOW? innovation lab on IT development and FORT Legal law firm on regulatory matters. We will be looking to expand our dedicated team and are currently looking for new hires in marketing/business development, business analyst, blockchain developer (XRPL and/or EVM chains) and compliance areas.

Have you already raised any investments? Provide us with more details on each funding round: the amount, investors, the purpose of the investment.

We just closed €2 million pre-seed funding round. The investment was co-led by COINVEST CAPITAL and BALTIC SANDBOX VENTURES with significant angel investor participation.

What’s next? Tell us about your future plans.

Our immediate objective is to comply with the requirements needed to obtain DLT-TSS operator status. Our ultimate objective is to become the go to capital market infrastructure for tokenized securities in EU and provide white-label technology product solutions globally.