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New Orleans Exchange secures USD4.2m in funding from Prism VentureWorks

The New Orleans Exchange has announced it has secured USD4.2m in Series A funding from Prism VentureWorks to roll out its initial electronic trading platform, the Receivables Exchange, the

The New Orleans Exchange has announced it has secured USD4.2m in Series A funding from Prism VentureWorks to roll out its initial electronic trading platform, the Receivables Exchange, the first US electronic exchange for buying and selling commercial receivables.

The New Orleans Exchange was launched by chief executive Justin Brownhill and president Nicolas Perkin, entrepreneurs with extensive experience in building and operating technology and financial services companies.

Brownhill was an executive of Lava Trading, a global equities and foreign exchange trading technology firm acquired by Citigroup in 2004, while Perkin was formerly vice-president of global business development at Massive Incorporated, which was acquired by Microsoft in May 2006.

The investment will be used to fuel the company’s technology platform, build its sales and marketing efforts and attract industry-leading team members. The exchange’s technology is built by Kestrel Technologies, creator of the New York Stock Exchange’s fixed income trading platform. Prism’s Jim Counihan and Will Kohler have joined the company’s board of directors.

‘The Receivables Exchange is an evolution in business financing,’ Perkin says. ‘Growing companies, often constrained by resources and time, have few means to ensure they are receiving the best rates on their working capital financing and typically cede control of their balance sheet to their financing institution without even knowing it. The exchange brings transparency, efficiency and control to fund working capital and puts the ball back in the court of America’s growing companies.’

Brownhill says: ‘We’re pleased to have Prism as a partner and look forward to pioneering the next step in receivables financing together. Given the firm’s heavy operational knowledge and strong history of success in growing technology companies, we believe our shared vision will bring this market opportunity to fruition.’

The management of the New Orleans Exchange estimates that more than USD25trn in accounts receivable are booked each year on balance sheets in corporate America, valuing the asset class in the US alone at nearly half the size of global stock markets.

The Receivable Exchange provides a centralised marketplace for investors to trade accounts receivables, while serving as a competitive source from which companies can fund their working capital.

‘There is substantial opportunity for growth in online asset-based financing, and the New Orleans Exchange is positioned to be the leader in creating a centralised marketplace for companies and financiers to trade,’ said Prism’s Counihan. ‘We believe the company has the right team and vision to drive success.’

The exchange connects companies to a nationwide network of lenders that compete in real time to buy and trade receivables. Exchange participants enjoy immediate and flexible access to working capital finance at competitive rates, according to the New Orleans Exchange, offering an efficient way to manage working capital at a fraction of traditional financing costs.

Founded in 1996 and based in Santa Monica, California, Prism VentureWorks is a venture capital firm built by entrepreneurs with experience in technology and life sciences and has some USD1.25bn in capital under management in five funds.

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