FinTech start-up Sharegain has raised $12 million for the roll-out of its platform to private banks, online brokers and robo-advisers.

The young firm, whose securities lending platform allows any investor to generate revenue through loaning out their financial assets, will also scale up its operations with family offices and asset management firms in line with significant early demand.

The funding, which has taken place over two rounds including $5 million in the latest round, comes from leading VC firms Blumberg Capital, Target Global, Maverick Ventures Israel, Rhodium and private investors from the financial industry.

For over 40 years, some of the world’s largest investors have made additional gains through securities lending - loaning out their stocks, bonds and ETFs (Exchange Traded Funds) in return for a payment known as ‘lending revenue’.

Securities lending is a $2.5 trillion market, but this represents a tiny proportion of the industry’s potential. There are over $40 trillion in assets currently sitting idle, globally.

As the first FinTech company to receive FCA approval to offer its SLaaS platform to retail investors, Sharegain aims to create a more transparent and effective market. This will mean it is open to any investor with all the benefits that will bring, from greater liquidity, to better data, to eventually building long-term trust in capital markets.

For financial institutions seeking additional revenue in a low-yield and volatile environment, Sharegain will simplify the securities lending process at scale.

For private investors and wealth managers, Sharegain opens up the opportunity of securities lending for the first time with a transparent, controlled, and simple solution.

An undisclosed group of lenders are already using the Sharegain platform and the business is also collaborating with global financial institutions to drive best practice and a more transparent approach to securities lending.

“This is a 40-year, $2.5 trillion industry whose full potential has never been fulfilled,” said CEO and co-founder Boaz Yaari.

“A performant securities lending market will not only benefit all investors in an increasingly volatile and low-yield environment, but it will be good for the market overall.

“It brings greater liquidity and efficiency, ensuring the settlement of certain trades, promoting price discovery and facilitating market making.

“The old way of securities lending was complex, opaque and outdated, in a ‘need to know’ system that few understood and even fewer controlled. Now, for the first time, it is effortless, effective and open to any investor.”