IPSX, the real estate-focused stock exchange, is winding down its business, claiming a “perfect storm of macro headwinds” has left it “unable to scale the platform at a rate which would have avoided this scenario”.
In a statement, the group’s subsidiary, IPSX UK, said: “Following discussions with the FCA, the board of IPSX UK Ltd has taken the regrettable decision to commence the orderly wind-down of the operations of IPSX and close its markets, IPSX Prime and IPSX Wholesale. This decision is due to IPSX no longer having sufficient financial resources to operate as a recognised investment exchange in accordance with FCA regulatory capital requirements.”
It added that it is involved in “positive conversations with a number of parties that are interested in either investing in, or acquiring, all or part of IPSX UK/IPSX Group, and benefiting from both the platform’s IP and considerable technical expertise that has gone into creating a new regulator-approved stock exchange”.
It said the business has “available cash to support operations for the foreseeable future and the current team will remain in place until the wind down process is complete.”
Since its launch the company has seen only three listings: Mailbox REIT, M7 Regional E-Warehouse REIT and BWP REIT. All have ties to M7 and founder Richard Croft, also a stakeholder in IPSX.
IPSX Group’s last fund raise, launched in the summer of 2021, secured close to £10m from 60 new investors. Discussing that deal in May 2022, chief executive Roger Clarke said: “The reason we are raising what seems like a lot of money is we have great plans to invest in the team, recruit people, increase our marketing presence. Having built the exchange during Covid times, with the complexity of building an electronic exchange… now we want to put some capacity through and beef up the team.”
The company’s last set of accounts, covering the 12 months to 30 June 2021, showed a loss of £5.6m on revenue of £167,844. Expenses over the year stood at £5.7m. The group’s next accounts are due to be filed with Companies House by the end of this month.
As an FCA-regulated exchange, the group’s IPSX UK subsidiary has needed to maintain an operational risk buffer. Before the exchange had any securities traded, the group said the FCA had acknowledged that this money may be used to “continue progressing the business” but that it must “be made whole again”.
See also: Five years, three floats and a wind down: how IPSX tried and failed
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