A crypto trading platform has raised $10 million from a Japanese investment giant to go head-to-head with a big business on Wall Street

Templum, a New York-based trading technology company, has raised $10 million in a fundraising round with a Japanese investment giant.
Templum says it could provide private companies with an alternative to the timely and expensive traditional initial public offering process.

New York-based trading technology company Templum has snagged $10 million in a fundraising round involving Japanese investment giant SBI Group, the company said on Monday.

The firm, which launched its alternative trading system this year, will use the funds to attract accredited investors and institutions to its security token trading platform.

Traders on the ATS, which is a type of non-exchange trading venue, will be able to negotiate directly with one another on the platform. Notably, it supports secondary trading of venture firm Blockchain Capital's security token.

The ATS also allows companies to launch a security token, which can be best thought of as a cryptocurrency twist on the initial public offering process.

SBI Group, which has made a number of investments in cryptocurrency companies, led the round alongside previous investor Raptor Group.

"This investment underscores our belief in Templum's team, technology, and vision for using blockchain technology to transact in digital assets as securities," Yoshitaka Kitao, chief executive of SBI Holdings, said in a statement.

The investment comes as security token offerings gain popularity over initial coin offerings, which helped crypto companies raise over $6 billion in 2017.

Templum chief executive officer Chris Pallotta told Business Insider STOs could provide private companies with an alternative to the initial public offering process, which has fallen out of favor among tech companies.

Many high profiles startups like Uber, Lyft and Airbnb are opting to stay private longer, in part because private capital has become abundant. The IPO process is also known for being timely and expensive, costing some firms tens of millions in investment banking fees. That's on top of listing fees charged by an exchange.

Notably, music streaming company Spotify in April listed its shares via direct listing to avoid the cost of going public via an IPO.

An STO could be another, much cheaper, alternative to an IPO, according to Dave Weisberger, the chief executive officer of crypto technology firm CoinRoutes.